Currency Trading Information Channel
Throughout our course on futures trading, we have tried to point out to you that there is a great difference between having an investor attitude and being a trader. There are also many similarities. In one sense, a trader is someone who invests in his own trading ability. Therefore, in that sense trading is investing. Trading and investing are interrelated. You come to realize this through experience.
For the most part, the trading approach comes from a much shorter- term mindset than the mindset of an investor. It can also be much more based on technical information than on fundamental information. But here again we find a dilemma. What exactly is technical information? What exactly is fundamental information? Where do the two overlap, or do they? Are they interrelated? Sure they are. But again, it is through experience that you learn about and develop an appreciation for these concepts.
TECHNICAL VS FUNDAMENTAL??
As futures traders, we get to hear some pretty weird things, and also as writers, and teachers in the business of educating people about futures trading . One of the strangest things we get to hear is when people try to separate trading into either technical or fundamental. Why, oh why, does everything have to be put into a box? Would someone please explain how to separate one from the other? Is it possible, or is there some middle ground that cannot be classified as either technical or fundamental?
For example, how do you classify trading from news stories? Surely you would not call news stories fundamental information, would you? A friend of ours tells about a time in January when he heard a commentator on CNBC explain that the price of coffee had gone up because of a freeze in Brazil. The only thing wrong with the story was that January is the middle of summer in that country. Was the news worthy of the name fundamentals?
What about seasonal trades? Are they technical or fundamental? Certainly they are not based upon hard facts. Who knows if tomorrow will bring a season like the last? Who knows that the weather will be the same this summer as it was the last?
They say enter on rumor, exit on fact. Is that technical or fundamental? Or is it just plain good old common sense? This chapter is about experience, but here's the catch: You must survive as a trader long enough to gain experience. Experience will show you that trading cannot be placed into a box. Experience will bring you to the realization that some of the best trades you will ever make come from experience, gut feelings, and good old common sense. Experience will demonstrate to you that many great trades are derived by paying attention and learning to be an opportunist. Experience will bring you to the point where you will take a smattering of what others may call "fundamentals" along with a pinch of what some call "technical analysis," and combine them with a spoonful of know-how to succeed in making your living in the markets.
Our understanding is that fundamentals deal with known facts and published or unpublished information about the underlying commodity or instrument you wish to trade. Because statistics lie, governments knowingly lie with statistics, or at times do so unwittingly, those who can afford it and also have a need, spend tons of money doing their own research in order to come up with their own body of fundamental knowledge. This includes gathering information and statistics on anything imaginable that might affect the underlying. They research production, marketing, crop conditions, financial conditions, etc.; everything they can find out about the underlying. They may even make in-person visits to farms, mines, or financial institutions for discussions about the underlying. They then combine this knowledge with what they find believable as handed down by various reporting agencies.
Even with live data, it is not economic to compete with these behemoths with regard to the amount of fundamental knowledge they can afford and are able to gather.
Technical analysis in its purest form assumes that everything known about the markets that affect the markets can be seen on a price chart. We believe that to be true. But that's where reality and the kind of technical analysis we see today part company. What we mean is, in general what do technical indicators show you that you can't normally see with your two eyes via pure chart reading and analysis? Admittedly there are a few things. We have never denied that an indicator like Bollinger Bands can show you the location of 2 standard deviations. We cannot visually know where that amount of deviation from price would be without the bands. But most technical indicators wipe away the very things we do want to see. They take your focus away from what is truly happening to price. By smoothing, they purport to remove "noise." But it is the noise that we, as traders, and especially as day traders, most want to see. The noise is what tells us the reality of what is going on.
Fundamentals, in the purest sense, are beyond what the individual trader can deal with. Most individual traders simply don't have the time to conduct the required research. But that doesn't mean they cannot use this information should the happen to stumble across it. Technicals in the purest sense are fine, but the way they have been bastardized into virtually meaningless indicators makes no sense. The ultimate foolishness of technical indicators is that of rendering them as mechanical trading systems. Employing mechanical systems represents the height of the undisciplined mind. It is tantamount to conceding that because you do not have the discipline to exercise self-control, you will undergo the harsh discipline enforced on you by an uncaring, unfeeling machine. While you try to escape from self-disciplined trading, mechanical systems force an even more horrible discipline upon you in that you now have to sit and grit your teeth due to the pain brought on yourself because of the mechanical aspect of the system. Mechanical trading is not without discipline, rather it places the discipline onto the wrong part of the trade. Instead of placing the emphasis on planning, organizing, directing, and controlling the trade, it gets the trader in via a mechanical signal and then forces him to suffer through the trade in order to exercise discipline - quite often a discipline he does not understand based upon a system he does not understand, and that may have been derived entirely outside the realm of reality.
The realities of the market are many. Markets are affected by a lot of things that are not measurable by either fundamental or technical analysis. In addition to seasonality, news, rumor, weather, and common sense observation, one has to take into account the market conditions at the time at which a trade is to be entered. Is the market fast? Is the market thin? Is the tick size abnormal? Are market makers moving the market? Is it options expiration day? Is it the day before a holiday? Is an important dignitary going to make a speech? Has the market gone into a state of hysteria, or even euphoria? Are you going to buy or are you going to sell? It is the summation, organization, and perception of these and even other criteria that constitute the realities of trading.
We are convinced that the best way to trade should be termed "Reality Trading?." In fact, we are so convinced that we have trade marked the name for future use. Reality Trading views the market as an entire entity, a living, throbbing reality that includes fundamentals, technicals, and realities such as news, rumors, seasonal tendencies, common sense observations, and market conditions.
Let's look at a possible trade that is based upon realities. Let's say that this is a trade that has been good most years in the last 15 years. Let's say that the trade is to buy March wheat between September and December of the current year.
First we look to see if March wheat futures are behaving normally. What does the March wheat futures chart need to look like if this trade is going to work?
We begin watching March wheat futures in the first week of September, for possible entry between that time and the last week in November. We're not particularly interested in what the March wheat futures look like prior to September, but according to past seasonal patterns, they should not end September in a down trend. The normal pattern for wheat futures at that time of year is that wheat prices begin to rise or at the very least remain flat. Falling prices would indicate an over supply of wheat. The rising or flatness may have begun earlier, or it may begin later, but not by the end of September. The main thing we don't want to see is wheat prices falling after September. If wheat prices are falling in the time period mentioned above, then we do not have a normal year for these futures and we want to avoid this trade. No one knows for sure what weather conditions will be between the first week in September and the time the that wheat inventory figures are known. No one knows if exports will be up, down, or flat compared with the previous year. It is the seasonal anticipation that should prop up the price of the wheat futures.
Obviously, this same sort of technique could be applied to any purchasable commodity that can be expected to experience increased activity seasonally.
So, lets look at a wheat chart. We want to select the best the best possible time to enter. Experience has shown that the two best times are as follows:
? An announcement by the government between September and October that it export sales of wheat have increased materially - a buying situation
? A report showing a greater than expected inventory of wheat in September through November - a selling short situation.
At "A" we see announcements coming from government reports that demand for wheat for export is great. It is the middle of September. People rush in to purchase wheat futures. However, from the look of this chart, overall demand for wheat was not very good. Actually, the year shown was poor for wheat most of the time.
Later, beyond the time frame in which we are interested, at "B" we see that the government crop report for January was really bad for wheat. There was simply too much of it. Wheat prices began to plunge. What stopped the plunge? Anticipation of planting problems due to unusually cold weather.
ABOUT JOE ROSS:
Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.
Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of "The Law of Charts?." Joe was a private trader for most of his life. In the mid 80's he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach. He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.
Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA. Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.
MORE RESOURCES updated Wed. April / 14 / 2021
Best Forex Trading Platforms In 2021 Yahoo Finance
Trading Lots and Other Eco-Friendly Forex Trading Strategies Blue & Green Tomorrow
A comprehensive understanding of Forex trading The Portugal News
Three Men Indicted for $30 Million Foreign Exchange Fraud Scheme Department of Justice
How Does The Foreign Exchange Market Work? Investment U
Exploring the Benefits of Forex Trading Business Devdiscourse
Should You Invest in Dogecoin? | Stock Market News | US News U.S News & World Report Money
Bluesky Digital Assets Corp., Common Shares Will Commence Trading on the OTCQB in the United States - StreetInsider.com
Bluesky Digital Assets Corp., Common Shares Will Commence Trading on the OTCQB in the United States StreetInsider.com
Currency Market: Correlations GBP/USD, EUR/USD, USD/CAD, USD/JPY, USD/CHF, AUD/USD and cross pairs - FXStreet
Currency Market: Correlations GBP/USD, EUR/USD, USD/CAD, USD/JPY, USD/CHF, AUD/USD and cross pairs FXStreet
Digital Currency Trading Platform Market Future Trends, Share, Size and Manufacturers Forecast - openPR
Digital Currency Trading Platform Market Future Trends, Share, Size and Manufacturers Forecast openPR
JPMorgan cuts emerging market currencies to 'underweight' Investing.com India
EOS Climbs 10.41% In Bullish Trade Investing.com India
US Inflation Analysis: Doomsday will wait, but second “sell the fact” on the dollar looks near - Forex Crunch
US Inflation Analysis: Doomsday will wait, but second “sell the fact” on the dollar looks near Forex Crunch
18 year old college drop out earning 6 figures a year via online trading Yorkshire Evening Post
Trading Support and Resistance DailyForex.com
China’s currency set for worst month since US trade war Financial Times
Forex Broker Leaks Millions of Customer Records Online Infosecurity Magazine
Thane: Anti-Extortion Cell arrests 42-year-old for duping 230 people of Rs 4 crore - Free Press Journal
Thane: Anti-Extortion Cell arrests 42-year-old for duping 230 people of Rs 4 crore Free Press Journal
What Is Forex Trading? Forbes
NY Fed Survey: One-year median inflation expectations rise to 3.2%, highest since mid-2014 - Forex Crunch
NY Fed Survey: One-year median inflation expectations rise to 3.2%, highest since mid-2014 Forex Crunch
EUR/GBP to continue piling up gains after establishing a bullish reversal week – Credit Suisse - Forex Crunch
EUR/GBP to continue piling up gains after establishing a bullish reversal week – Credit Suisse Forex Crunch
Bitcoin in your brokerage account: how to trade cryptocurrencies or buy an ETF - The Philadelphia Inquirer
Bitcoin in your brokerage account: how to trade cryptocurrencies or buy an ETF The Philadelphia Inquirer
Everything you need to know about payments in Renminbi World First Foreign Currency Exchange
The 6 Best Online Forex Trading Classes of 2021 Investopedia
Peter Taberner, Author at The Motley Fool UK
Forex Trading – How Do I begin? - NuWireInvestor NuWire Investor
Daily market commentary: The dollar is recording some gains against other major currencies - Leaprate Forex Trading News
Daily market commentary: The dollar is recording some gains against other major currencies Leaprate Forex Trading News
How to Trade Commodity Currencies in Forex Trading Moneyshow.com
Things You Need To Know Before Entering Forex Trading NuWire Investor
A beginner's guide to Forex trading BusinessMole
Forex Market: Unlocking Opportunities for Investors Visual Capitalist
Next Forex Trading Terms You Need to Know Before Trading North Forty News
Best online brokers for forex trading in April 2021 Bankrate.com
Forex Brokers: Are They a Scam? | Investing | US News U.S News & World Report Money
The Currency-Market Snoozefest Might Not Last The Wall Street Journal
Most profitable forex pairs Capital.com
A guide to forex trading instruments - Boca Raton's Most Reliable News Source - The Boca Raton Tribune
A guide to forex trading instruments - Boca Raton's Most Reliable News Source The Boca Raton Tribune
Making Money By Forex Trading The FINANCIAL
XRP price rally and Ripple's legal victories could mean settlement with SEC impending - Forex Crunch
How to Trade Forex? - A Guide to Forex Trading in 2021 DailyForex.com
Timing Entry And Exit When Forex Trading - NuWireInvestor NuWire Investor
Global Foreign Exchange Software Market Top Players 2026: eMoneyexchangesoft, Thomson Reuters FX Trading, AFEXDirect, Banking Circle Real-time FX, Biz4x etc. – SoccerNurds - SoccerNurds
Global Foreign Exchange Software Market Top Players 2026: eMoneyexchangesoft, Thomson Reuters FX Trading, AFEXDirect, Banking Circle Real-time FX, Biz4x etc. – SoccerNurds SoccerNurds
COVID-19 and the Forex Market in 2021 Finance Magnates
Foreign exchange data wars heat up as rivals take on ‘Big Two’ Financial Times
Understanding the Gaps in Forex Trading Finance Magnates
Volatility in North Korea's Currency Trading: Does a Rising Won Mean Trouble Ahead, or Progress? - 38 North
Volatility in North Korea's Currency Trading: Does a Rising Won Mean Trouble Ahead, or Progress? 38 North
Best Forex Trading Platform Choices of 2021 Fortunly News
Forex Trading Industry Statistics and Facts 2020 DailyForex.com
is Forex Trading a Good Way to Make Money Online ? Love Belfast
Forex Trading: What you need to know before investing Loop News St. Lucia
Everything To Know About Getting Into Forex Trading GQ Australia