Why Fundamentals in Forex Do Not Work


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  1. Fundamentals do absolutely move the market-long term especially. And technicals are crucially important and should be used hand in hand with fundamentals to have the best success. You have to understand what moves the market and who moves the market. And it is definitely NOT the retail traders. It is the large funds and central banks and they use fundamentals and sentiment to do so . Fundamentals give you the LONG range perspective in a pair and allow you to know which pairs are best to match up and trade. Knowing the long term stance on a particular currency (not a pair) will help you understand WHY there is a trend or no trend in a particular pair. The other part that people mix "fundamentals" with is SENTIMENT. These are the short term economic pieces that move the market temporarily (counter trends/corrections) when they go against the longer trend/fundamentals. That is why people say that a particular news release only moved the market in a short way and therefore the fundamentals are useless. That is NOT a fundamental move, but rather a SENTIMENT move. You also have to know which data points will likely move the market, many are insignificant and will only confuse you. So again, use them in tandem with each other! Ignoring one or the other is dangerous. Like I said technicals are VERY important. But so are fundamentals and sentiment. Those that say not to trade during large news events (FOMC, interest rate announcements, NFP, etc) clearly do not understand sentiment and fundamentals and how to take advantage of them. Technicals help you identify good value buying or selling areas and profit targets and fundamentals and sentiment help give you the catalyst to move a pair from that level. Both are critical.

  2. Could not agree with you more, just look at the Scottish incident recently, days before the result with lots of uncertainty I was getting emails from every Guru saying sell the pound against the dollar. Charts showed a huge engulfing candle to buy.. Lo and behold price went up after recent drop, technical got it right, fundamentals got it wrong. Then the result comes out, everyone saying buy the pound all is OK.. Whoa market drops and then goes sideways.. Fundamentals got it 100% wrong. You do not need to know what the fundamentals are saying because the price on the charts far more accurately depict what is happening fundamentally.

  3. That is right, money management is key in Forex and holding onto winners and cutting losers early. Most traders find this the hardest aspect and is the main reason most traders lose money..

    Also i agree, the charts say it all.. Thanks for the support..

  4. Good stuff mate i ve been reading on forex and looked at charts for two years. And have come to the conclusion to trade what you see its so simple the main thing is to manage your loses place your stops with a little breathing space and go for it obviously confluence
    help justify reasons for taking the trade. 

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