Trading flowchart

I have just created this flowchart in the hope of making better decisions when i trade. Is it good enough or would you change anything?

Nobody with an opinion about this?

Personally I would not make decisions purely based on this kind of fundamental information. You´re only generating a false bias this way. I would personally implement some more technical analysis in this "chart", but then again I hardly ever trade on fundamentals except for some correlations.

In any case, trading on current inflation rates whatsoever is not going to work. As a fundamental trader you'll trade on expectations of this inflation given in speeches and so on. Not my style of trading tho.

I agree that it is also important to look at expectations for the future. Technicals might work on the short time frames but I'm interested in holding trades for many weeks or months and that will probably not happen unless the fundamentals support my trade.

The idea is a good starting point.
I suspect you just discovered how funds flow and it does look exciting. You need to find out:
. What is your trading style?
. What time-frame do you work with?
. Do you trade with leverage?

If your trading decisions are based on this diagram only,
will you be trading long aud-jpy everyday?
It's a great strategy in principle, however you need more meat around this idea... The real world is not black and white and logical and your choice of trading style will determine the filters you like to implement.

I would advise you to spend some time thinking about your trading and then look at charts to see how your diagram would guide you in your trading decisions...
Peace

No I would not buy AUD/JPY because Australia has begun to lower their interest rate and Japan is in a period of negative growth and deflation which means that their currency should increase in value. My bias would be short AUD and long JPY.

I am no Fundy guru but here is what i think.

First of all, this kind of trading is longterm trading, your trade duration will be from months to years cause fundamental picture does not change every week. Which means you would only be trading like 5-10 time's (max) a year. So it would take a long time to gain experience in your trading methods (cause of not getting enough practice).

Second, Things are not black and white in fundamental trading, A country could have High both unemployment and Inflation (stagnation) at the same time. UK,US are current example of that (though things are picking up in US recently). So you have to keep an open mind and work hard on your R&D to stay ahead of the fundamental shifts.

Third, There is never one fundamental theme driving the market! There are several that come and go, Taking turns and times effecting the market together. This is what causes reaction and retraces in large trends. For exmple Euraud is in a long-term downtrend and the major driving forces behind it are, Debt crisis in EU+ Healthy Eco in AU (cause of China)+ Interest rate diff. But there will always be bumps in the road that will try to shake you off your shorts ( and give opportunities to new sellers who are waiting for retraces). Again this is where R&D and common sense will pay off. You have to know what could cause the trend to reverse completely and what will cause small retraces (you can try and throw some idea's here and we'll see how it goes).

4th, and biggest reason people fail at fundies is that you are thinking in Present tense. You cant make money with what WAS happened. You can make SOME with what IS happening but it's always difficult to make money when a trend has gotten old so you never know when its gonna reverse and you get nervous at every correction. You always have to anticipate where money will be flowing in the future, YOU HAVE TO THINK IN FUTURE. That's how you get in the longterm trends even before they happen. You will fail at your first attempts, you will get doubtful over your analysis, it's very tough and you will need a lot of patience. But that's how the big money is made. Again use the Euraud example from above and think of event's that could reverse this trend.

In the end after getting everything right, you dont need a damn technical pattern to enter the market. I mean yeah going with tech is good to get better entry with tighter SL's. But dont miss a 1000pip trade cause you dint get that pinbar. A technical pattern does't say shit about whats gonna happen in next 6 months, yes they are good for an initial reaction of 10-200 pips (depending on pattern and TF),... they form, people see them and put their orders in and patterns work in return that's just it (simplified). Dont wait for TA pattern to "confirm your biase". But yes they could be good for better entries and smaller SL's.

All that's said above sound's simple and easy BUT it's not. Applying all of this in real world and real time is difficult. Their are many hurdles and biggest one is loosing patience and focus. You wont be trading much, thinking about short term stratergies and looking at people claiming they made so so pips will make you grow impatient, you could loose focus, start messing around with 5M tf and your opportunities would skip past you, Most importantly you need a big account to trade like that. If you'r making 100$ on 1000 pips you'll bound to do stupid things and even if you execute every part perfectly in the end you will feel massively underpaid.

Sorry you dint asked for all this much rant but cant stop when i get goin.
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What I mean by technical pattern can be something as simple as a daily candle that closes above the opening price of the latest down day. That is something which is guaranteed to happen when an uptrend begins so that's one of the things I will be looking for. I don't think that I will feel underpaid because I don't really look at the dollar amount. The only thing I care about is percentages. A 20 % return on $100 is in my mind just as good as a 20 % return on 1 million.

It is good and I think, it is graphical representation of "Go or Not" for forex trading.