The battle between technical and fundamental analysis has been going on for years with no clear winner. For my trading I use both simply because the more information the better, failing to prepare is preparing to fail.
How I use fundamentals is a little more complex. I have developed an index system similar to the USD index for all the major currencies and use news releases to estimate the move in the market and compare it to the actual move and trade around the miss pricing.
For example let's say American CPI (inflation) came out lower by 1% this may imply a 100pip move in the market for the dollar. Also Japanese Trade balance improved by 1% this implies a 100pip move in the market for the yen. Therefore we should see the USD/JPY decline by 200pips. However, let's say the market only declined 100pips, we can assume that the market has miss priced the USD/JPY by 100pips.
Trading around this is simple though. In the case above we would expect a 100pip decline over the course of the next week and look for signs of a reversal to buy or look to get ahead of the decline and go short. I'll post the Index data every week so you can better understand my trades.
As for the actual demo account, I will be using excel to track account information using the actual position statements from fxcm. Those will be posted here as well. The reason for the this is because fxcm doesn't offer a $1000 demo account and I don't actually have $1000 to throw at one of these ventures.
Rules:
1. All Trades will be posted here with explanations.
2. $50 will be added to the "account" at the start of every month.
3. All results will be posted here as well as my performance results every month, quarter and year.
Thank you for reading and don't forget to follow this blog, my other blog and comment below.
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