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Knowing all the fundamentals will not necessarily help you. Being able to
interpret how a market is interpreting fundamental news will give you insight
into the current scenario that the market is trading of off.
For example: Important bearish news comes out for the bonds, but the bonds
don't break. In that case, the longer the market holds and does not react
negatively to the bearish news, the more likely it is to rally. Now, that may
only last a day or a couple of days, but it will give you a pretty strong
signal from time to time. The truth may turn out to be that there is some
other piece of news, which is not widely disseminated yet, that was more
important. Sometimes you might not find out for months what that news was.
But, as long as you keep interpreting the market's take on the news that is
available, you will develop a feel for the market and for the strength of the
current scenario. Getting that feel is why many traders will tell you trading
is an art, not a science.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
In a message dated 12/3/98 1:12:46 PM Central Standard Time,
brente@xxxxxxxxxxxx writes:
<< Pete, although I agree with the sprit of your statement that it is
important
to understand fundamentals, I don't believe that anyone understands
fundamentals completely. For example you virtually have to be all knowing to
know that Sadam ate something that gave him indigestion and kicks out some
UN guys or something. I followed a Copper backwardation for a while and it
was just market manipulation as near as I could tell. Surprise, there was
more Copper in some warehouse that they didn't count. You can't hardly
believe a word of the news. So what else is new.
Brent
>>
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