Why you need to pay attention to Fundamental Trading no matter how you trade:
The two common different sections of trading are Fundamental trading and Technical trading. Now I work normally as a technical trader. A trader who analyzes chart patterns to determine possible entries and exits from the market. Even though I trade technicals, fundamental trading is part of my strategy. Fundamental trading helps me prevent unnececary losses while only improving my trade chances. It is a no loss addition to a trading strategy. This is because a quick fundamental analysis can be added on to your trading, providing you with a clear overview of the markets.
We need to pay close attention to key fundamental trading signals in order to minimize losses. These signals are in the form of key news announcements, market wide effects, and inter connected markets. In this video, we show how traders who ignore these fundamental trading signals would face unexpected trading losses.
Why this obvious example of post election trading on the ES500?
It may or may not seem to be an obvious time to avoid trading in the markets for you. Either way, you need to be aware of what is going on, and how it will effect the market volatility you plan to trade. Elections, news announcements, and world events can easily effect markets that may even be quite detached.
Price of Oil and Canadian Dollar:
Another example is the price of crude oil, and the Canadian dollar. When the price of oil was suffering from bad announcements, and Canada’s economy was quite closely related (but not entirely by any means), there was a loss of faith in the Canadian dollar. This was not due to only the export price of oil. It was due to the infrastructure around oil in western Canada. The price of a commodity dropping effects more than that single commodity. It effects a wide swath of futures, stocks, and Forex crosses surrounding it.
It only take a matter of minutes:
To check for major announcements or events before you day trade takes almost no time. We cannot prevent all unforeseen events, as the market will react faster than we can trade, but having known events marked on our calendar will help us avoid preventable losses in the market.