Following one of the comments on the blog about the need to isolate the economic environment and adhere strictly to the system or method of trading, it seemed appropriate to open this debate that no doubt will not be absent from controversy. The famous phrase ” trade what you see not what you feel , ” which could be translated as: operate what we see and not what marks us our feelings, but we can interpret in different ways and ask: What would be the scope of ” what you fee l “? Is it strictly limited to our mood, emotions, dreams or goes beyond and includes any external influence that may vary one iota our system? In the last post
It advocated a knowledge of those objective aspects of the forex market and available to everyone, that influence the movements and how they could help in the design of our strategies speculation. Although this knowledge should not determine our operations or change our trading system, it could be helpful in adjusting risk control more or less aggressive strategies at all times.
In support of this thesis I found an article by Dr. Brett Steenbarger, which outlines those areas where new traders should focus their efforts, referring to the knowledge of aspects of macroeconomics, which in summary outlined below:
“…
1) Macroeconomics – knowledge of the relationship between markets and how economic policy affects interest rates, currencies and economic growth. In order to get an overview of market trends and a possible scenario in a superior temporal scale at which we operate.
2) Method or trading system – the operator needs a model or framework to observe and predict the change in prices that make sense to the movements that occur in the markets. Whatever system we adopt (trends, moving averages, Elliot …), this will serve to support our interpretation through different time frames.
3) Observation- it is crucial that the operator spend a long time watching the markets, analyzing charts and looking for the best trading opportunities. Eventually, you will begin to find patterns of behavior that are repeated and will be profitable. This is therefore learn to recognize the dynamics of cracks, twists and trends, as well as the price action, looking at the volume, sectoral performance, the relationship between markets or other indicators that we consider useful.
…. ”
Each will have its particular system and vision of markets and the fact of incorporating more information to the decision-making operation can distort it, causing a series of contradictions and altering the base. However, contemplate this type of information to enhance the signals provides our system or prevenirmos high risks we are taking, it can be useful to our trading plan.
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