Longer term, exchange rates are driven by differences in bond yields set by central banks, but right now every major central bank is targeting yields near zero, so trends are very weak. Short term trading, such as intra-day, is driven by news announcements (mostly scheduled--see this econ calendar for example: Economic Calendar - FXStreet ), and by technicals (chart reading). Forex is widely regarded as the most technically driven of all markets. The money center banks reportedly put their best traders at the forex desks, so it is a challenging environment to trade in. I personally recommend this book as an intro (the best I have read) to currency trading: The Everything Guide to Currency Trading: All the tools, training, and techniques you need to succeed in trading currency: Borman, David: 0001440531390: Amazon.com: Books Short term trading is all about market psychology. Fundamentals only matter for longer term holdings. Macro theory isn't going to help you much if you are day trading. It's all about support, resistance, price momentum, statistical noise (random price movements), short term reactions to news events (mostly scheduled), and traders at the NASD firms who have exclusive access to "level 3" software that allows them to see where the stop and limit orders are (although I don't know whether they can distinguish one from the other or not), and they WILL use their knowledge many times to try to force you out at a loss, especially when markets are slow (watch how fast the bids and asks are flashing) or when a lot of stops are clustered in one area of the chart. The Tokyo session is especially prone to gaming the retail trader, in my experience.
It depends. The longer you hold, the more fundamentals matter, but for short term trades, it's mainly about technicals and news (including weather events for the ags and sometimes oil). Any instrument can be traded short term (a few minutes to a few days, or even a few weeks) with very little knowledge of its details. However, price moves somewhat differently in some markets, but that's a chart thing.
LOL, yes! Not just Chinese companies. Think of Tesla, GE, or HSBC, and a host of lesser lights. And "zombie" companies are all over the place these days. I have listened to interviews with shortsellers on youtube. Very interesting what they have to say. Fund managers don't care any more whether the companies they buy for their clients are financially unviable or even outright criminal enterprises (regulatory enforcement is a joke most of the time). I have heard some of these short sellers say out right that certain companies which they specifically named in their interviews are criminal enterprises, not merely badly managed, and they aren't afraid of being sued because the companies in question don't want their dirty laundry getting aired out in court.
I would say just the opposite. BTW, most people jumping in the stock market today are not investors, just speculators. That's okay if they know what they're doing, but I suspect most of the robbin hooders and their fellow travelers are lemmings. When the market crashes again, they won't know what hit them.
https://elitetrader.com/et/threads/...solid-trading-plan.340340/page-4#post-5031706 https://elitetrader.com/et/threads/...t-right-here-baby.335635/page-18#post-5309309 https://elitetrader.com/et/threads/...solid-trading-plan.340340/page-2#post-5011924 patient, focused, disciplined
Sure sugar lump and how do you come up with a "game plan" in the first place? Let's say you know nothing about the market at all, how do you put it all together? Scrape rules from the internet? Books? That's how you end up like everyone else here on ET. You have to sit down, trade small and see what works for you...and after 1000 trades you will br able to come up with a gameplan...your own
Hmmm I see, thanks I think I may not have the correct view on the correlations of markets on SPY. I was thinking over the weekend I probably can't take these large swings in my account. I did say before that I would start with 1 contract, but I don't know why I didn't. I will start doing 1 contract starting Monday. I understand markets are fractals and the markets is a metagame I remember reading a similar question to Keynes beauty contest. Here it is: Pretty interesting game I picked 0. Spoiler: Answer
With online school I have leeway to trade, markets except if I have test dates. I did always want to open a forex account, but I am not sure why I have not, most likely because I did not know which broker to go to. I think. For TD Ameritrade I can't trade forex because I am under capitalized.
"I may not have the correct view on the correlations of markets on SPY." -- Ah, there's the problem with formulas or "laws" versus heuristics (flexible rules of thumb). Let's say oil goes higher. Depending on other market conditions at the time, this may be interpreted as either evidence the economy is strengthening, or evidence that rising oil prices are threatening to choke off the recovery! To understand what "the market" is thinking, you have to look at how prices are moving in other sectors too. It's as much art as science. Markets are inextricably linked to the real economy, but the real economy acts more like a living organism than like a machine. To understand the economy (and the markets) to the extent that they can be understood, study up on "complex adaptive systems" or "science of complexity." From time to time (wait for a "sale"), _The Great Courses_ offers an excellent video lecture introduction to this field, which was developed by physicists at Santa Fe Institute only in the 1980s. If you buy it, take notes! Things like VaR (Value at Risk) models (which assume a non-existent Gaussian price curve, as Nicholas Taleb explains in _The Black Swan_), rigidly mechanical systems trading with zero discretion, buy-and-hold, index investing (blind monkeys throwing darts at everything without any due diligence), the efficient market hypothesis (which is used to justify index investing even though index investing makes the market *less* efficient!) are all inferior tools because they think of the market as a machine that can be comprehended, measured, and fine-tuned. In reality, the market is a complex, adaptive system, ever changing and with no rules that cannot bend. That is why every mechanical system eventually stops working and why the developers of these rigid systems are constantly at work programming replacements, and why flexible rules of thumb applied with discretion, common sense, and a constant readiness to adapt to changing conditions when appropriate will generally yield superior returns, especially as time goes on. It is also why there is no substitute for experience in trading (although experience is not everything--it's a thinking man's game).
I suggest looking at firms that specialize in forex and will also let you open a small account and trade mini-lots or micro-lots. TDA does not allow microlots, only minilots. Trade with the smallest lot you can for practice. I use TDA (even though it's platform is not very user friendly for FX) because I like the flexibility of being able to quickly shift funds from FX to futures to stocks, but Oanda which specializes in FX has a huge number of FX accounts, so I suspect their barriers to entry are not very formidable. Maybe you can check them out. You need to get used to the leverage, and the "trickiness" of forex price movements, without risking very much money during the learning process. There is a broad consensus that it is the hardest market to trade, so if you can learn to trade it profitably, you can probably trade anything. FX also allows you to start with very small positions and scale up in small increments as your account grows--if you can ride the forex tiger. Many give up in frustration, and there are certainly easier markets to trade. Go to Amazon and find a good book on position sizing (bet sizing). If you position too big for your account, it is only a matter of time until you go bust in any leveraged market (including real estate). If you position size well, even a very mediocre system that is only marginally profitable can eventually make you a fortune.