Here’s something I came across on Trade2Win.
I am a newbie, have been reading forex stuff for about 6 months on a daily basis.
I am now interested in trend trading over timeframes of few days to a week or so. Where I can make a trade and come back when I need to close, without having to watch the charts all-day long.
After a lot of reading through the forums, I am not very interested in technical analysis or price action, but more on the fundamentals/news etc. Personally I believe most of the TA is bs.
So, should I start studying macroeconomics? I am already a university pharmacy student, but I would like to study economics on the side, out of interest.
Could anyone advise me on whether I should go ahead with this, and also whether there are any good books or resources I should go to for studying this subject matter.
The purpose of studying economics would be for me to have a deeper understanding of the world and of price moves in forex – since right now I’m not all that certain about many economic issues. Also so I can understand other markets like commodities etc.
The biggest issue this individual has with their plan is the timeframe. Fundamental analysis can be very useful, but it’s only applicable in timeframes that are generally measured in months or longer. You cannot trade fundamentals when making end of day trading decisions in the forex market. The big picture things which drive trends just don’t change that frequently.
Now, if you’ve been reading this blog for any length of time you’ll know that I’m primarily a technical trader and market analyst. Clearly I don’t think technical analysis is “bs”, though there certainly are many technical methods which I personally find to be based on flimsy logic, but then I just don’t use them. At the same time, fundamental analysis plays a large role in my stock market trading, though significantly less when I trade forex and other markets.
Getting back to the trader’s question about studying economics, the answer is clearly “Yes”. But for a market like forex that means focusing on macroeconomics. The micro stuff and subject matters related to social planning and whatnot might be interesting, but don’t really help the forex trader.