Fundamentals: what do they mean to you?

[Chartsy]

There's been some conflict in terms of fundamentals and their place in trading over these boards recently and in the past. I will post a similar poll for technicals

i have been reading some of lipschutz again, one of the world's best currency traders. He says 'how can you trade something you don't understand?' or something like that. I have been learning economics for my forex so as i can make better decisions, i have a few setups, pretty simple like buying support and buying pullbacks, but now i'm starting to think 'if i can find trades that are even just a bit in line with news/fundies then the probability may increase' rather than what i usually do which is just buying a range because it's there

 

[robster970]

Fundamentals drive the weight of opinion in the market. To ignore them means you have zero context of the forces of supply/demand. I started off trading technically and still do but the two things that made a difference were (a) learning who's in the market and how they operate and (b) economics and fundamentals.

 

[forexup]

Generally Fundamentals bore me sh!tless... I love looking at the charts. Fundamentals are essential if you trade the long terms.

I trade short terms... forex (upto 12hours in an open trade) equities (upto 1month)

 

[arabianights]

fundamentals win in the end
flow dominates short term
technicals mostly ********



P.S. In the very end it's random - or chaotic, at least




P.P.S. In the very very very very very end, 2nd law of thermodynamics wins, so far as anyone knows

 

[forexup]

Dont you believe the Random Walk Hypothesis has been thrown out of the window? The general concencus professionally suggests this is so, and I agree.

I make money using technicals only, and so do others. The guys in treasury at my bank are trained in technical analysts and experienced in fundamentals.

I do believe that fundamentalists make MORE money but to throw `technicals in the bin' is a bit silly. And vice versa.

 

[BSD]

Funnymentals mean nada to anyone not investing with a holding period of years, and even then they are superfluous for anyone with even a modicum of price reading abilities.

As for shorter term trading, quite honestly, who exactly in the day and age of high frequency trading that constitutes eg 70 % of NYSE daily volume is gonna be sharp enough to actually believe that programs doing hundreds or thousands of round turns per day are gonna be influenced by funnymentals ???



One really shouldn't forget that economics are anything but a hard science, pretty much all economics is good for is coming up with post facto explanations.

Whereas analyst predictions, be they from banks or economic think tanks etc, have historically not even been worth the weight of the paper they were printed on.

 

[meanreversion]

Post facto ... I like it.

It's true.. if you follow banks' forecasts for FX rates, they are usually equal to current spot +/- a percent or two. Then, every quarter, they adjust the forecast depending on where spot has gone. Very useful.. not. Eventually the year ends, and one muppet stands up and says "See!! I was right!"

Repeat ad infinitum

 

[BSD]

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[BSD]

Post facto ... I like it.

It's true.. if you follow banks' forecasts for FX rates, they are usually equal to current spot +/- a percent or two. Then, every quarter, they adjust the forecast depending on where spot has gone. Very useful.. not. Eventually the year ends, and one muppet stands up and says "See!! I was right!"

Repeat ad infinitum

Agree !

Way you put it sounds like straight out of a Bluff-Your-Way-as-a-Career-Analyst handbook.

The Bluffers Guides

 

[scose-no-doubt]

fundamentals win in the end
flow dominates short term
technicals mostly ********



P.S. In the very end it's random - or chaotic, at least




P.P.S. In the very very very very very end, 2nd law of thermodynamics wins, so far as anyone knows

Long term ain't random!

 

[meanreversion]

Agree !

Way you put it sounds like straight out of a Bluff-Your-Way-as-a-Career-Analyst handbook.

Put 10 economists in a room and you get 11 opinions.

Calling yourself an "economist" at a bank is sometimes seen as a bit infra dig, so some of these guys rebranded themselves as "strategists".

But as we all know, there are many ways of making money out of the markets without taking any risk, and being an economist/strategist is one of them, and good luck to them. If you can get someone to pay to listen to your hot air, then well done. After all, the primary (only?) objective is to make as much money as possible for YOURSELF.

 

[scose-no-doubt]

One really shouldn't forget that economics are anything but a hard science, pretty much all economics is good for is coming up with post facto explanations.

LOL! Bernanke must be wasting his time then.

 

[meanreversion]

There is another thread where somone opined that even failed hedge fund managers are successful, because they have convinced someone else to give them their money.

It's a cynical view, but correct. Ultimately, you need to look after yourself and your family. If you can help others to make money, that's great, but not always necessary...!!

 

[meanreversion]

LOL! Bernanke must be wasting his time then.

"We have a technology called the printing press, and can produce unlimited dollars at almost no cost"

I wonder if that will become Bernanke's epitath, much as "irrational exuberance" become Greenspan's.

What's Brown's.. "that bigoted woman"? Or maybe "prudence"?

 

[scose-no-doubt]

All's I'm saying is for a forum full of non-PhD, non-multi-millionaires, we see a lot of extreme and inflexible opinions. It's borders on characture.

It's the same in any thread of this ilk.

 

[BSD]

Put 10 economists in a room and you get 11 opinions.

Calling yourself an "economist" at a bank is sometimes seen as a bit infra dig, so some of these guys rebranded themselves as "strategists".

But as we all know, there are many ways of making money out of the markets without taking any risk, and being an economist/strategist is one of them, and good luck to them. If you can get someone to pay to listen to your hot air, then well done. After all, the primary (only?) objective is to make as much money as possible for YOURSELF.

Lol true enough !

Take the 5 "Wirtschaftsweisen" (aka "Economy Wise Guys) of the German government, think tanks populated by the best and brightest of Germany's economists and that are supposed to advise Merkel and Co on economic direction and measures to be taken...

Sad fact of the matter is that those guys have never even remotely been right in their predictions over decades, while totally missing the huge elephant of the economic crisis.

Hilarious if it weren't so sad !

http://www.faz.net/s/RubB8DFB31915A...6BAF82FB662016E18D~ATpl~Ecommon~Scontent.html

FAZ, one of Germanys leading newspapers, basically sums the predictive abilities of said think tanks up as just a little bit better to throwing dice.

 

[scose-no-doubt]

BSD, I hate to sound tin-hat here but how do you know wht you see isn't disinformation?
If you consider the fact that Governments run covert and false flag ops all over the world everyday is it outside the realm of possibility that they may be lying about/omitting economic truths from the public too?

 

[meanreversion]

All's I'm saying is for a forum full of non-PhD, non-multi-millionaires, we see a lot of extreme and inflexible opinions. It's borders on characture.

It's the same in any thread of this ilk.

Hmmm, don't be so sniffy about it. It's just a forum. Even exalted multi-millionaires get it wrong sometimes.

 

[BSD]

Scose, well results don't lie do they.

As in forecasts vs results over decades in the real world.

Or eg take Bernankes predecessor who in all his wisdom basically created the huge bubble that almost took us to the brink of a total systemic meltdown, and whose consequences we are still suffering from today, and that Bernanke in all his wisdom wasn't able to prevent either.

If economists could predict and steer we wouldn't have these enormous problems regularly.

 

[meanreversion]

But don't forget that Greenspan is a wealthy man. Look after yourself, this is a capitalist society. Make money for your own account, and if you want to donate it to charity, then so much the better.

Dick Fuld (he of Lehman fame) is also very wealthy. And Jimmy Cayne. And Stan O'Neal (no-one talks about him, he got out nice and early).

How can economists see into the future any better than anyone else? They can't. BUT people pay to listen to their opinion, that's the difference between them and us.