Disliked{quote} Hanovers overall approach to trading and fundamentals is almost identical to mine (although I put more emphasis on economic indicators than him).....Ignored
I was especially interested in your comments on GBP, JPY, CAD -- thse have given me potentially different angles to ponder. Like you, I see USD > GBP, hence for me it becomes a question of whether to buy GBP/weak in addition to USD/weak for the sake of some diversification -- albeit while attempting to the timing right -- or to simply trade the one pair offering what seems like the best probability, i.e. single strongest against single weakest. Of course that dilemma represents a general principle, USD > GBP is merely a current example. Same thing applies to individual setups, should I spread my risk across all of them, or merely take the one(s) that I see as having the greatest probability of success? I think some of it comes down to whether maximizing return, or smoothness of income, is the priority.
I believe a big part of FA-based decision making is anticipation, i.e. being able to act on relevant data before the 'herd' does, and/or before the data gets 'priced in'. Hence to whatever extent economic indicators -- especially those that are being focused on by CBs (frequently inflation and employment) -- can point toward future policy decisions (including rate hikes/cuts; QE; hawkish/dovish comment; etc), then even while the immediate effect of a data announcement itself might be all too rapidly 'priced in', its potential downstream effects might not be -- if that makes sense. In that sense there can be a kind of domino effect created by a bullish or bearish confluence of indicators (as in your example with CAD), creating a price trend which can be fuelled even further as technical traders seek to exploit the move.
Thanks again,
David