Fundamental Trading, or Technical Trading Which Is Best?
Each trader will figure out whether he like fundamental trading or technical trading.
Fundamental Trading is: gathering economic information, following the news and
current economic events to make decisions on when to enter a trade.
Technical Trading is: reading indicators to determine the best place to enter a trade.
Some traders like to follow the news and economic trends then decide when they will
enter trades. This method does take a lot of time and study to make a proper decision.
Some traders like to look for signals on indicators to make their decisions to enter trades.
This can be confusing if they do not know how to use the indicators and read the signals.
We heard a long time ago from a seasoned trader that he had a specific way he used
Fundamental and Technical information to trade.
He said:
1. He would get fundamental information
2. Make a decision as to which way he thought the market would move based on
this fundamental information
3. Then he would check the technical indicators to confirm his decision.
We came to the conclusion that it would be a good idea to know when the fundamental
information was coming out then trade from the directions the technical indicators indicated.
This is just our way of approaching the market. This does not mean it is right or wrong.
It may not be the best or worst way to trade but it is effective for many traders.
Check out the video for an additional perspective.
January 31st, 2012Can Automated Trading Be Profitable?
Automated trading systems are programmed to do certain things when the market moves a certain way.
One automated system works when the market is in a channel and automated system works when the
market trends.
When the market changes and does something different than what the automated system was programmed
to do then it doesn’t work any more and starts to lose money.
Over the years we have seen automated system come and go. When the automated system reach a
saturation point the brokers shut them down. When the system puts on 100′s of trades at the same
price at the same time the brokers and banks can’t fill all the orders. In a few seconds more orders
can be filled in the mean time the automated system stops working.
We have seen situations when a trader tries to use several automated systems and has to watch the
market all the time to know when to switch from system to system to try and make a profit. In the end
he makes very little and spends more time than if he has been doing the trading himself.
The bottom line is we have never seen an automated system work for very long. If there is one that
does work, chances are that it is not being sold to the public.
Just some observations
Check out the video below for more clarification.
January 20th, 2012How To Recognize A Trend And When It Is Coming To An End
Two of the most important things a trader can learn are:
1. How to find the trend or the direction a currency pair is moving.
2. How to recognize when the trend is coming to an end.
Once you know which way a currency is moving then it becomes easier to
find trades and know which way you want to trade. Then timing is the only
thing you have to thing about when you are getting into a trade.
A trading system needs to be looking at information in the present.
If you look at to much information you can be deceived and be confused
as to how to trade a currency.
We suggest you find the trend on the daily and 4 hour charts then time
your entry on a smaller time frame. If you are using a small time frame
to pick out the trend you are limiting your income potential.
The patterns the charts display are the same in the smaller time frames
as they are in the larger time frames. The only difference is the number
of pips you will be able to capture.
Summary: Become good at finding trends and knowing when they are
coming to an end.
Do You Need Different Rules For Different Currencies?
We feel that a trader should become good at reading indicators. When a traders
only looks at one or two currencies he is limiting his income potential.
By reading indicators a trader can trade all the currency pairs. He can trade what
is moving on any given day or time.
If your set of indicators allows you to read each currency and each time frame the
same you are increasing your income potential. You will be able to take a trade on
any currency pair that is moving.
This will greatly increase you income potential. You may have 3 or 4 trades on at a
time rather than 1 trade on at a time.
If the currency pair you are trading is not moving on any given day then you are out
of business until it starts to move. More often than not there is at least one currency
pair that is moving each day.
We suggest using the same rules for all currency pairs will allow you to make more
trades in a shorter period of time.
Check out the video below.
January 13th, 2012What Are Good Times To Trade
The market moves most when there are two or more markets
open around the world. The market moves most during the
European and USA sessions.
Most traders can trade during part or all of these two sessions.
When you look at Forex Factory’s news calendar you will know
which currencies may be effected by the news during these
major trading times.
The USA market opens at 8:00 am eastern time. Many news
announcements happen between 8:30 and 10:00 am eastern.
I would suggest you start looking at the market at least by 8:00 am.
This way you will be able to have an idea of which currencies has
potential setups then see if the news causes a few currencies to
move in relation to the direction the news moves the market.
I like to use indicators to determine if a currency pair will move
because of the news. When one or more currency pairs moves
because of the news, I let the indicators give me heads up as to
when to enter the market.
By using indicators to trade I have more opportunities to catch
the currencies that are moving because of the news announcements.
The most important thing is that I do not trade the news I just trade
around the time of the news. Then I only take high probability trades.
Check out this video. I hope it sheds more light on what I am
trying to share.
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