Is Fundamental Analysis Somewhat Useless?

[wrbtrader]

I'm only interested in fundamentals via the date & time of their release. I want to see if its already been priced into the market or if it has not. If it has not, I'll be watching the price action closely to see if the price action reacts to the fundamentals info. Then if price reacts to it...I wait for a trade opportunity to appear. If a trade opportunity does not appear...no trade.

This is not rocket science.

 

[Opulence]

Quote from wrbtrader:

I don't get it. First you're wondering if fundamentals has merits and then you say it helps you trade Corn and Wheat. Yet, you're having problems with Cocoa and Sugar. Thus, it seems like you're blaming fundamentals in error based on the fact you don't have access to fundamentals involving Cocoa and Sugar while you have access to fundamentals for Corn and Wheat. :eek:

Seems to me the real issue is that you're having problems getting access to fundamental information in a timely manner that would help you trade Cocoa and Sugar.

Forum question - What's up with these types of threads lately in 2012. I see traders wondering if something is useful or useless but they state themselves that it helps with their trading. Folks, it's simple, if it works for you...keeping using it and stop worrying about what others think. If it doesn't work for you, get over it and move on to something else or find another occupation (career).

I don't know if this is an attempt at trolling or what. But I remember saying that my issue with Fundamentals is that the timing is usually off when that information is released to the public. I'm not "blaming" anyone, I'm saying what I said in my original post. And yes, I said I used the weather factor this summer to make a play on corn and wheat...information that was easily available BEFORE HAND. Even with USDA reports concerning corn and wheat, those are usually priced in before they're released. If you were better at comprehending, you'd see that my whole point in asking this was to see whether or not fundamentals were useless on the grounds that by the time we receive the information, its usually already priced in.

 

[BSAM]

It's all in the chart, brothers.
All in the chart.

 

[wrbtrader]

Quote from Opulence:

...If you were better at comprehending, you'd see that my whole point in asking this was to see whether or not fundamentals were useless on the grounds that by the time we receive the information, its usually already priced in.

It's simple via your own statements. You're able to find it useful when you have access to the info via Corn and Wheat. Yet, when you don't have access (e.g. Cocoa and Sugar)...the real-issue is no longer if its useful or not...

The issue becomes an access concern. That I comprehended very well.

Quote from Opulence:

...information that was easily available BEFORE HAND. Even with USDA reports concerning corn and wheat, those are usually priced in before they're released....

By the way, your above quote did not state such in the prior quote as shown below. Had you stated the above in your prior quote instead of pretending such was stated via capitalizing the words BEFORE HAND about the availability of the fundamental information....I would have never responded. Thus, with the above info you've added, it does change the context of the below quote that I was responding too.

Thanks for the late clarification (better late than never) and there's no longer a need for me to continuing to reply now that I know exactly what you had meant to say.

Quote from Opulence:

I made a few plays over the summer based on fundamentals. It was hot as hell this summer in the Midwest, so it was obvious that corn and wheat prices would rise, so I made those plays. Commodities that are mainly produced in America are easy to get fundamental data for. Its things like Cocoa and Sugar that I have trouble with.

 

[oldtime]

Quote from BSAM:

It's all in the chart, brothers.
All in the chart.

in a sense that is true. When I first started trading forex, I would see these big long candles at night. I found out later they were usually about a rate decision by the CB. But it really doesn't matter if I know it or not or even when it is going to be announced. All I really have to do is look at it and say "Somebody announced something." As long as I know before hand how I am going to react to anything.

On the otherhand, something big like qe3 is probably a fundamental you should at least be aware of and listen to the opinions (whether you agree or disagree) on the implications.

it helps to always be spread

 

[Scataphagos]

Quote from Opulence:

"... What do you all think?

"Fundamentals"... the rationale for holding a position which has gone too far against you... and you don't even know whether your fundie assessment is correct.

 

[deucy28]

Quote from oldtime:

well deucy28, I just answer what works for me. That way when the whole thread is complete you get a variety of opinions.

You said: "I just answer what works for me," in response to me stating what works for you is exactly opposite what works for me. Importantly, we were targeting how fundamentals don't impact you short term, but rather longer term. For me, short term dramatically affects my positions while over time, the earlier fundamentals issues when they were impactful then, tend to dampen out. Why this big cross in different directions from each other ? Answer: we trade different securities and we trade different styles (as I trade very differently from most others even within the pair trading world I am in).

 

[oldtime]

Quote from deucy28:

You said: "I just answer what works for me," in response to me stating what works for you is exactly opposite what works for me. Importantly, we were targeting how fundamentals don't impact you short term, but rather longer term. For me, short term dramatically affects my positions while over time, the earlier fundamentals issues when they were impactful then, tend to dampen out. Why this big cross in different directions from each other ? Answer: we trade different securities and we trade different styles (as I trade very differently from most others even within the pair trading world I am in).

right, I got ya. Yes that is exactly right as it appllies to me. Fundamentals affect me longterm and I usually have many days or weeks to adjust. Usually the way it works is, I have something on and the new fundamentals don't justify it. So I just keep that in mind and look for a good place to get out. Although my spreads supposedly start out neutral, over time they reveal a bias, and it is not uncommon to make money on the side I originally considered fundamentally wrong.

 

[deucy28]

Quote from oldtime:

But if you watch cnbc, you would think the fundamentals are violently changing everyday. One day the market is up because Europe is good. Next day the market is down because China is slowing. It can't all happen that fast can it?

LOL LOL

Exactly !

That is why the fundamentals impact my position early in the trade. Over time, time mitigates the bad, and the good gets dimmed in memory. There is a tendency over time for these things to dampen out (to varying degrees, certainly) which is all the more important when a TRADE for me includes pairing up two legs....one long, one short. I have double the fun when fundamentals affect their stock plots early on in a position.

 

[deucy28]

Quote from oldtime:

Although my spreads supposedly start out neutral, over time they reveal a bias, and it is not uncommon to make money on the side I originally considered fundamentally wrong.

Got it !