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Trading with fundamentals

Do you really need fundamentals to make money?

The simple answer is, no. We do not use news and fundamental analysis for the strategies we trade, and I think that you shouldn’t too. Let me explain why.

News and fundamental data are unpredictable and rarely affect the market the way you expect it to. Following news and macroeconomic data can result in you having an illegitimate bias when you trade the markets. However, if you trade with a horizon longer than a month then it does make sense to fit your analyses with the overall macroeconomic trend.

At New Capital, we focus on technical analysis with a mechanical edge. This means that we execute trades based on a fixed set of rules regardless of what news or fundamentals might show. For example, if we analyze that the U.S Dollar is sitting in a supply zone, we will be looking for selling opportunities as per our mechanical trading plan. However, if the fundamental data is telling us that the U.S Dollar is strengthening then we are dealing with contradictory information.

If you are trading your own strategy or want to learn to trade with us, you will find that the edge is in technical analysis. Keep it that way!

Speak to you soon! Kind regards, Joost

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