Unconventional fundamental analysis. Part 2
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    Unconventional fundamental analysis. Part 2

    Hi there! This is continuation of the topic started here

    In previous post we’ve been talking about COT reports and how to read them. When we consider analyzing any inventory, our primary goal is to find overcrowded markets. What do I mean by that? Markets with extremely strong participation from buyers and sellers first will lead to price «squeezes», then to quick liquidations.

    If you want to spot market that is going to conduct fast liquidation rally (2-3 weeks trend), you should seek for overcrowded market.

    How to spot overcrowded condition in the currency market?

    When we talk about currency markets, they are relatively range bound. If you take commodities, they can be volatile and trending from time to time and even make over 100% in gains – for example, problems with harvest or hurricanes can push prices of agricultural commodities to new highs very rapidly.

    Currencies are different. First of all, they are not as volatile as commodities, gold or stocks.
    But sometimes currency markets are traded with serious discounts or premium to historical norm. Such markets provide potentially good prices and good momentum for position traders who prefer to have strong vehicle for their positions.

    However, our perception of «expensive» or «cheap» can be very misleading. What seems expensive for short-term traders, can often be just a random deviation for long term players.

    But nevertheless, we can keep an eye on markets that have strong deviation from average – they can provide nice trends in some period of time.

    The most convenient way to find such market is to go to barchart.com to High/Low page. There we can find «Year-to-date» deviation for most major currency pairs.

    For example, notice that for AUDUSD in the current market conditions pair is traded 1% far from annual low, but 15% far from annual high. We assume that most of the time currency markets tend to be range bound – so, may be AUDUSD should be included in a watch list for establishing long position.

    ytd.png

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    well this is another way of spotting good trade set ups in the Forex market but unfortunately i do not use something like this because what i know is that i always stick to the use of price action and it has been helping me all the time and when this is what i use and still believe in then i will continue to stick to it all the time.

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    Following the two thread on this,they are so great for advance understand of the trader based on the fundamental trading level. I believe that the market works randomly myself because your believe may not be the same with my believe and we might be holding large liquidity in the market as well. This means that behaviors of the market is not always certain even for the fundamental side of the game, and this is the main cause of the "Overcrowded condition" as discussed above.

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    Quote Originally Posted by cozard007 View Post
    Following the two thread on this,they are so great for advance understand of the trader based on the fundamental trading level. I believe that the market works randomly myself because your believe may not be the same with my believe and we might be holding large liquidity in the market as well. This means that behaviors of the market is not always certain even for the fundamental side of the game, and this is the main cause of the "Overcrowded condition" as discussed above.
    with the fundamental analysis we will be able to determine how the change in trend in the trade so that with the changing trends in the trade we will be able to get a better chance in this trade as well as the trend will not likely continue to occur without any change in the trend so changes must be supervised also with fundamental analysis

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    I think this strategy can only be executed taking long term perspective in view and we can not afford to go with this strategy with limited fund size, so we should follow our short term strategy but must have a look and idea of orientation of the currency pair in near future and we can plan our trades accordingly.

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    Through this thread try to learn about unconventional fundamental analysis and it seems to me interesting. Actually It seems to me hard to understand with my less knowledge and skill. But this is a good learning tools and I appreciate if. I personally gathered much information from this thread and hope to continue such types of wise thread further.

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    Quote Originally Posted by COMANG View Post
    with the fundamental analysis we will be able to determine how the change in trend in the trade so that with the changing trends in the trade we will be able to get a better chance in this trade as well as the trend will not likely continue to occur without any change in the trend so changes must be supervised also with fundamental analysis
    with all the basic examination most of us are able to figure out how the actual alter throughout trend from the business making sure that with all the changing trends from the business most of us are able to obtain a greater possibility on this business and also the trend is not going to very likely still come about with no alter from the trend therefore improvements need to be administered likewise with basic examination

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    Fundamental analysis is important that I see news analysis is important to follow the news and we analyzed because the fundamental analysis is not easy, but important in trading and learn important fundamental analysis and combine fundamental and technical analysis to get a good result

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    Quote Originally Posted by shosho View Post
    Fundamental analysis is important that I see news analysis is important to follow the news and we analyzed because the fundamental analysis is not easy, but important in trading and learn important fundamental analysis and combine fundamental and technical analysis to get a good result
    every day I will always monitor how these trading conditions in the news because the news somehow become very important for us get the information how the strength of the trend of the market and because the news will also show how the market conditions whether it will happen or even a change in trend would continue a trend that will occurred in the trade and this is so important

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    Thanks to this thread try to learn on the fundamental Alternative analyzes it seems to me interesting. In fact it seems difficult understand with my less knowledgeable and skills. But this is a good learning tool and I am glad though. I have personally gathered lot of information from this thread which and hope to continue this kind of sage other thread.

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