Market fundamentals. Part 1
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  1. #1

    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!

  2. #2
    Thank you dear this is nice post and from this post any one new camer or old trader can get lot of knowledge and implement in real forex account i also like your second one hot spot that is very important when market penetrate sharply and you have no choice where to enter and where to leave trade it will help you right decsion on trade so successful trader always want to find this point and put trade and some risk involve but us SL to save his investment

  3. #3
    Quote Originally Posted by Value trader View Post
    1. Imbalance creates trends, balance creates trading ranges
    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.
    Yes when traders sentiments are in favour or against a particular currency it goes in trend, but when sentiments are mixed and traders sentiments are indecisive market trades in ranges. By understanding the broad traders mentality we can understand and deal the market efficiently. Warren buffet said it right you can not win the competition if you do not know about the other candidates in competition.

  4. #4
    Quote Originally Posted by guru View Post
    when sentiments are mixed and traders sentiments are indecisive market trades in ranges.
    When there is no clear indication where the market is going then it tends to be range bound. At these time market follows support and resistance. So placing term trade brings some profit. But these trades should be placed with stop loss because sudden imbalance can create new strong trend and lead to huge losses.

  5. #5
    Quote Originally Posted by guru View Post
    Yes when traders sentiments are in favour or against a particular currency it goes in trend, but when sentiments are mixed and traders sentiments are indecisive market trades in ranges. By understanding the broad traders mentality we can understand and deal the market efficiently. Warren buffet said it right you can not win the competition if you do not know about the other candidates in competition.
    i prefer mt5 greatly because it is a hugely variable and trustworthy investing platform which gives skilled speculator and a newbie to be able to buy and sell successfully and clearlyI can help you, this is why I started the thread
    In my initial post I have explained what is the solution. What part of it is not clear?

    If you want tell me what Linux version you have and I'll tell you how to proceed exactly.

  6. #6
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    I do accepts the fact that the imbalance creates the market trading because in the cause of that, the sentiments of the traders and the focus will shift, if this happens, you will see the market tending towards a unified direction, this case goes to the trading sense where the bias of the market is over 50% to the other side, the remaining percentage will not same the balance to the market that time.

  7. #7
    Quote Originally Posted by cozard007 View Post
    I do accepts the fact that the imbalance creates the market trading because in the cause of that, the sentiments of the traders and the focus will shift, if this happens, you will see the market tending towards a unified direction, this case goes to the trading sense where the bias of the market is over 50% to the other side, the remaining percentage will not same the balance to the market that time.
    I agreed with. Forex is online business. Fundamental analysis is good for trading of trader. If we should learn first then start earn. Because it is the base of earning. So we should follow our Money Management. We have to remove greed and emotion. with out analysis a trader can't do anything.So it seems complex to me.

  8. #8
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    Quote Originally Posted by gopal View Post
    I agreed with. Forex is online business. Fundamental analysis is good for trading of trader.
    Yes dear. but there is fundamental knowladge part of trading and it is essential thing and we can gather this knowladge from online, I mean there is many website which serve us global economical update news every moment so we can follow these for our better measurement.
    Don't loss you hope.

  9. #9
    There are mainly two types of analysis related knowledge. Such as fundamental and technical. Actually fundamental knowledge are provided from company. Through online we are achieve knowledge of fundamental system. Because there are many online site available here which help us to get fundamental knowledge. With this we are operate our fundamental analysis.

  10. #10
    Quote Originally Posted by cozard007 View Post
    I do accepts the fact that the imbalance creates the market trading because in the cause of that, the sentiments of the traders and the focus will shift, if this happens, you will see the market tending towards a unified direction, this case goes to the trading sense where the bias of the market is over 50% to the other side, the remaining percentage will not same the balance to the market that time.
    Thank you for this reply from the most wonderful, I agree with you completely in the opinion, and I have confirmed that your point of view completely correct has benefited from a lot, I think that the best way to succeed in trading in the forex market is to follow the successful strategy that is working to abide by

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