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  1. #1
    Junior Member

    Fundamental analysis doubt !!!

    Hi guys, i have a doubt about trading with the economic calendar data, with the relation between previous, forecast and actual in this case. Lets supose that the unemployment rate is at 5%, and the forecast for the next rate is 8%. If the data released says that there is 7%, how it will affect a currency, being lower than the forecast, but higher than the previous? It would still affect in a negative way?

  2. #2
    Legendry Member Michael Hodges's Avatar
    I don't like to use fundies as a trade signal, they, for me, are usually the back drop against which my trades are made, I don't care if unemployment falls one or two percent this month so long as it is trending lower...capiche? neg surprises will be entry points and positive surprises will bring profits

  3. #3
    Veteran Member Optionguy's Avatar
    Fundamental analysis better works if you take it more generally, not specifically. If you take some single piece of news that is to be released, it may have only short term impact, even though it might be very bullish or bearish. In a trend market usually shakes off bad news and optimistically reacts to good news. It is more important to understand market expectations. When news comes out, all available outcomes are usually priced in. If not, reaction still tends to be short term.

  4. #4
    Moderator Kolyo's Avatar
    Quote Originally Posted by Michael Hodges View Post
    I don't like to use fundies as a trade signal, they, for me, are usually the back drop against which my trades are made, I don't care if unemployment falls one or two percent this month so long as it is trending lower...capiche? neg surprises will be entry points and positive surprises will bring profits
    Michael comment is heading exactly to the heart of the problem. It is not important the exact data, or even if the number is falling or rising. It is important if he generate negative or positive surprise for the other traders. If for example we are expecting worse than previous month NFP and than it come better, it is a strong positive surprise. If it come even worse than the expectations this may be negative surprise. This have to be always taken into account but my personal opinion is that only significant news releases are good entry points; there is no reason to risk your money on some small news that will only lead to small volatility. Better to avoid trading on weekly unemployment rate. Only NFP and changes in the basic rates can produce good signals.

  5. #5
    Active Member COGSx86's Avatar
    Quote Originally Posted by jesusoro17 View Post
    Hi guys, i have a doubt about trading with the economic calendar data, with the relation between previous, forecast and actual in this case. Lets supose that the unemployment rate is at 5%, and the forecast for the next rate is 8%. If the data released says that there is 7%, how it will affect a currency, being lower than the forecast, but higher than the previous? It would still affect in a negative way?
    Hey Im going to assume you are a new trader and learning the ways of the market, the one piece of advice I will give you, is to not trade the market one HALF HOUR BEFORE and AFTER a news event, your chances of getting stuck in a wipesaw before the news release and then not getting a solid entry from BO's platform, means not to trade NEWS EVENTS

    Even thou BO' dealers tell you to trade news events............they do this because they know you will LOSE and they make lots of your MONEY
    Last edited by COGSx86; 07-15-2014 at 01:25 PM.

  6. #6
    Junior Member
    Thank you guys, you helped me alot. I had that doubt about why what cares is the expectation. What do you think about waiting for the news to be released, check the numbers and then confirm the possible movement with technical analysis? would be a bad idea?

  7. #7
    Active Member RichardD's Avatar
    Quote Originally Posted by jesusoro17 View Post
    Thank you guys, you helped me alot. I had that doubt about why what cares is the expectation. What do you think about waiting for the news to be released, check the numbers and then confirm the possible movement with technical analysis? would be a bad idea?
    Only thing what matters is the expectation (expected data) vs actual data. To be honest, checking the numbers just when they come out (at the ForexFactory calendar if I recall well they are updated pretty much instantly) and trying to trade them-> is what everybody is trying to do -> outcome: no result.

  8. #8
    Legendry Member Michael Hodges's Avatar
    fundies lay the underlying trend, day to day announcements make rallies and corrections, entries and exits.

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