Wednesday June 9, 2021 - 11:37:58 GMT
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Follow up: Do Fundamentals Matter Driving Forex Trends?
I was sent the following from one of our long-time and a highly respected member of the Forex Forum (and Amazing Trader subscriber) to my article, Do Fundamentals Matter Driving Forex Trends?
I have heard it said (and I tend to believe it) that "professionals" (whatever that means nowadays) use fundamentals to judge longer trends and technicals to establish precise entries.
So things like job reports, interest rate changes, tax stories and stuff like that are "important". Professionals use that kind of stuff to make general decisions like buying or selling one currency or another. However, they do not use a news announcement to perform precision entries or exits unless the news report is really shocking. They use technicals to determine exact entry and exit points.
There is no one size fits all approach by professionals but technicals likely play a role in executing trading decisions. In this regard, it is the longer-term charts that dictate underlying trends in the market. This does not mean you need to use them to trade but be aware of what they are showing.
What also caught my attention was the word ” shocking,” which otherwise means a surprise. Markets tend to move most when there is a surprise vs. expectations, whether in economic data, central bank decisions, etc. So, even if you are a pure technical trader, you need to be aware of upcoming news and what the consensus is looking for.
Please feel free to send me your thoughts and I will consider putting them in a future article.
Creator, The Amazing Trader
Contact: [email protected]
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