Many years ago, when I was much younger, and my mind was (supposedly) more flexible and faster, I prided myself on my prowess in fundamental analysis. Today, I make my trading decisions purely on technical analysis I forego extensive fundamental analysis in trading decisions for two reasons:

1. There is an overwhelmingly huge amount of it available making analysis time consuming and difficult.

2. Even if I were proficient enough to overcome number 1, I still do not know how the market is going to react to the same data that I have analyzed.

I consider myself to be a rational creature – and the markets today are often irrational. I pretty much belong to the Austrian school of economic thinking, but can agree completely with at least one statement of Lord Keynes: “The market can remain irrational longer than you can remain solvent”.

Technical trading does not completely ignore the existence of fundamental events – it just provides a means to trade in spite of an ignorance of fundamentals at any given time. Of the two kinds of fundamental events that affect the market – those that are pre-scheduled and those that are random – a technical trader avoids the market when the prescheduled are about to happen – and prepares to leave the market immediately when the random happens.

Fortunately, between the occurrences of both such fundamental events (even in today’s volatile environment) there is an ample amount of time to trade most markets – often for numerous times. I you want to learn to trade a good technical trading method you should order See the Music of the Market – currently offered at a substantial discount at www.tradingbetweenthelines.com.

 

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