What's an opportunity trader? An opportunity trader is a trader that looks at the market to determine when there is a distortion; the market is run by humans and the consequence is that it is not perfect; it is really often subject to distortions and those distortions represent the right opportunity for a trader to make some money betting on the event that the market will cross its equilibrium;
The recognized method used to analyse the markets are technical and fundamental analysis, the problem is that they both are used to try to predict future price movements...while they should be used only to analyse what happened.
Fundamental analysis is the study of the macroeconomics indicator to explain what happened in the market and to try to see in which direction the market may move.
Technical analysts says that it is impossible to properly understand the market movement from the fundamentals of that market, first because it is impossible to know everything and second because of the gap of time from when the news is made to the time the news reach most of us. So what technical analysts do is considering the price as the unique fundamental of the market.
Since the price discounts everything they try to explain what happened while looking at the price movements and from that they also try to predict the future price movements of a market.
Have you seen what happened two weeks ago on the EUR/USD rate? Briefly after some not really good news for the Euro and the news that the European central bank was going to inject 60 billion liquidity, the Euro rallied...is that what fundamental traders were expecting? Look at March 16th; there was the same announcement from the FED...what happened? The USD lost 400 pips vs the EURO; should the Euro have done the same on May 7th? Yes but it rallied for 200 and more pips...it is like 600 pips not clear from the perspective of the fundamental analysis; and what about May 14-15? Technical traders were betting on a euro rally vs the dollar, but some fundamental news determined the opposite...a big bearish movement.
What really happened is that two weeks ago on May 7th a market distortion happened and that could have been spotted with technical instrument and with fundamental analysis instrument and so there was an opportunity to make some money trying to determine with the help of fundamental and technical analysis when the market distortion may be adjusted. That was a good opportunity to make good profit.
Fundamental analysis is the study of the macroeconomics indicator to explain what happened in the market and to try to see in which direction the market may move.
Technical analysts says that it is impossible to properly understand the market movement from the fundamentals of that market, first because it is impossible to know everything and second because of the gap of time from when the news is made to the time the news reach most of us. So what technical analysts do is considering the price as the unique fundamental of the market.
Since the price discounts everything they try to explain what happened while looking at the price movements and from that they also try to predict the future price movements of a market.
Have you seen what happened two weeks ago on the EUR/USD rate? Briefly after some not really good news for the Euro and the news that the European central bank was going to inject 60 billion liquidity, the Euro rallied...is that what fundamental traders were expecting? Look at March 16th; there was the same announcement from the FED...what happened? The USD lost 400 pips vs the EURO; should the Euro have done the same on May 7th? Yes but it rallied for 200 and more pips...it is like 600 pips not clear from the perspective of the fundamental analysis; and what about May 14-15? Technical traders were betting on a euro rally vs the dollar, but some fundamental news determined the opposite...a big bearish movement.
What really happened is that two weeks ago on May 7th a market distortion happened and that could have been spotted with technical instrument and with fundamental analysis instrument and so there was an opportunity to make some money trying to determine with the help of fundamental and technical analysis when the market distortion may be adjusted. That was a good opportunity to make good profit.
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