What is the most common mistake in FX trading ? That is a complex question, for us it is TIMING.
Fundamental Analysis is fantastic. I allows investors/traders to develop a FRAMEWORK on how to deploy RISK CAPITAL. It is a need and something that will probably pay off in the LONG RUN. But is it the tool FX traders need to execute ? We think NOT. Fundamental analysis may be a hindrance, and many times it gets in the way of sound execution.
We rely on charts. We feel that finding the proper ENGAGEMENT ZONES is crucial to trading, and it is our NUMBER ONE tool.
Let’s use the EURUSD as an example. The view on the EUR is polarizing. Our view is that the USD is going to RALLY, and at some point RALLY SUBSTANTIALLY. Does that mean that we SELL EUR here ? ABSOLUTELY NOT. Lets look at the FRAMEWORK (CHART):
From this chart, even though our BEARISH VIEW is probably fundamentally strong (we can argue that subject in length) we do not want to be sellers, but BUYERS around 1.1625.
Our point is simple: FUNDAMENTAL ANALYSIS is a necessity, but trading, and RISK CAPITAL DEPLOYMENT is all about finding the proper ENGAGEMENT ZONES and being able to read and interpret a chart properly.
We hope these explanations help. We will be more active explaining our process in an attempt to illustrate the purpose of this site.
We hope you find this useful. If you do, we would love to hear from you, email@example.com.
Word of mouth and testimonials are extremely important to us.
The Biscuit Team.