Why fundamentals work

[FXhotdogstand]

:whistling
What moves the forex market? It's people's speculations that move the market! The news don't move the market, and the graphs don't move the market! It's people speculating on those news and people speculating on those graphs is what moves the forex market! When 9/11 happened, the dollar went down, not because 9/11 happened! The dollar went down because everyone thought that everyone else will be selling their dollars, so everyone sold the dollars, therefore the dollar went down. When a bunch of traders are looking at the graphs, and they see a head and shoulders pattern signifying that the EUR/USD pair will go down after the price breaks the neck line, EUR/USD doesn't plummet down because of that graph pattern! EUR/USD plummets down because everybody recognizes that pattern, and they think that everyone will go short on the Euro at the neck break, so everyone goes short, in hopes that everyone else will go short as well, and it creates this price effect!

www.forexbastards.com

[Ravique]

This is very interesting. Can you please also explain cycles. Can you also explain why trading systems, wich rules are used only by a couple of people, or even one work ? It would be very interesting to know your opinion.

[scorpion]

Ordinary speculators (we are) can't move the price even 1 pip, because you can't simply move trillions of dollar by a couple of thousands dollar. Likewise, a few gallons of water won't certainly rise the ocean level even a bit.

When I trade stocks, i always look at the psychology of both fund managers the primary movers and speculators the secondary movers. They hold from millions to billions of dollar worth of stocks, so when they sell, the price will go down sharply.

When I trade forex, it's all about psychology of central banks and governments. And, it's nothing to look at except the monetary policy they have in place. Every decision can be made purely by looking at economic calendar.

So i suggest when you trade in forex, don't think that speculators move the market. You cannot use fundamental systems designed for stocks, because we have totally different key players here.

[iceFXcream]

well, what I think the forexbas tards article is trying to say, is that psychology perhaps plays a part of the role. Of course, economics is not that simple, we all know that, the economists know that.

[forexprofet]

Scorpion

Ordinary speculators (we are) can't move the price even 1 pip, because you can't simply move trillions of dollar by a couple of thousands dollar. Likewise, a few gallons of water won't certainly rise the ocean level even a bit.

When I trade stocks, i always look at the psychology of both fund managers the primary movers and speculators the secondary movers. They hold from millions to billions of dollar worth of stocks, so when they sell, the price will go down sharply.

When I trade forex, it's all about psychology of central banks and governments. And, it's nothing to look at except the monetary policy they have in place. Every decision can be made purely by looking at economic calendar.

So i suggest when you trade in forex, don't think that speculators move the market. You cannot use fundamental systems designed for stocks, because we have totally different key players here.

........the above statements is ever so TRUE


Hi everyone,
Permit me to use this opportunity(being my first post) to commend the effort of everyone that has made this forum what it is. Excellent indeed

Talking of the psychology in trading faction into 2 parts: 1) Market Psychology and Individual Trader's Psychology. The first is great for feeling the market temperature but the second is where the real job gets done.

Without the second the first is non existence so please look not only into the first alone while making market planning but use the second which is your inner power of subconsious/belief system to enhance your first.This is why I will embrace Scorpion statement above but not disdain the FXhotdogstands view

As a trader for many years, I have learnt that Technical Analysis can enormously be enhanced by good non subjective fundamental analysis.A good trader will not try to preempt/predict the market but rather follow it religiously.

My own little pennyworth


forexprofet

[todd]

Hi Everyone,

I too must comend this forum. It is a fantastic tool for me and I assume many others.

I know that there is an economic calender on this site, however does anyone know where I can download to my desktop or something similar? Ive been using T/A and have found that I have made trades according to my indicators but have been geting burnt by 'the NEWS'! Lesson learnt....

Any ideas on a good calender would be very helpful.

Cheers

[Goaranga]

U forget companies & stuff hedging currency risk - therefore your explanation is a little bit too easy & comfortable