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Fundamental trading

  • #1
  • First Post: Jul 8, 2011 11:09am Jul 8, 2011 11:09am
If a person is new to fundamental trading, what would be advise to start with?
initial directions? Thanks.
  • #2
  • Jul 8, 2011 3:29pm Jul 8, 2011 3:29pm
Quoting Expert44
If a person is new to fundamental trading, what would be advise to start with?
initial directions? Thanks.
economic books, read up on how central banks operate & bloomberg news
  • #3
  • Edited 9:57pm Jul 9, 2011 8:06pm | Edited 9:57pm
I would start with the basics;

Correlations
-------------

Bonds(10 year notes of major countries),
Equity Markets (DAX,CAC,FTSE,DJ,NIKKEI,NYSE,etc),
Commodity Markets (Gold, Silver, OIL)
PAIR CORRELATIONS (search for Mataf's correlation to gauge the immediate number between pairs)


Sentiment
------------

COT
VIX
University of Michigan Consumer Sentiment Index
Rydex Funds Nova-Ursa Sentiment Ratio
ZEW Financial Markets Survey [GER]


Reports
----------

All the important reports that cover

Interest Rates
Inflation
GDP
Employment
Retail Sales
Manufacturing
  • #4
  • Jul 9, 2011 8:22pm Jul 9, 2011 8:22pm
But make sure you understand completely each and every variable, in terms of influence and magnitude.

Also remember the markets are dynamic.. they are ever changing - the relationships we see today, we might not see them tomorrow.


Fundamental analysis requires a thorough understanding of economic theory. Once you done reading some basic economics books (they all broadly cover the same principles) start viewing news @ CNBC, Bloomberg and respectable websites that offer articles/news. Apply theory with practise and see the difference.

The challenging task is to bring all the ingredients together so that you can form a correct view on each country's financial health, and thus develop a bias on the pair.

Good luck.
  • #5
  • Jul 12, 2011 9:27am Jul 12, 2011 9:27am
FF calender is enough for fundamental traders.
Trade responsiblypatience is the key/Swing trader
  • #6
  • Jul 16, 2011 7:05am Jul 16, 2011 7:05am
Quoting Incrediblle
FF calender is enough for fundamental traders.
Lol your kidding yourself right
  • #7
  • Jul 16, 2011 9:04am Jul 16, 2011 9:04am
Quoting Expert44
If a person is new to fundamental trading, what would be advise to start with?
initial directions? Thanks.
Any form of analysis TA, FA, Contrarian etc.. will always have a convergence/divergence movement, which is enough to wipe out your account... in a single move or a slowly gradual decreasing of your account.

Even if the sentiment is UP, price will continue to fall to a level where your account will blow. When your broker call you for a margin call and ask you to put down your house, price will continue downward to wipe your account because of some unforeseen economic catastrophe occurring.

Even if by chance you get a super computer and have access to a global-unified "commitment of traders (COT)" index... there is a delay in the system that will always cause a divergence/convergence of price regarding to any form of analysis.

Bookmark this post because no-one else will tell you this. And if by chance you are still trading after 5-10years and still going in circles, hopefully you can read this statement again and take a different approach to your trading.
  • #8
  • Jul 17, 2011 4:02pm Jul 17, 2011 4:02pm
First you should get to know the importance of Economic Data released at forex factory calendar daily. Then check what change does what on the market (by the book). Read about fundamentals. Then try it on demo account - how the changes in data release change the market..
  • #9
  • Jul 18, 2011 2:05am Jul 18, 2011 2:05am
I can only add:
Learn what the market cares about at the moment. Why the money are flowing in particular instruments and how can different events change perception of these instruments value.
  • #10
  • Feb 20, 2012 8:13am Feb 20, 2012 8:13am
I sometimes really wonder...

Which is the right way of trading?
And how to stop being a Market's fool?
(whatever you trade...fx, stocks, commodities...)

Some old good gold lads say some kind of - there is no such way.

Everyone else is swearing in his/her own opinions.
But I say - it's shallow!


Fundamental trading should be good, but there are traps, as said above.
Problem is - how to solve these obstacles?
  • #11
  • Feb 20, 2012 10:50am Feb 20, 2012 10:50am
Quoting CrucialPoint
[color=DarkRed]Any form of analysis TA, FA, Contrarian etc.. will always have a convergence/divergence movement, which is enough to wipe out your account... in a single move or a slowly gradual decreasing of your account.

Even if the sentiment is UP, price will continue to fall to a level where your account will blow. When your broker call you for a margin call and ask you to put down your house, price will continue downward to wipe your account because of some unforeseen economic catastrophe occurring.

Even if by chance you get a super computer...
nice post
  • #12
  • Feb 20, 2012 6:32pm Feb 20, 2012 6:32pm
timing is the most important
  • #13
  • Feb 20, 2012 11:04pm Feb 20, 2012 11:04pm
Quoting CrucialPoint

Any form of analysis TA, FA, Contrarian etc.. will always have a convergence/divergence movement, which is enough to wipe out your account... in a single move or a slowly gradual decreasing of your account.
So your advice is to what, not trade?
  • #14
  • Feb 20, 2012 11:08pm Feb 20, 2012 11:08pm
Quoting Greenhaze

Learn what the market cares about at the moment. Why the money are flowing in particular instruments and how can different events change perception of these instruments value.
That's probably the best approach! It's market sentiment which matters, not necessarily the actual underlying fundamentals, "buy the rumor, sell the fact" and all that stuff....anticipated events are often priced in, the actual event can produce an unusual market reaction!
  • #15
  • Feb 21, 2012 7:13am Feb 21, 2012 7:13am
is their any web site that will grade a pair on fundamentals for
example currently their is more negative news vs positive on XX pair
  • #16
  • Feb 21, 2012 8:54am Feb 21, 2012 8:54am
not much to say about it, but I guess Im working on it it takes like a lot to get the hang of it
  • #17
  • Mar 3, 2012 12:24am Mar 3, 2012 12:24am
Quoting pipmutt
So your advice is to what, not trade?

Nope that wasn't my advice.

My advice is that if you can not see what I just pointed out,
you will end up going in circles and get nowhere in trading.
You have to realize it and then find a way to work around it.

  • #18
  • Mar 3, 2012 4:34am Mar 3, 2012 4:34am
Quoting CrucialPoint

Nope that wasn't my advice.

My advice is that if you can not see what I just pointed out,
you will end up going in circles and get nowhere in trading.
You have to realize it and then find a way to work around it.

you just write cryptic crap.
  • #19
  • Mar 3, 2012 5:33am Mar 3, 2012 5:33am
Quoting CrucialPoint

wipe out your account
account will blow
margin call
wipe your account
Quoting CrucialPoint

My advice is that if you can not see what I just pointed out,
you will end up going in circles and get nowhere in trading.
You have to realize it and then find a way to work around it.



lol, the 'way to work around it' is by
using some form of risk management!
That's pretty basic and to be honest if
someone doesn't know that then they
really have no place in this business!

  • #20
  • Mar 3, 2012 5:34am Mar 3, 2012 5:34am
Quoting Custos

you just write cryptic crap.
Yeah I think we were supposed to be impressed
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