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Thread: Basic trading knowledge that every trader needs (fundamental)

  1. #1
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    Basic trading knowledge that every trader needs (fundamental)

    Have you guys ever know what kind of basic knowledge you needed when you trade forex? There are technical traders, fundamental traders and stochastic traders as well. Depend on the condition, all of this will have their own strength point. But as for me, i'm using news for trading and that is fundamental trader.

    First of all, fundamental trading is considered expert only because you need a lot of things to be learnt in here in order to make the money. But personally i can teach the basic in my thread.
    Most data in economic calender are important actually. But there are some data that will be much more important than any other.

    Those data are:
    1. GDP (This is the data that will show a country's growth; if this data is negative then that means it has entered a recession. Usually if the data negative then the currency will fall down. But as for positive ones means they have some growth. But it won't ensure the upside movement as well since we need to watch the actual data vs the forecast as well. If actual>forecast then it will be bullish.)
    2. Interest Rate (This is the data that will show a country's deposit and lending rate. A good data means if you want to save some money in a country's bank then you will get much more money in return, thus this is very bullish if the rate did increase. If you're getting confused as for why then it's because as long many people are saving in a bank then the reserve will increase. And many will start demanding for that currency and money will flood into the bank. But if the rate was reduced then the opposite will happen, money will flow out from the bank and the currency will weaken) so this means this data is pretty interesting to be traded but but sometimes we need to watch expectations as well. If some investors expect the rate to be cut but it actually didn't then it will be bullish.
    3. CPI (This is the data for the raise in price for goods. If this data actually increased then it's very good and it's a sign that an economy is improving. A better data in here means a country will have more chance to raise interest rate so this data is like an indicator to interest rate. Higher data always bullish.)
    4. NFP (most country are using employment change but there are some country that uses Non Farm Pay Roll as for this; NFP is new jobs created out from farming jobs. Usually this is to check the country's growth in each month. A better than expected data will always make the currency bullish as well for the opposite. But if you want to trade the long term, we need to watch the historical data as well. As for the US's NFP in every friday at each new month, as long the data is above 200k then it's a good sign for long term investment, but as short term one, we will need to trade watching the actual vs forecast)

    Here i have covered some data new beginners need to watch. If you have several question regarding this i would like to answer, thanks!

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  2. #11
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    Quote Originally Posted by Ashviniurs View Post
    Having knowledge regarding the fundamental aspects is always very much helpful for the traders. I have very bad experience with the fundamental analysis, like in for example if there is a good news for GBP/USD, instead of apprising of the price level i have observed that the price only fell because of which i have lost huge money.
    You can observed the price fell down? Sorry but i don't really get your post here. I think that you are talking about good news for GBP/USD pair right? So is that good for the GBP or for the USD? But as i read your post, i think it's for the GBP then. But why the price can even goes down then? Can you be more specific here? Thanks!

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    Quote Originally Posted by sekiryutei View Post
    Exactly, all traders need to learn deeper in here in order to earn the money. Maybe it's quite risky if you didn't understand the market but once you understand the knowledge, you will know when the market will move and what is the direction as well. And then making money will become much more easier.
    Well, there are traders that becomes profitable in this kind of approach but I try this kind of trading before and seems that there are too much psychological pressure during news time that I feel does not fit on my personality, I love to trade during normal market conditions than risk trading during the news.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

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    Quote Originally Posted by techboy View Post
    Well, there are traders that becomes profitable in this kind of approach but I try this kind of trading before and seems that there are too much psychological pressure during news time that I feel does not fit on my personality, I love to trade during normal market conditions than risk trading during the news.
    Well, that's fine as well. All traders need to build their confidence through experience. Even if this will put too much strain on your mind and pressure you, i think as long you have mastered this kind of trading style then you can earn without a doubt. But you will surely need to do a lot of efforts in order to make profit i quess. Learn more so that you can take less pressure might be good.

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    [lang=id]Traders like that are very rare without a doubt. We will rarely see any trader that can produce good result like that i believe. Only several trader with the experience will be able to show good result anyway. We need the confidence first in here so that we can earn in the longer run.[/lang]

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    Quote Originally Posted by Vicko View Post
    [lang=id]Traders like that are very rare without a doubt. We will rarely see any trader that can produce good result like that i believe. Only several trader with the experience will be able to show good result anyway. We need the confidence first in here so that we can earn in the longer run.[/lang]
    Gaining experiences in the market takes time, and traders should know this of all people. It is very good to have your ways out of the market and the experience will get this done for you, it is how serious you do this, how creative you are, and how you are doing it your different pattern that makes success, not just experience sir.

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  7. #16
    Trader techboy's Avatar
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    Quote Originally Posted by sekiryutei View Post
    Well, that's fine as well. All traders need to build their confidence through experience. Even if this will put too much strain on your mind and pressure you, i think as long you have mastered this kind of trading style then you can earn without a doubt. But you will surely need to do a lot of efforts in order to make profit i quess. Learn more so that you can take less pressure might be good.
    For me I am more relaxed if I trade in a normal market conditions than trading during the news, I feel like I am riding in a roller coaster if I have an open trade during the news which can sometime affect my psychology, but then again traders has different approach in this market and as long that you are profitable with it then its fine.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

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    Quote Originally Posted by techboy View Post
    For me I am more relaxed if I trade in a normal market conditions than trading during the news, I feel like I am riding in a roller coaster if I have an open trade during the news which can sometime affect my psychology, but then again traders has different approach in this market and as long that you are profitable with it then its fine.
    Well, the pressure is very intense with news trading after all. But as long you really possess the knowledge then that roller coaster will surely become your main income. I think that experience is actually very essential in this part. I won't say that this is easy because i know how hard this is as well. Approaching the market slowly under this kind of condition will make you grow for sure. But try to understand the direction of the roller coaster with fundamentals will help you a lot in the future. Better to start learning from now then.

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  9. #18
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    Quote Originally Posted by techboy View Post
    For me I am more relaxed if I trade in a normal market conditions than trading during the news, I feel like I am riding in a roller coaster if I have an open trade during the news which can sometime affect my psychology, but then again traders has different approach in this market and as long that you are profitable with it then its fine.
    Same here mate, most of trader's always feel good in the market when they feel confident about their analysis and its not very easy to make a good market analysis on fundamental news that's why I feel good with technical learning and its apply. I think trading psychology could be affected in normal market conditions too and we need a good trading experience to solve this term called Psychology

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  10. #19
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    Quote Originally Posted by Hukam View Post
    Same here mate, most of trader's always feel good in the market when they feel confident about their analysis and its not very easy to make a good market analysis on fundamental news that's why I feel good with technical learning and its apply. I think trading psychology could be affected in normal market conditions too and we need a good trading experience to solve this term called Psychology
    Well, there are no easy business in this world after all. Most of the traders will struggle quite a lot in order to earn the best income but once they lost a lot of money then they will surely change their own mind later. Sometimes if you want to trade with the way you're not feeling any confidence, then don't do it because the way you feel about your own position will be nothing and you're mentally pressured at that time as well.

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  11. #20
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    Any trader that really wants to succeed in forex trading, the one thing he should have in mind is that he should be able to get to know his support and resistance line, they are important.

    However, a trader needs to know the amount of money that he can afford losing, therefore he has to learn and never trade with the amount of can't afford losing and he should avoid trading with higher leverage.

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