Looking for book recommendations on Fundamental Analysis | Forex Factory

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Looking for book recommendations on Fundamental Analysis

  • #1
  • First Post: May 11, 2013 1:54am May 11, 2013 1:54am
Hello everyone.

Fundamental analysis is something I would like to get involved with a lot more. On the web in webinars, tutorials, introductions etc I often learn that fundamentals might be or become important - especially, if you consider trading beyond the day-trader scope.
There seem to be a lot of books available telling me about the "best", "perfect", "100%", other "bs" strategies applying fundamental analysis. But that is - actually - not what I am interested in, 'cause I have little confidence in believing in such ultra-awesome strategies. Such titles start the alarm and raise the questions: 'This would be too good to be true, wouldn't it? And if all the traders would stick to these 'recommendations', why are there so many loosers around???'

So, what I am looking for are books or is a book about the principles of fundamental analysis - how the different elements of fundamental analysis actually work, interact or relate to each other on the one side, and on the other side what impact they have on markets especially from global perspectives.

Yes, sure: I may be lucky and may learn these things while reading a book about the "pro-strategies" in forex-trading; but I am prejudiced and convinced that a book about such strategies will discuss the different fundamental analysis elements in the light of such strategies and not with the purpose to actually describe and explain them unbiased ...

So, my question is: Do you have any recommendations, if there are books available? I would read books in English or German ...

Thank you very much for any aid.
Best wishes!
Curtis
PECUNIA NON OLET
  • #2
  • May 11, 2013 5:08am May 11, 2013 5:08am
The Foreign Exchange Matrix by Barbara Rockefeller and Vicki Schmelzer does great job laying out the basics of the modern FX market FA.
  • #3
  • May 11, 2013 5:51am May 11, 2013 5:51am
Three important factors to go with fundamental analysis.

Economic Data:
- CPI, PPI, GDP, etc...

Political events:
- Elections, International conflicts, Government crises, etc...

Speeches of the main political actors:
- Bernanke, Draghi, Obama, Merkle, etc. ..
Just ignore me. Thanks.
  • #4
  • May 11, 2013 6:23am May 11, 2013 6:23am
I trade mostly on fundamentals, the best introductory book I have found on the subject is Currency Trading for Dummies by Brian Dolan. Anyone wanting to learn FA should start there.
si hoc legere scis nimium eruditionis habes
  • #5
  • May 11, 2013 8:36am May 11, 2013 8:36am
Hello.

Quoting pipcorn
Three important factors to go with fundamental analysis. Economic Data: - CPI, PPI, GDP, etc... Political events: - Elections, International conflicts, Government crises, etc... Speeches of the main political actors: - Bernanke, Draghi, Obama, Merkle, etc. ..
Ok, so much I learned on various blogs, websites, webvideos etc. But I would like to know know more but mere names and abbreviations. My intention is to actually 'understand' how these things relate to or affect each other.

About the first two recommendations: Thank you. I will like into them. Lucky me: Things are available as Kindle-editions. Sweet ...

Best wishes!
Curtis
PECUNIA NON OLET
  • #6
  • May 11, 2013 9:27am May 11, 2013 9:27am
why don't you create your own trading strategy...?
it's simple. keep testing "it" untill you find something that works. demo accounts are unlimited and free
  • #7
  • May 11, 2013 9:50am May 11, 2013 9:50am
Hi.

Quoting the si
why don't you create your own trading strategy...? it's simple. keep testing "it" untill you find something that works. demo accounts are unlimited and free
Thank you for your recommendation. Yes. The aim is to 'develop' my personal strategies.

That is why I search useful resources which may help me understand what is going on on the forex markets, which in return requires me to actually neglect books/ titles which speak of "the best" strategies. Currently I am not interested in the strategies provided by others, but I feel much more inclined to understand more or less basic concepts of the fundamental analysis elements in order to implement them in trading strategies I would like to use.

I am no fan of "trial and error", which is why I would not want to perform uninformed decisions regarding 'things' which may require a certain basic understanding of fundamental principles ...

All that being said I nevertheless use demo-accounts for trial and error anyway - and if this is only about learning the ropes and training technical analysis ... But this is not what this topic about: I just want to know if there are 'good' or 'solid' books providing you (and me) a good introduction to fundamental analysis in forex ...

Best wishes!
Curtis
PECUNIA NON OLET
  • #8
  • May 11, 2013 10:22am May 11, 2013 10:22am
this is like cheating...I think it would be better if you understood how fundamentals work by your own step by step, one account blown after another (demos) and so on.
this is what I did because I don't trust anybody. it took me 1 year, but it was worth it.
and one other thing: it's useless to understand "why" eur/usd for example goes up or down because you may see some interventions in the market and...your whole "undertanding" won't be worth 2 dimes.
it's best to go with your intuition for the moment. in time you'll see the results: 1. accounts not blown up. 2. accounts growing naturally.
  • #9
  • May 11, 2013 10:40am May 11, 2013 10:40am
Hello.

Quoting the si
this is like cheating...I think it would be better if you understood how fundamentals work by your own step by step, one account blown after another (demos) and so on. this is what I did because I don't trust anybody. it took me 1 year, but it was worth it. and one other thing: it's useless to understand "why" eur/usd for example goes up or down because you may see some interventions in the market and...your whole "undertanding" won't be worth 2 dimes. it's best to go with your intuition for the moment. in time you'll see the results: 1. accounts...
Bluntly put: This topic is NOT about discussing whether reading and learning may or may not be useful for forex-trading. I only ask for recommendations on books about fundamental analysis in forex trading. So, if someone wants to share her/his (preferable good) experiences with certain books, I'd be pleased to know about it.

Also I don't like being called a cheater only because I want to read books about and to properly grab fundamental analysis.

Since in the end each trader is an individual person it is up to the given individual to decide how s/he approaches trading and finds her/his way. Your way is 'try and error', my way is learning, understanding and performing the knowledge combined with try and error. Both methods are equally valid and may prove to be equally solid. So I would not want to challenge you or your method; but let me put it this way: I am not the kind of person basing decision on 'nothing' but my guts or inner feelings or uncertain experiences ... Thank you.

Best wishes!
Curtis
PECUNIA NON OLET
  • #10
  • May 11, 2013 1:50pm May 11, 2013 1:50pm
Curtis,

Fundamentals are only applicable to long-term strategies (months/years). They have limited usefulness on anything that is shorter than a weekly basis. Nonetheless, IMO, fundamentals are worthwhile to know.

No need to spend money on books when there are plenty of valuable FREE online resources.
Simplified Forex Fundamentals - http://fxtrade.oanda.com/learn/intro...ntal-analysis/
Detailed Forex Fundamentals - http://www.informedtrades.com/f7/
Forex Weekly Fundamental Reports - http://www.actionforex.com/analysis/...-fundamentals/
NewsNow - http://www.newsnow.co.uk/h/World+News
Geo-Economic Data - http://www.tradingeconomics.com/

One book I find extremely practical (without being academia) is
Trading with Intermarket Analysis, Enhanced Edition - John J. Murphy
Other similar materials are
. . Currency Trading and Intermarket Analysis - Ashraf Laidi
. . Intermarket Trading Strategies - Markos Katsanos
. . Published papers by Ray Dalio
  • #11
  • May 13, 2013 9:45am May 13, 2013 9:45am
Hello.

@kokopelli: Thank you so much. I highly appreciate what information you shared here. Especially informedtraders(dot)com helped me a lot.

Best wishes!
Curtis
PECUNIA NON OLET
  • #12
  • May 14, 2013 6:31am May 14, 2013 6:31am
Quoting kokopelli
Curtis, Fundamentals are only applicable to long-term strategies (months/years). They have limited usefulness on anything that is shorter than a weekly basis. Nonetheless, IMO, fundamentals are worthwhile to know. No need to spend money on books when there are plenty of valuable FREE online resources. Simplified Forex Fundamentals - http://fxtrade.oanda.com/learn/intro...ntal-analysis/ Detailed Forex Fundamentals - http://www.informedtrades.com/f7/...

Thanks for sharing KOKO
  • #13
  • May 17, 2013 6:36pm May 17, 2013 6:36pm
Quoting kokopelli
Curtis, Fundamentals are only applicable to long-term strategies (months/years). They have limited usefulness on anything that is shorter than a weekly basis.

Not true. I rely heavily on fundamentals, and most of my trades last 2 - 5 days. Some economic events are already priced into the market, some cause price to spike and readjust itself in a few seconds, some cause gradual shifts over several days, and some cause long term trend shifts. The exact same event occurring in different economies will also have different effects. The key to fundamental analysis is learning which events have which effects on which currencies in different situations, and why. Sounds impossible, but once you get into it it is easier than it seems, especially if you start studying only two or three currencies.
si hoc legere scis nimium eruditionis habes
  • #14
  • May 18, 2013 5:01am May 18, 2013 5:01am
Quoting numbnuts
{quote} Not true. I rely heavily on fundamentals, and most of my trades last 2 - 5 days. Some economic events are already priced into the market, some cause price to spike and readjust itself in a few seconds, some cause gradual shifts over several days, and some cause long term trend shifts. The exact same event occurring in different economies will also have different effects. The key to fundamental analysis is learning which events have which effects on which currencies in different situations, and why. Sounds impossible, but once you get into...
I agree.
PECUNIA NON OLET
  • #15
  • May 18, 2013 1:35pm May 18, 2013 1:35pm
Quoting numbnuts
{quote} Not true. I rely heavily on fundamentals, and most of my trades last 2 - 5 days. Some economic events are already priced into the market, some cause price to spike and readjust itself in a few seconds, some cause gradual shifts over several days, and some cause long term trend shifts. The exact same event occurring in different economies will also have different effects. The key to fundamental analysis is learning which events have which effects on which currencies in different situations, and why. Sounds impossible, but once you get into...

Not meant for this post to be argumentative, but based on what I currently do and know, I guess we just have to agree to disagree...
My posts are from my personal experience, but I do admit that there are many different ways to skin the cat. And I'm sure your way is fantastic for you.

For what I'm doing, using M30 and holding for several hours to a couple of days...I absolutely see no need for FA, as it makes my life and decision making process unnecessarily more complicated. I just lighten up my loads or stay on the sideline during FF "red" news times.
Even when I'm trading H4 and holding for several days to a couple of weeks...I still don't see a need for FA...as I don't use it in this scenario either.
Now, if I'm trading D1 and holding for several months (which I'm currently not), then that would be a slightly different story. Even then, I still don't see FA as the main component for my decision making process, as I'm in the camp of "price action precedes fundamentals" because I believe that smart money (hedge funds, etc.) trades on anticipations (on all time frames).

Hopefully, someone might find some useful information in my posts and from the links that I'd provided, just as I did from the contributors that came before. Again, to each his own as I can only share what I know from what I'm currently doing. But I also know that my opinions (this opinion on FA) might change in the future as I accumulate more knowledge. In the end, it really doesn't matter as long as you end up with more money than you had before (with reasonable draw-down, of course).

BTW, cool username and signature...

Here's my response to that...
___________________________________ ___________________________________ ___________________________________
DISCLAIMER: I just spewed that out. Actually, I don't remember. It just sounded good when I wrote it.
  • #16
  • May 20, 2013 1:30am May 20, 2013 1:30am
I agree that using FA on timeframes below 4h is futile. On a 30m chart, the fundamental themes I trade seem to get swamped in the noise of technical traders. I have only been studying fundamentals for about 6 months now - before that I would throw a couple of moving averages on a daily chart, wait for a trend to develop, then take trades only in the direction of that trend. And it kind of worked for me. But when I started following fundamentals I soon realised that those trends were always driven by fundamental themes and events. A trend, as seen on a chart, is nothing more than the technical manifestation of a fundamental shift in relative value. Therefore 'trading with the trend' and 'trading fundamentals' are almost synonymous, at least in regard to the way I personally view the markets. The difference is that while seeing a trend unfold is much easier than studying FA, it is telling you what price has already done, like a lagging indicator. FA is much harder than looking at a couple of ema's to determine the trend but it leads into trends rather than following them. Just look at the current big moves happening in USD, AUD and JPY - predicting these trends before they started would have been impossible for a technical trader, as a fundamentalist it was like reading a playbook then watching it unfold. The frigging Prime Minister of Japan even told us what was going to happen to JPY, but most traders ignored him and kept staring at indicators wondering what the fuck was going on. I couldn't imagine myself ever going back to being a technical trader.
si hoc legere scis nimium eruditionis habes
  • #17
  • Jun 25, 2013 2:24am Jun 25, 2013 2:24am
Quoting kokopelli
Curtis, Fundamentals are only applicable to long-term strategies (months/years). They have limited usefulness on anything that is shorter than a weekly basis. Nonetheless, IMO, fundamentals are worthwhile to know. No need to spend money on books when there are plenty of valuable FREE online resources. Simplified Forex Fundamentals - http://fxtrade.oanda.com/learn/intro...ntal-analysis/ Detailed Forex Fundamentals - http://www.informedtrades.com/f7/...

Thanks a lot for this. It really helped.
I've been doing some research on this and there is a book that comes up frequently as a good recommendation. It's "Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings, Lien". Have anyone tried this and is it worth it?
  • #18
  • Jun 26, 2013 4:34am Jun 26, 2013 4:34am
fundamentalist is normally for someone who bought the stocks and lost but afraid of cutting lost then holding the portfolio forever .
which basically challenging the health of ur clients.
  • #19
  • Jun 26, 2013 10:35am Jun 26, 2013 10:35am
Quoting fatuncle
fundamentalist is normally for someone who bought the stocks and lost but afraid of cutting lost then holding the portfolio forever . which basically challenging the health of ur clients.

Your post sorry made me lough.
Fundamentals drive the engine.Its the fuel.When bank of Japan cut interest rates or recently Aussie obviously on both accounts strong reactions were expected
and savvy traders should of sold both instruments.When Bernanke says Feds will scale out QE by mid 2014 then expect a reaction which is happening as I type.
I am more of Fundie trader then tech.To me charts come after the event.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #20
  • May 20, 2014 1:18am May 20, 2014 1:18am
Here is another useful book which cover COT data analysis too.

Sentiment in the Forex Market: Indicators and Strategies To Profit from Crowd Behavior and Market Extremes
by Jamie Saettele
Discussion is an exchange of knowledge;argument is an exchange of ignorance
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