Technical Analysis v Fundamentals, OR ratio

[Nowler]

Hey folks,

I'm just wondering whether you prefer TA or Fundamental analysis when it comes to your trades? Or perhaps you use a particular ratio of both?

Please also state your typically traded markets and why you prefer your chosen style of TA v Fundamentals.

Thanks

 

[FXX]

just my observation of everyone on here. Only a handful seem to use fundamentals with the rest using pure technical strategies. You know where i am with this

 

[piphoe]

because with fundies you have to actually know smthg

i stay away from fundies

 

[Nowler]

just my observation of everyone on here. Only a handful seem to use fundamentals with the rest using pure technical strategies. You know where i am with this

Yep, I know where you stand.
I am not sure i'd go as far as saying that 1 is outright better than the other but there are definitely instances where one largely negates the other.

I use both, but to varying degrees.
I started out with TA and have found it very useful (I often scalp) but I have a friend who started trading about 6 years ago and uses the same platform/broker as me and it was news to him when I told him about spreads widened during releases and potentially dragging you in/out of trades even though price is nowhere near that level. I often remember saying something to him about an upcoming release and he's outright tell me he doesn't care about news releases... how can someone not care about upcoming releases? To me that is nuts! Even if you are a 99% TA trader, the releases will steamroll your trades frequently.

Granted the guy I speak of mainly swing trades FX. But swing trading and refusing to acknowledge these releases??. He's got to be leaving a lot of pips on the table!

NOTE: Though apart from his bravado of trying to beat me in a competition 2 months ago (and losing ) his trading is going well.
He makes it far more difficult that it needs to be imo, but it seems to be working for him.
Though his comments about margin being a good stop loss was quite concerning.

because with fundies you have to actually know smthg

i stay away from fundies

You still need to know something with TA too mate

 

[FXX]

I can't comment on markets other than fx. What I can say is in fx everything is driven by sentiment which is influenced by central banks, economic data, political and geopolitical events. Anyone who doesn't understand what's driving price is disadvantaged and this is the most likely cause of high failure rates. The ones that manage to carve out an edge using pure technical analysis are prone to system failure. The other issue they have is not knowing when a market is likely to range and for how long and the same applies to trends in their various forms. I don't know why people are so afraid of fundamentals. Perhaps they don't know how to put things together or perhaps they prefer to keep things easy. Whatever it is there surely is a correlation with this and the failure rate.

 

[piphoe]

how as a retailer can i know how the banks will react with all their ivy leauge traders & economists and their resources?

i can't, so i don't try. i do best i can with the chart :|

balls out on the chart

 

[Nowler]

I can't comment on markets other than fx. What I can say is in fx everything is driven by sentiment which is influenced by central banks, economic data, political and geopolitical events. Anyone who doesn't understand what's driving price is disadvantaged and this is the most likely cause of high failure rates. The ones that manage to carve out an edge using pure technical analysis are prone to system failure. The other issue they have is not knowing when a market is likely to range and for how long and the same applies to trends in their various forms. I don't know why people are so afraid of fundamentals. Perhaps they don't know how to put things together or perhaps they prefer to keep things easy. Whatever it is there surely is a correlation with this and the failure rate.

I have noticed an active push (more like run) away from fundamentals also (mainly retail traders?). I don't know why. Effort could be a significant reason, and the fluidity of fundamentals. Another thing to highlight is the overwhelmingly TA nature of the "educational resources" that new traders come into contact with as soon as they step foot in the world of trading. At least from the retail side of things anyway. Put the algo scammers aside for minute. In my experience, I had to explicitly go looking for information on fundamentals, whereas when just learning the general jist of trading, it was 98+% TA based.

I think if you are going to disregard something, at least know it well enough to disregard it.

 

[FXX]

how as a retailer can i know how the banks will react with all their ivy leauge traders & economists and their resources?

i can't, so i don't try. i do best i can with the chart :|

balls out on the chart

By looking at the same things they are looking at using various tools. Charts won't give you this information.

 

[piphoe]

By looking at the same things they are looking at using various tools. Charts won't give you this information.

what tools can place me on same level as a trained statistician or economist ?

 

[piphoe]

and, no, i'm not going to read babypips primer again

 

[FXX]

I have noticed an active push (more like run) away from fundamentals also (mainly retail traders?). I don't know why. Effort could be a significant reason, and the fluidity of fundamentals. Another thing to highlight is the overwhelmingly TA nature of the "educational resources" that new traders come into contact with as soon as they step foot in the world of trading. At least from the retail side of things anyway. Put the algo scammers aside for minute. In my experience, I had to explicitly go looking for information on fundamentals, whereas when just learning the general jist of trading, it was 98+% TA based.

I think if you are going to disregard something, at least know it well enough to disregard it.

It's easier to sell and teach and for people it's easier to understand. It also requires less time to work with whereas a fundamental trader would need to do research daily consuming several hours.

 

[Nowler]

how as a retailer can i know how the banks will react with all their ivy leauge traders & economists and their resources?

i can't, so i don't try. i do best i can with the chart :|

balls out on the chart

Of course the Institutional Trader has advantages over the Retail Traders, but don't let that fool you into thinking that we don't have advantages over them

Also, Knowing that a country is raising their interest rates lets you know that there could be money to be made by going long. Doesn't mean you will definitely be right, but it tips the scales if even just a little as opposed to going in totally blind. Knowing that the Kiwi's have been having some in house political issues with forming a government likely informs the sellers to jump in. If a country has put combatting inflation as a key part of their mandate and then inflation reports show a worsening or even just no change, then sellers would likely be on that like a fly to sh!t. This is just my opinion of course but being aware of the most important of the fundamentals is the smart thing.

 

[FXX]

what tools can place me on same level as a trained statistician or economist ?

Ransquawk provides you with news and research by analysts. They sit In front of bloomberg terminals and have analysts digesting data and squawking it and printing it through a searchable text feed. Doing homework, you can use eikon to access the same info they see just need to know what to pick out but that comes with experience.

 

[piphoe]

real times news doesn't do ME as a retailer any advantage, i don't know how to turn it into a trade. news just gets me into trouble. i stay away from it.

 

[FXX]

real times news doesn't do ME as a retailer any advantage, i don't know how to turn it into a trade. news just gets me into trouble. i stay away from it.

That's because it needs to be in context. To make money using it you need to know the policy path of the central banks, what they are watching, and how the economies are doing. Today for example German Gdp beat expectations providing a strong eu buying sentiment. If you put that against the pound then you have a strong sentiment against a weak sentiment and would have a fundamental reason to open a long EURGBP trade. You then apply whatever technical approach you find works or if sentiment is strong just enter at market

 

[piphoe]

That's because it needs to be in context. To make money using it you need to know the policy path of the central banks, what they are watching, and how the economies are doing.

isn't this what i am saying, i don't know how to do that.

you know what i will never learn how to do it, because ONE i don't give a sh^t,(if i did i'd become an economist, life is too short) and 2 i'm 2 dumb, i failed algebra

i look at charts, thats all i do :innocent:

 

[Quantt]

Hey folks,

I'm just wondering whether you prefer TA or Fundamental analysis when it comes to your trades? Or perhaps you use a particular ratio of both?

Please also state your typically traded markets and why you prefer your chosen style of TA v Fundamentals.

Thanks

Trading only candle shticks is not going to work, you have to have a fundamental explanation why the system should work more often than not - hence the edge, more winners than losers = to be able to make money in the stock market...

 

[FXX]

isn't this what i am saying, i don't know how to do that.

you know what i will never learn how to do it, because ONE i don't give a sh^t,(if i did i'd become an economist, life is too short) and 2 i'm 2 dumb, i failed algebra

i look at charts, thats all i do :innocent:

How's that working out for you out of interest?

 

[Nowler]

... and 2 i'm 2 dumb, i failed algebra

I never finished school, am not good at math and am dyslexic. I can still google something like DailyFX and read what their analysts are saying. It has a section for "real-time" and shows you how many hours/mins until that release. It's not ideal but its a start. You will get out what you put in when it comes to fundamental analysis

 

[piphoe]

i'm not LISTENING to anyone else but my own spirit , and thats the way it is, for now

i will take a GEM here or there though, incorporate it into my own when I here one