A Word About Fundamentals

Monday, 10/6/2008, 2.32am EST

Last week I sent out an article I found online entitled “Dennis Gartman’s 22 Rules of Trading”. For those of you that haven’t yet had a chance to go through it, I highly recommend that you do. You can find it here: http://nobrainertrades.blogspot.com/2008/10/dennis-gartmans-22-rules-of-trading.html

As you know, I read a lot of what goes into these forums and see strategy after strategy, most of which are purely technical. Money, and I mean serious money, can be made, but there is SO MUCH MORE to becoming a successful FX trader than what most people advertise. And I’ll express this over and over again. I don’t care what anyone tells you; you have to understand fundamentals.

People don’t want to hear this. They want an easy way out. I’m trying to make it as easy as it gets, and will continue to do so.

You have to remember that your trades are competing with those taken by world class investment banks and hedge funds. They have lots of brains and lots of strategies that get implemented daily. You’re not playing “Bingo” here.

Back to the article. Item number 10 reads as follows:

10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market's technicals. When we do, then, and only then, can we or should we, trade.

I’ll update you regularly in daily updates, as much as I can about the fundamentals of what’s going on out there, and I’m doing it for a very good reason. When taking trades I’m mainly looking at:

Fundamental backdrop
Sentiment
Technicals

….all 3 of which I try to outline in updates, and I’ll do my best to keep the ball rolling. My recommendation is read this stuff every day, and soak it all in. I’ll do my best to keep it brief so you get the general idea. After a while it becomes second nature. I have the experience to help you out here and I promise to do so with the best of my ability. Its not rocket science; it’s a skill, and like anything else, it can be learned.

Sounds great in theory, but what about the practical side of it? My recommendation: read the news, plain and simple. Read articles from credible news sources like Bloomberg, the Wall Street Journal and Reuters to see WHY things are happening in order to understand how they will be in the FUTURE.

One of the best parts about me assembling all this stuff is seeing trader after trader send me comments or post levels that are in line with what we teach and watching them pay off like nuts. People that have started from scratch have been sending me things that basically makes me feel like a (excuse the expression) proud father. Everything here is intended with the highest of value, I can tell you that much. So please keep it up and send me your thoughts.

Thank you again for everything and good trading,
Steve