Basic trading knowledge that every trader needs (fundamental)
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  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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    Quote Originally Posted by sekiryutei View Post
    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!
    [lang=id]I think that the most popular one out of all is the NFp. The NFP in the friday was not as high as we expected. But why the USD has gone down that much and then what is your comment regarding that data? I'm still confused over here but i know that most traders use that indicator to make an entry for the USD.[/lang]

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    Trader techboy's Avatar
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    Trading the news or fundamental trading is more riskier and a bit difficult to learn because you must fully understand what those value has to do with a particular currency, plus market can be very volatile during this time and setting a stop loss can be easily hit by those spike, also other broker related issue such as requotes and slippage can bring disaster to this kind of strategy. It would be much easier to be a technical trader especially for newbies.

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

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    Quote Originally Posted by Vicko View Post
    [lang=id]I think that the most popular one out of all is the NFp. The NFP in the friday was not as high as we expected. But why the USD has gone down that much and then what is your comment regarding that data? I'm still confused over here but i know that most traders use that indicator to make an entry for the USD.[/lang]
    The last data was quite mixed actually. The bad ones comes from the USD is the NFp didn't get a too good number and then the last NFp in March was revised into a bad number and that's a bad news actually. But the data just shows that March's bad data only one time off since the winter season in US just hinder their business so they can't work.
    Quote Originally Posted by techboy View Post
    Trading the news or fundamental trading is more riskier and a bit difficult to learn because you must fully understand what those value has to do with a particular currency, plus market can be very volatile during this time and setting a stop loss can be easily hit by those spike, also other broker related issue such as requotes and slippage can bring disaster to this kind of strategy. It would be much easier to be a technical trader especially for newbies.
    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.

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    Trader Hukam's Avatar
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    What a great thread, hope we all will carry on fundamental analysis discussion in this thread for a long time, and I request thread creator to keep alive this thread, fundamental analysis is very important, its looking a good thread for newbies from here they can get good update about fundamental news. As far I know Non Farm Payroll is very powerful some time, and the other is FOMC statement

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    Quote Originally Posted by Hukam View Post
    What a great thread, hope we all will carry on fundamental analysis discussion in this thread for a long time, and I request thread creator to keep alive this thread, fundamental analysis is very important, its looking a good thread for newbies from here they can get good update about fundamental news. As far I know Non Farm Payroll is very powerful some time, and the other is FOMC statement
    As for the direction of the FOMC statement will depends on the statement itself. Right now, they are focusing on the interest rate of the country. As long the statement calls for more raise in the Interest rate then it will be very bullish. Secondly, if they discuss the projection of the data then it will move the market quite a lot as well. For NFP, as long the data is >200k then it's bullish long term but short term; we will need a more than expectation to move the market.
    As for this thread, surely i will keep it alive!

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    Quote Originally Posted by sekiryutei View Post
    As for the direction of the FOMC statement will depends on the statement itself. Right now, they are focusing on the interest rate of the country. As long the statement calls for more raise in the Interest rate then it will be very bullish. Secondly, if they discuss the projection of the data then it will move the market quite a lot as well. For NFP, as long the data is >200k then it's bullish long term but short term; we will need a more than expectation to move the market.
    As for this thread, surely i will keep it alive!
    [lang=id]Thanks sir, surely i believe that we can learn quite a lot of knowledge from here then. but the things that heated the market right now is greece i think. many says that they can't pay the debt for sure and what is your view regarding this and how we can trade this as well sir?[/lang]

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    Quote Originally Posted by Vicko View Post
    [lang=id]Thanks sir, surely i believe that we can learn quite a lot of knowledge from here then. but the things that heated the market right now is greece i think. many says that they can't pay the debt for sure and what is your view regarding this and how we can trade this as well sir?[/lang]
    I think that ECb will pay the debt again anyway but they are just lending new money to Greece so that they can pay off the debt. So at the very least, Euro will rally a bit for that but that won't solve the problem at all. because in the end, that simply means greece will have even more debt to the ecb and the time will come when they need to pay it to the ecb once more again.

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    Just giving a new update for now, the retail sales in the market when released yesterday was quite bad for the US dollar. So in the short term, the Us dollar will be bearish. Thus this gives the new chance for the traders to trade with it. But this won't be stable actually because many people will start bullish again once new data shows up and makes it confidence.

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    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.

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