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How to match fundamental and technical analysis ?

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azaharul islam
310
azaharul islam 2014.06.17 19:21 

What is the diference both of technical and fundamental analysis ?

If you trade by technical analysis ,you will be loser. Also, If you trade by fundamental analysis, you will be loser. So, What will do ? keep you cool. Don't hesitate . Match both of system (technical +fundamental) then take your own decisions.

Sergey Golubev
Moderator
55386
Sergey Golubev 2014.06.17 19:41  

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video September 2013

newdigital, 2013.09.16 16:12

114. Fundamental Analysis Vs. Technical Analysis in Forex

Traders analyze any financial market including the forex market in one of 3 ways:

1. Through Fundamental Analysis

2. Through Technical Analysis

3. Through a Combination of fundamental and technical analysis

While which method a trader chooses is ultimately up to them and their trading personality, it is my opinion that a trader who at least has an understanding of both technical and fundamental analysis is in a better overall position to trade profitably, than someone who focuses on only one school of thought.

To help understand this lets say that I am a trader who studies technical analysis and believes that at least in the short term, which is the time frame that I trade on, that technicals are all that matter. Next lets say that I am looking at a chart of the EUR/USD at 8:20 AM on the first Friday of the month, and my technicals are telling me that the trade is a good buy.

If I focused purely on technical analysis then I would probably enter that position not knowing that at 8:30 AM I may be in for a surprise that I was not expecting. As those of you who have been through module 8 of my basics of trading course know, at 8:30 AM on the first Friday of the month Non Farm Payrolls (NFP's) are released, which historically has been one of the most market moving fundamental releases in the forex market.

While I am not saying that a trader who trades on technicals should not take a trade that looks good to them from a technical standpoint because of weak fundamentals, what I think this shows is that technical traders who at least have an understanding of fundamentals have the ability to decide whether or not they should factor in a specific piece of fundamental information or no. In my opinion this gives them a big leg up on technical traders who dismiss fundamentals altogether.

Now lets say that I am a trader who trades a carry trade strategy which trades based off of a model I built to forecast interest rates based on fundamental news releases. Next lets say that my model generates a buy signal at 1.4700 which I have included on the chart on your screen. Would my trading not be better served if I at least knew that there was a major head and shoulders top in place, so technically the market is very weak here?

As with our technical analysis example what I am not saying is that a trader who trades on fundamentals should not take a trade that they feel is good from a fundamental standpoint when the market is weak from a technical standpoint. What I am saying however is that fundamental traders who at least have a basic understanding of technical analysis have the ability to decide this for themselves. In my opinion this gives them a big leg up on fundamental traders who dismiss technicals altogether.

As you have probably realized if you have been following my courses, they are designed to give traders a knowledge of both fundamental and technical analysis because I believe a knowledge of both puts traders in the best position to learn to trade profitably. I also believe that you can't really make a decision if you are going to trade based mainly off of technicals, fundamentals, or a combination of the two unless you have a sound understanding of the basics of both fundamental and technical analysis.




Ronnie Mansolillo
5493
Ronnie Mansolillo 2014.06.17 19:42  
aussiefxbd:

What is the diference both of technical and fundamental analysis ?

If you trade by technical analysis ,you will be loser. Also, If you trade by fundamental analysis, you will be loser. So, What will do ? keep you cool. Don't hesitate . Match both of system (technical +fundamental) then take your own decisions.

Why looser following one of the two analysis? 
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