Day Trading Blues – Look To The Fundamentals

With all the data flying around each day – it’s near impossible to put everything in neat little compartments, all organized and understood. We see markets rise on “bad news” and sell off with the good, then do the complete opposite only a week later. We’ve got the “fear of war” one day, then the “celebration of peace” the next. The market is a meat grinder, and unfortunately – you are the beef.

So when the short-term / intraday day action isn’t providing much opportunity – what’s a trader to do?

How can you feel that you’re “moving forward” when the day-to-day grind is doing nothing but frustrating you, and possibly grinding your account to dust?

Step back. Re focus, and look for the things that “you can make sense of” – and start working out from there.

A simple example of what “I’m doing” while I sit idle in a number of trades that are essentially “going nowhere fast”. I ask myself…..Kong….what “do” you know? Where can you focus your energy as to keep this thing moving in the right direction.

I immediately turn to the fundamentals.

Do you agree with me ( after everything you may have read / researched as well ) that China is set to slow in the following year / years?

I can’t be bothered to go over this again but encourage you to read this simple breakdown, then get back here.

We’ll outline some trade ideas next.

5 Ways China Slowdown Will Ripple Across Globe.

7 Responses

  1. Rob March 4, 2014 / 6:59 pm

    Hey Kong,

    Question about your fundamental analysis. Do you have a background in Finance, or Economics? That is, did you work in either of those industries prior to turning professional trader? Also, just curious, if you attended college, did you major in one of the above?

    I am trying to understand Fundies better, but I did not study either in college. I was wondering what you recommend one do to learn how to analyze the fundamentals better?



    • Forex Kong March 4, 2014 / 7:19 pm

      I’m a musican by trade ( studied jazz at the highest level, then on to electro acoustic composition, film scoring, commercial music production etc ) working several years in studio / production.

      I am fanatically interested in things that offer a challenge ( math and physics always ), hence the interest in computers, the internet / search engines, space, and most recently – foreign exchange.

      Learning the fundamentals “as I see it” doesn’t really have much to do with “finance” as much as it has to do with your vison/perception and your ability to apply it to what you see “going on around you”.

      I started at the top ( as corny as it may sound ) having “Earth” at the top….then started working my way down, where I immediately ran into the U.S.A / Fed as well China. From there I started to study the relationships of countries / currencies based in simple things like “geography and trade” as well a given currencies “role” globally. Throw in the interest in “geo politics” and after a while – the picture becomes clear.

      I’ve always looked at it “creatively” and more like a “puzzle to solve” than anything else.

      This serves as the basis for “my” fundamental views.

      I’ll be honest…I look at it from more of a “creative angle” than I do go digging through spreadsheets and studying charts and graphs, and I enjoy seeing “how things play out” from a front row seat at the biggest chess match around.

      It’s “global chess” and I don’t think you need a finance degree to play.

      • @frenchdna March 5, 2014 / 2:44 am

        I’ve been hanging around here for more than a year now. It’s cool to hear about your background, your interests, it makes perfect sense. You indeed have a creative view, or i’d rather say way of thinking. It makes me want even more to have a beer on a beach with you, you’re the kind of guy i think i’d enjoy having a conversation with. And i bet i’m not the only one here who thinks that.
        Cheers Kong, keep it up!

        • Forex Kong March 5, 2014 / 3:05 am

          Hey thanks frenchdna.

          I imagine it “takes one to know one” so…right back at you – beers on the beach it is! ( sometime….somewhere? )

          Seriously though…it’s been interesting to say the least – applying what I know / my background and this “forex trading thing”. I love things with lots of moving parts / puzzles as well with my interest in culture / travel / Earth etc.. everything really came together.

          I’ve read that every trader needs to “find their edge” so perhaps in my case the “unique” way of looking at things – is it!

          Thanks for the kind comments. Now taking on this “blogging thing” – It’s a “thankless world” out here!

  2. ezyfx March 4, 2014 / 10:02 pm

    We certainly don’t need a finance degree to play in the FX market… just look at how poorly most of the highest educated economists in the world perform!!!

    We only need a few attributes, and education ain’t one of them.

    1 – Patience… if you are patient, the trades will come to you.
    2 – Lack of greed… if you are consumed by greed you will be trying to turn $2,000 into $3,000 within a month.
    3 – Lack of fear… if you are cntrolled by fear you won’t close bad trades when you ought to, and you won’t let the winners run when you should.
    4 – Be open minded… a closed mind is controlled by rigid rules and is not willing to look at new angles, scenario’s etc.
    5 – Keep it simple… the KISS rule.

    After looking at the above, we then need to formulate a plan based on these principles.

    My plan is simple… it’s easy to understand and implement.
    a – I have learned to recognise a few basic candle stick chart patterns
    1 – doji… indicates indecision.
    2 – pinbar… also called hanging man or evening star… indicates rejection.
    3 – railroad tracks… on the next higher timeframe is very likely a pinbar.
    4 – engulfing candles
    b – I accept and understand that markets are primarily controlled by world events… political, financial and catastrophical geophysical events etc.
    c – I only trade off daily chart patterns… I may use a 4 hour chart to narrow an entry, but I really only trade daily charts.
    d – I don’t use indicators. I do use support/resistance and to a lessor extent, fibonacci’s.
    d – all my trade platforms are using charts set to New York close… that gives me 5 clear 24 hour candles a week (no pissy little “sunday” candle that you American’s seem to love)

    Because the markets open on a Sunday in Nth America, Nth American’s think there’s 5½ days trading a week… its simply not true, its just an idiousynchrosy that they need to eliminate from their narrow minded thinking.

    I know and accept that ALL pairs will have a big trending movement almost every year or two… at least 3,000 pip moves.

    If I am patient and not greedy or fearful, then I know I will get on some of those big moves.

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