Use of both FA and TA

Sep 15, 2018
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#1
To be honest, I personally think that relying only on the technical analysis can’t help a foreign currency exchange trader to take decisions in the desired way he may try to take. As sometimes, very dependence on the technical aspects can’t give the overall picture of the trade. By this means it may be wise to take decisions with the use of both the use of fundamental and technical analysis.
 

tomorton

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Feb 28, 2002
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#2
Depends on how you trade. When I see my favourite opportunity - to set a buy order after a price recovery after a pull-back in a consistent and established uptrend - what sort of FA would make me not do this?
 

FXX

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Oct 12, 2017
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#3
Depends on how you trade. When I see my favourite opportunity - to set a buy order after a price recovery after a pull-back in a consistent and established uptrend - what sort of FA would make me not do this?

I can name several

Upcoming risk event that will likely dampen the prospects of the trade. Money moving players will be on the sidelines if this risk event has any significance

An unscheduled risk off event (but this can change the opportunity by offering a different trade)

Technical traders rarely follow news and will trade what they see. A move in low liquidity or a misleading indication on charts can and does temporarily drive price by enough to trigger technical entries but only to be washed as sentiment asserting fundamentals alters price direction. A breakout of a level turning into what technical traders perceive as a stop hunt.

Lack of risk events (no market moving scheduled news)

There are probably others but I can't think of them right now
 
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tomorton

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#4
I can name several

Upcoming risk event that will likely dampen the prospects of the trade. Money moving players will be on the sidelines if this risk event has any significance

An unscheduled risk off event (but this can change the opportunity by offering a different trade)

Technical traders rarely follow news and will trade what they see. A move in low liquidity or a misleading indication on charts can and does temporarily drive price by enough to trigger technical entries but only to be washed as sentiment asserting fundamentals alters price direction. A breakout of a level turning into what technical traders perceive as a stop hunt.

Lack of risk events (no market moving scheduled news)

There are probably others but I can't think of them right now

Yes, you can name several, and actually I can name several, but the real question is whether Merk can name any at all.
 
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hatemypips

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Nov 11, 2014
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#5
To be honest, I personally think that relying only on the technical analysis can’t help a foreign currency exchange trader to take decisions in the desired way he may try to take. As sometimes, very dependence on the technical aspects can’t give the overall picture of the trade. By this means it may be wise to take decisions with the use of both the use of fundamental and technical analysis.
Yes because true technical analysis is based on ultra speed and math. You have to be very fast identifying trend an its onset, and it has to rely on sound principles like early signals of volatility, divergence of some indicators like futures volume and option market volatility.

Inefficiency means that some part of traders are systematically slower than other in receiving and using some market moving information.
 

new_trader

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Jan 1, 2006
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#6
Everything is Technical Analysis

To be honest, I personally think that relying only on the technical analysis can’t help a foreign currency exchange trader to take decisions in the desired way he may try to take. As sometimes, very dependence on the technical aspects can’t give the overall picture of the trade. By this means it may be wise to take decisions with the use of both the use of fundamental and technical analysis.
Using both fundamental & technical analysis means you need to become an expert in two things when you only need one.
 

NVP

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Jun 21, 2004
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#8
if you tried to anticipate and incorporate all factors, risks and variables when Trading - you would never make a single trade ......ever !

so work out what is important to you and then get on with it ..........not everyone else will agree (in fact thats necessary for efficient markets to work).......but thats trading ...........
 

new_trader

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Jan 1, 2006
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#9
Technical analysis

if you tried to anticipate and incorporate all factors, risks and variables when Trading - you would never make a single trade ......ever !

so work out what is important to you and then get on with it ..........not everyone else will agree (in fact thats necessary for efficient markets to work).......but thats trading ...........
Everything that everyone knows, thinks or hopes is embodied in the price action of the market.
 

FXX

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Oct 12, 2017
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#10
- Price action doesn't tell you when a catalyst will alter the course of price.
- Price action wont tell you if price is likely to do nothing all day.
- Price action wont tell you what the potential for a move is and all you have to go in is historical unrelated price prints
- Price action will signal entries later due to the fact that you need price to print a technical signal before a trade can be initiated.


You need be conscious of being completely biased towards something when there are other factors that you haven't accounted for. Markets are primarily fundamentally driven, look at the recent sell off in equities that is directly related to fundamental shifts. It wasn't a chart setup or price action that caused that. Don't read into this as though i am biased, i am indifferent, i just don't see any evidence that price embodies all factors that are crucial to identifying when to refrain and when to trade in addition to the scope of opportunity. To better explain the scope of opportunity here is an example from last night and some additional context. The RBNZ have been in a wait and see mode with forecasts to both upper and lower side. Their last statement themed around rates staying lower for longer and the reasoning wasn't a deterioration but simply a lack of cpi building momentum. Last night cpi data was released with previous being 0.4, expected was 0.7, and actual was 0.9. This beat on expectations really changes the game for the RBNZ by resolving their concerns of cpi momentum. There was a spike up with a retrace through the night but this new information is a bit of an RBNZ outlook game changer. Price will develop the signals for technical traders over the course of the next several sessions but for me the signal was last night and entry this morning.

Where am i going with this is not comparing different approaches but rather highlighting that leading indicators of future price are not all embodied in price action. Sure as a technical trader you can reside in the camp of "it doesn't matter" where the goal is to take a portion of a move and this is a perfectly normal approach (although that isn't what is being said). What is missing however and let us for a moment assume the data was as expected for the cpi release and we had similar price action. Price is lacking the context to provide traders with a filter for what could very well be a dud trade. It is these elements that ultimately chew away at profits on accounts for traders that simply ignore price drivers. You may be in the mindset of it being an acceptable price of business and can showcase an account that is growing. I am not trying to highlight negatives only the absence of indications of future price direction with pure price action.
 
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Likes: Atilla
Aug 15, 2018
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#13
From my experience, the best way is to combine both.
For example, you analyse earnings results (fundamental) and then wait for the support (technical). The results would be perfect only in case if both sides are well.
In general, FA helps you to find define, whether this situation interesting or not, and TA helps you to get in with good risk-reward raito.
 

Jason101

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Oct 9, 2008
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#14
A lot of TA traders will deliberately size themselves on trade management and time frames in order that most intra day FA news releases will go under the radar and only cause a mild ripple in the current.

And most FA intra day news traders wont give a damn about the current direction flow in the longer trend.
 
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