Technical Vs Fundamental Analysis - Forex Forum

Hi there,

I am a new member and new to Forex as well.Though I have lost some money in stocks

I am visiting your site and following your signals since 2 weeks.I must appreciate your site is a great resource on Forex and very helpful.Your analysis is much better than others.

I have following questions:

1. Do you use only Technical analysis or take into consideration the fundamentals as well?

2. When USD rises, every other major in equation go south (with varying degree) and vice versa irrespective of resistance/support levels as happened on Thu and Fri( 15/16 Jan 09).How dependable any analysis can be in this situation?

3. Your analysis seems to depend on Trends.Do you take into account the formation of Double tops and bottoms as is happening now in all majors involving USD?

4.If recommended initial stop is, for example, -50 pips , do we need to trail it with the same number or trailing stops should be increased or decreased?

Regards

Ifee

This post has been edited by Ifee: Jan 17 2009, 18:55

I only use technical analysis.



Do you speak about currency correlation?



I don't use chart patterns in the analysis. I only follow the trends with moving average



I don't use automatic trailing stop. When I move the stop it's manually.

Once again thanks a lot for your reply.
I also use manual stops.All I wanted to know is: Should stops be moved to lock the profits or it shouldn't be changed till the completion of trade?

I try to lock the profits as soon as possible.
If I open a long term trade, I move the stop loss every times I find a new support/resistance

Thanks.
Now every thing is clear for me.

Technical Analysis operates on the theory that market prices at any given point in time reflect all known factors affecting supply and demand for a particular market. Consequently, technical analysis focuses, not on evaluating those factors directly, but on an analysis of market prices themselves. This approach theorize that a detailed analysis of, among other things, actual daily, weekly and monthly price fluctuations is the most effective means of attempting to capitalize on the future course of price movements. Technical strategies generally utilize a series of mathematical measurements and calculations designed to monitor market activity. Trading decisions are based on signals generated by charts, manual calculations, computers or their combination.Fundamental Analysis is based on the study of factors external to the trading markets which affect the supply and demand of a particular market. It is in stark contrast to technical analysis since it focuses, not on price but on factors like weather, government policies, domestic and foreign political and economic events and changing trade prospects. Fundamental analysis theorizes that by monitoring relevant supply and demand factors for a particular market, a state of current or potential disequilibrium of market conditions may be identified before the state has been reflected in the price level of that market. Fundamental analysis assumes that markets are imperfect, that information is not instantaneously assimilated or disseminated and that econometric models can be constructed to generate equilibrium prices, which may indicate that current prices are inconsistent with underlying economic conditions, and will, accordingly, change in the future.
You can check my sig and know more about forex

This post has been edited by vik macks: Jan 27 2009, 11:20

Thanks a lot for explaining the stuff in detail.
However my point of view is that one should also keep an eye on the fundamentals as well.I agree with Arnaud in following the trend yet fundamentals do create stir.For example this week, UK data on Mon created volatility and two US reports due later:FOMC on Wed & GDP on Fri are creating volatility.As a result Dollar is under pressure and I suppose we won't be able to take any position till this Fri.Afterwards dust will settle and hopefully dollar will rise as it was before.

http://broadcast.ino.com/education/cramer_200901/

I really very grateful that you liked my stuff. Its really very encouraging when somebody likes your views. Thanx a lot.

Dear Arnaud,
Thanks a lot for your link.It should be the trading strategy because without a system, one is,for sure, bound to be ruined.
I agree 200% with your trend following strategy though I reconfirm it from my own research as well.