Trading as deception
The more I think about trading, the more it is actually based on deception. As most people know, forex is essentially zero sum, you make $1000, someone else loses $1000. So basically the large institiutions are trying to make money out of everyone, and also the retail market - and recently the retail market has increased, so there is a lot of interest in banks deceiving traders. Instead of making money out of each other (which is tough), I would think the banks are getting more focused in making money out of retail clients. Thus a lot of information out there, reports, rumors etc are designed to deceive - there would be no reason to tell the public the truth because they make less money that way. Thus when trading, its almost best to shut out the media and distractions and just focus on your plans.
It is quite possible that DD brokers do not provide true information or a selective group in media might provide incomplete info. But there r many credible sources to learn about financial world.
Stick to your rules
I found that fundemental understanding really doesn't help in trading. In trading you usually operate with a narrow stop loss - even 100 pips is narrow, and prices frequentely skew 500 pips away from fundementals.
Large institutions do try to make money out of small traders. It is quite possible that they spread false information in order to get advantage. But there r many Pros out there making good money as an individual professional trader. So false information will have no affect if u dont rely on them and rely on ur own chart reading skills.
The only real fundamental news that has an effect of price movement is the bank holiday, based on what I have noticed so far.
![[grin]](/themes/default/images/smiles/grin.png)
The government watches over the people. But who watches over the government? It's the corporations.
Its not a matter of false information - its that the information does not make a consistent difference to the movement of the market. It is the positions of the traders that matters, rather than information.
Yeah the time difference of news does make a difference, but it is negligible compared to a bank holiday. I still trust indicators though, but it will move only when the market enters the active hours of the day.
The government watches over the people. But who watches over the government? It's the corporations.
One thing about fundemental information that I forgot to mention is that it is difficult to assess whether the market has 'priced it in.' In my mind, it is more like whether they wish to counter retailers as opposed to being truly priced in. How is it possible to assess whether something is priced in or not? Sometimes it is sell the fact, buy rumor, sometimes it is buy the fact which makes it very difficult to trust fundementals.
Well, for me it's too complicated to tell if the news release will affect prices adversaly. Sometimes a trend will momentarily get reverse when news comes out especially if it goes below the forecasts of analysts. A example would be a quarterly jobs report by the fed, which can sometimes cause a slight reversal on the USD. But what makes it more complicated are the series of news releases happening simultaneously all over the world that you sometimes can't leave your terminal because of trying to see how the market reacts, but this can be mitigated depending on your experience in addition to mobile trading.
I think the best strategy to deal with so much fundamentals is to trade long term and use very small lot sizes to counter these reversals. There are also indicators(which ever suits you) that can help indicate trend reversals. This is what I have noticed so far. I have not heard of any fundamental news that completely threw off a trend into the other direction in a very long period of time, because if a sharp reversal happens big institutions such as banks will intervene to prevent throwing off their currency which will adversely affect their economy, a good example of this is SNB and BOJ.
To sum it up, it like this:
1. The big guys start trading and the start the trend(banks and institutional investors)
2. The pros then wait for signals and ride on the trend while it is still hot.
3. The newbs(majority) see the trend late and only get in only when it starts to die down and reverse.
Of all the aforementioned above, number 3 has to be the one easily affected by news releases, while number 1 and 2 just relax and go with the flow.
Everybody has been number 3 before but it will take a lot of accounts blown and drawdowns to get enough knowledge and experience to get to number 2.
![[aww]](/themes/default/images/smiles/aww.png)
The government watches over the people. But who watches over the government? It's the corporations.
To sum it up, it like this:
1. The big guys start trading and the start the trend(banks and institutional investors)
2. The pros then wait for signals and ride on the trend while it is still hot.
3. The newbs(majority) see the trend late and only get in only when it starts to die down and reverse.
Of all the aforementioned above, number 3 has to be the one easily affected by news releases, while number 1 and 2 just relax and go with the flow.
Everybody has been number 3 before but it will take a lot of accounts blown and drawdowns to get enough knowledge and experience to get to number 2.
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Nice post btw. Number 1 is obviously impossible to follow because they create the trends and reversals. You need a lot of cash to do that. Number 3 is the most easily affected and it is where all retail traders are placed, but it is impossible to go with the flow if you listen to news. The other thing with news is - when was the last time you heard good news for a currency? All the news is constantly bad for the last 2 years!