Advisor based on fundamental analysis - page 7
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kailex, you should give it a try and see if it works. I'll be waiting for the results.
But I would dig in another direction...
I don't think you could, in your own experience, evaluate several dozen different FA indices all at once.
It's almost impossible for a person to do that, in my opinion. You can only reason somewhere logically or on the basis of basic FA principles. A computer, on the other hand, can do a multi-factor analysis and may well come up with something. I agree, maybe most of the news are unpredictable, but if you consider all the factors, which seem to have little effect on the currency in question, I think interesting results may come out. It is just that some news can contradict other news or indicators. When people know or feel it, the news turned out to be in favor of one currency, but it was dumped. And vice versa. I think in a complex analysis of the data you can find these patterns. And get at least some probability of confirmation of market trends. Again, I repeat. FA is not a panacea. We take TS on the basis of classical principles of TA and MM. And we complement it with a part that gives us information, approximate or sometimes erroneous, but still it reflects the general mood of the market and economic situation in the countries. I think it would be a big plus for any TS. After reading the comments of some experienced traders, you can understand that many also consider the FA manually in their trading - they analyze the economy and the latest news and keep it in mind when trading with TA. You can make the same mistakes here too. So it is better to let the computer make occasional mistakes, evaluating it automatically and very quickly.
kailex, you should give it a try and see if it works. I'll be waiting for the results.
But I'd dig in a different direction...
What direction would you dig in?
kailex, you should give it a try and see if it works. I'll be waiting for the results.
But I would dig in another direction...
I don't think you could have experienced several dozens of different FA indices all at once.
I didn't say I analyzed many FA indices at once. I took a couple of strong news (like pairols), looked for a short period of time how the price behaves after the release of this news, and realized that in the short term it does not work in forex. I recommend you to look too, before you start building your complicated model.
Maybe in Forex it is not the FA that influences the price but vice versa. Or maybe there is no such correlation and the price moves in a wide corridor by accident. It has been discussed many times.
Since the tools I have for working on FX are not sufficient for making a stable profitable trade, I try to look for a statistical advantage to make a trade. I use historical data as a basis.
This is a very promising area. Here you can find time series of the main fundamentals that may be needed:
http://www.research.stlouisfed.org/fred2/
PS: There are interesting correlations and the fundamentals are better predictors (at least I think so)
This is a very promising area. Here you can find the basic time series of fundamentals that might be needed:
http://www.research.stlouisfed.org/fred2/
PS: There are interesting correlations and the fundamentals are better predictors (at least I think so)
Yeah, that's my point exactly. I find it very useful to analyse and forecast according to FA data. Forecasting, yes, because the fundamentals depend on economic and political factors. They can never be random. But simple price movement on the chart is almost a random process, because it depends on so many factors and it is not a good idea to forecast it apart from FA. This is why a lot of posts like "where to get or how to write a profitable Expert Advisor" are written. Of course there are sophisticated profitable TS systems based only on pure TA in which there are a lot of ideas of TA, MM etc. But most systems are either unprofitable or simply break-even. And no more than that.
Считаю очень полезным заняться анализом и прогнозом согласно данным ФА.
That's up to you, of course.
Decided here for interest to see how the market reacted to the last interest rate change in the USA on 18.03.08 at 18-15 GMT (source: http://www.teletrade.ru/analytics/calendar/16_03_08).
FOMC meeting announcement
Forecast - decrease of 0.5%, fact - decrease of 0.75%. The % decrease is clearly a negative for the USD, moreover it is 25 basis points above the forecast. Where was the market supposed to go according to this FA? According to the FA, the quid should have fallen.
TOTAL of the day: EUR/USD fell during the rest of the day by about 160 pips, respectively GBP/USD fell by about 170 pips. I did not look at the other pairs.
In other words, USD has risen by 1.5 pips in 5 hours. It has been a week since that day and the Euro and Pound have still not recovered yet after such fundamental news. Who needs such drawdowns?
That's why I'm saying that even if you knew the foms decision the day before this news was released, you HAVEN'T been able to take advantage of this insider. And you suggest using a whole index system to predict quotes....
I find it very useful to engage in analysis and forecasting according to FA data.
That's up to you, of course.
Decided here for interest to see how the market reacted to the last interest rate change in the USA on 18.03.08 at 18-15 GMT (source: http://www.teletrade.ru/analytics/calendar/16_03_08).
FOMC meeting announcement
Forecast - decrease of 0.5%, fact - decrease of 0.75%. The % decrease is clearly a negative for the USD, moreover it is 25 basis points above the forecast. Where was the market supposed to go according to this FA? According to the FA, the quid should have fallen.
TOTAL for the day: EUR/USD is down about 160 pips for the rest of the day, respectively GBP/USD is down about 170 pips.
That's why I'm saying, that even if you knew the foms decision one day before this news was released, you probably wouldn't have been able to use this insight. And you suggest using a whole index system to predict quotes....
We can use this knowledge for further reasoning.
Yes sometimes after the news breaks we cannot judge what will happen. BUT!!! We can tell that there should be a strong movement after the release of important news.
We can use this knowledge for further reasoning.
Strong movements are possible on the day the news is released, but not always...
Therefore the information as it is given to us is not sufficient for successful prediction of quotes unfortunately.