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Thread: Market fundamentals. Part 1

  1. #1
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    Market fundamentals. Part 1

    Hi traders!

    Let's talk a bit about market fundamentals. If you want to survive and obtain ongoing success in trading, you'd better rely on fundamental principles that don't change not setups. There are bunch of setups over there, candlestick configurations and other stuff.
    But if you know principles, you will be more flexible and your success will be more solid


    What you can rely on trading markets?



    1. Imbalance creates trends, balance creates trading ranges


    Yes, exactly this sequence. Not "trend is your friend", but imbalance is your friend, because trend is an outcome, imbalance is a market condition that creates this outcome.

    "Trend-oriented" mindset often pushes traders seek for bad trade locations, when opportunity no longer exists.
    Imbalance is what you really need.

    Though trading is not a science, it has some unwritten laws beyond price action:

    First - big market participants create trends and rely on fundamental analysis. Biggest players don't rely on charts in decision making process.

    They have charts for just one thing - to know how crowd thinks and where majority will step in the markets. Big players need "hot spots" on the market (when many traders are in) to have liquidity. Their positions require liquidity and without liquidity they will be unable to accumulate enough volume for their positions.

    Imagine player with pip size equal to 100.000 USD or higher. Of course, he will need liquidity and will build his position long enough.

    That's why they monitor charts to know when traders will step in. But the reason they need to build a position is not techical analysis. Reason is fundamental analysis and analysis of real supply and demand.


    It's hard to spot "big player" but one thing will help you. Address yourself a question - who loses on the market? Who is caught in short or long positions? If you understand that long players are losing, you automatically know that bigger timeframe short player opposes them.
    Smart money players create imbalance and absorb volumes.

    Who provides liquidity, who consumes it? Like Warren Buffet said - if you find yourself near the poker table and don't know who loses money - it's you who loses it.


    2. Keep an eye on hot spots in the market


    What is a hot spot? They are: important extremums, round numbers, option barriers, in a nutshell - spots that traders are watching.
    If you know that volumes are there, big guys are also there.

    Every trend can be divided into several parts - young trend, mature trend and culmination.

    Young trend and culminational phase represent great imbalance but with one nuance - big players are building positions in young trend, and covering their positions during culmination.

    If you see "obvious" trend and see very hot market, be aware - avoid being a laggard.


    Later on I will apply some charts.

    See you and trade responsibly!

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  2. #21
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    Quote Originally Posted by Rizwan Aziz View Post
    In this respect, I would like to say that market fundamentals is not about the news or economic releases. It's about natural things for the market. Beginners should start with learning technical analysis, because this method is more convenient, and perhaps learn how to work with the economic calendar as a simple indicator for fundamental analysis. Forex took a lot of time to get master it as this is very tough an risky business.
    I mainly use the fundamental analysis and news to trade Forex though I also keep the technical under view. I have been trading using fundamental analysis and the results is amazing, still i'd like to adds some technical analysis into my knowledge, because i have seen so many good technical traders can spot great entry and exit prices for a currency pair.

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  3. #22
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    Forex is such a trade where the more we learn, the more we can able to earn. So, we need to give importance on learning forex. This forum is the best place to learn forex because there are huge learning elements in this forum. If we follow and study these threads with deep attention and sincerity, then it will not be so hard to learn forex and becoming a good trader. I appreciate this post and hope to continue such types of wise thread to teach newbie like me.

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  4. #23
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    Quote Originally Posted by sharif View Post
    In my opinion if you want to survive and obtain ongoing success in trading, you'd better rely on fundamental principles that don't change not setups. There are bunch of setups over there, candlestick configurations and other stuff.
    fundamental analysis is the force that push the market,and this is why we need to learn how to interpret this news when trading the market,it can help us spot new trend on the market when trading,if we understand fundamental news properly we might not trade the market on a daily base,because most of our trading will be based on the market data.

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  5. #24
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    Quote Originally Posted by dkarev View Post
    fundamental analysis is the force that push the market,and this is why we need to learn how to interpret this news when trading the market,it can help us spot new trend on the market when trading,if we understand fundamental news properly we might not trade the market on a daily base,because most of our trading will be based on the market data.
    Huh. If you would read my post you would understand that fundamenatal principles that drive the market are not news.
    It's supply and demand.
    How are you going to capture supply and demand analysing news? :)

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  6. #25
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    I think if it is not marketnya market fundamentals, but the power trader,, in which a trader can master and understand the market was moving so with the help of indicators we can obtain that name .. fundamental market fundamentals will be formed if the analysis is correct and significan.

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  7. #26
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    i thought the subject was going to be about fundamental analysis of currency market which is a very important topic,hot spots in the market are some sorts of support and resistance areas as the market usually bounce from them and if it penetrates them it is usually with high momentum,thanks for reminding me of that,i was just about to place a trade and i am considering this point.

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    Bend your view to the charts, not the charts to your view

  8. #27
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    This is the great thread i ever read about forex trading,i totally unaware of these facts about forex business,i only heard always that"trend is your friend" but actually it's the imbalance which traders must look after more than trend,thanks again because i learn many good things from your thread...

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  9. #28
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    well the Forex is such a trade where the more we learn , the more we can able to earn so we must need to get importance on learning of Forex business, and if we follow the study these threads with deep attention and sincerity then it will not be so hard to learn Forex business and becoming a good trader.

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  10. #29
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    Fundamental trading needs a level of experience. I think we should avoid this trading style until we have the proper skills and strategy. If we don't have quality then we cant be able to analyze the news properly and we will get wrong signal from our analysis. So i think before follow this steps we need to be sure if we have proper quality or not. Thanks..

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  11. #30
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    Wow your post is very insightful,I even had to bookmark it,and I have so many reason to believe what just said about price imbalance,I once had this strategy but for crosses on the weekly chart,but I got a bit confused,although what I need is more time to fully understand this method of trading.I am very delighted to have gained such an insight,I hope to see some charts.thanks

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