Fundamentals to avoid

[fairwind]

Hi folks,

I am aware that some traders trade the announcements and other traders simply avoid certain announcements. I believe I am one of those who would be better off to avoid the important announcements, due mainly to the fact that I dont understand fundamentals.

The dilemma I have is: which ones do I avoid? It is clear that to avoid ALL announcements would be to avoid the FX market !

So, can you traders who 'avoid', tell me which announcements you avoid? Thanks in advance to all who respond.


Good trading to all..................

[Truville]

Originally posted by fairwind

So, can you traders who 'avoid', tell me which announcements you avoid? Thanks in advance to all who respond.

I’d say the ones that get the most ‘press”. If it’s being talked about a lot, avoid it. The NFP announcements sure generate a lot of ink.

[Wallace]

Hi Fairwind, depends on the timeframe you're trading. Daily, 60 and possibly 30min trading wouldn't most often require closing and re-entering the market, or avoiding.

The monthly US Employment caused chaos back in July because it was so over-estimated — all the bets were wrong, brokers were also caught short resulting in the 'trading release' warnings.

For your own verification, you might consider listing the various releases and trying to check back on the 60 or 4H to see the price action at the time of the releases. If you look at the 7 and 8am EST 60min eur/usd bars for last Friday's Employment release you'll see there's less than 10 pips spread between the Closes.

Generally releases don't appear to result in trend changes, they're — from my point of view, interim betting 'opportunities', a little excitement in the otherwise pedestrian passage of the price movement.

[fairwind]

Hi folks,

Thanks for the responses. Wallace's comment is one I want to believe as it would be a lot simpler for trading:

"...Generally, releases don't appear to result in trend changes, they are, from my point of view, interim betting 'opportunities', a little excitement in the otherwise pedestrian passage of the price movement...."

Last Fridays Non Farm Payrolls is a case in point, as he points out. Intraday reversal in EUR/USD from about 10:00 gmt at R of approx 1.3250, pullback without a new high, and then continuation of reversal to 1.3050 levels.

Thanks again folks and

Good trading to all........................

[Wallace]

Fairwind, think it's necessary to qualify "...Generally, releases don't appear to result in trend changes".

Price movement is a result of all trades irrespective of the reasons the trades were made. There are occasions, and not infrequent when the price 'moves sideways' for some time, hours/days prior to a 'release'. The price/traders are setting up for a particular price move that will occur after the release, setting up for the release, setting up with the expectation the data WILL BE such and such, and a trend change does occur.

'Trend change' is you appreciate relative; such changes may be a Correction or Retracement — temporary, or a new Wave — directional change, and such releases, occasions, are then significant.

The difficulty besides listing particular releases to avoid is not knowing whether there'll be a large or small reaction to 'this' release — this time, or if 'this' release will turn out to be a non-event — so much for 'fundamentals'. There are even some releases/reports that are able to be purchased x minutes prior to their release time, tho not Gov releases. The pure chartist/technical analyst ignoring all 'fundamentals' may or may not fare any better in interpreting what the price is doing and going to do.

Bottom line ? if in doubt, stay out.

[fairwind]

Thanks Wallace,

That was very informative. It seems to confirm my suspicion that prices in FX fluctuate from level to level, more than anything else. It would explain why MA's dont seem to work all that well ( that will draw an argument, that I dont want ! ).

I have focussed on S/R levels a lot lately and they are making more sense to me. I have been examining them as possible entry/exit points, confirmed with other indics.

Given:
"...depends on the timeframe you're trading. Daily, 60 and possibly 30min trading wouldn't most often require closing and re-entering the market, or avoiding...(see Wallace above)"
I think I will go back to my old strategy and simply ignore fundamentals, and use a tighter stop!? I use 1 Hr as my primary chart.

"...Bottom line ? if in doubt, stay out...."
I have been doing a lot of that, LOL.

Good trading to all.......................