Welcome to PawProfitForum.com - LARGEST ONLINE COMMUNITY FOR EARNING MONEY

[Oluti]

One of the first important points to keep in mind about fundamentals is that they are changing constantly. What you read in the Wall Street Journal or a magazine or a newsletter regarding market fundamentals can be outdated tomorrow or by next week.

Also remember that many of the numbers released in government or other reports and regarded as fundamentals are based on estimates. Even the most thorough government effort to get precise figures usually comes down to official estimates and educated guesses. Whether they are factually correct or not, they are the numbers that economists and traders have to deal with, and you will have to accept them for what they are even if you skeptical about their accuracy.

Not only do the numbers change constantly with each new report or update but market conditions also are always changing. A given number that may be bullish in one set of circumstances may draw a much different reaction in other circumstances. That is because the market may have gotten used to what was considered a bullish figure originally and now accepts the number as a “normal” figure or because the demand situation has changed for the same amount of supply.

Equally as important as the actual estimates are traders’ perception of them based on their expectations. Traders may expect to see a certain fundamental number in a report and set prices accordingly. For example, if traders expect a crop report to show a bullish number, they may bid up prices ahead of the report. Then by the time the report is released with that number, the bullishness may have been exhausted, and a report that might have been considered bullish gets a bearish price response instead. That’s the “buy the rumor, sell the fact” reaction discussed in the tutorial on basic trading concepts.

There are a couple of other points that should be made about fundamentals in general:

Demand is not the same as consumption. What is consumed is one thing; what is the demand for the available supply is quite another.
You may be exactly right about a fundamental but your timing may be off. For example, maybe you have the final corn production figure pegged exactly in August but the market isn’t in tune with that number. You may just be too early.
Any number of events can cause fundamental surprises overnight. Weather, natural disasters, political disruptions or many other events may change the whole complexion of a market, and you always need to take into account the possibility of such sudden shifts in the outlook.

Because of the nature of fundamentals and the difficulty in getting accurate information and then interpreting it correctly, many traders have turned to technical analysis addresses, the study of price action that incorporates all of the fundamental factors affecting prices. Price is the composite reflection of every news event and/or other fundamental known to all traders.

 

[lioralace]

Man, fundamentals in trading are a wild beast—never just black and white. You can read some hot-off-the-press report in the morning and by lunchtime, it’s already ancient history. That’s the nature of the game. What’s true now? Eh, maybe not so much in an hour.

The first thing people never tell you: these “official” numbers? They’re basically educated guesses half the time. Governments, agencies, whoever—they’re crunching numbers but working with samples, not some crystal clear, all-knowing dataset. It’s like watching a game through a foggy window, then betting on the next play. Even the heavyweights on Wall Street are out here hoping their info isn’t stale by the time they brew their afternoon coffee.

And here’s the kicker—markets themselves have the attention span of a goldfish on caffeine. A crop report drops? Maybe yesterday, that would’ve sent everyone buying like mad. Today? It gets a shrug or, worse, tanks the price because everyone’s moved on. Traders can be weirdly moody; what’s bullish one month is boring (or even seen as bad) the next.

Now, let’s talk about the weird Jedi mind tricks going on—perception runs half this show. You’d think if the data says “more wheat than expected,” it’s simple, prices drop. Nope. Sometimes, traders already packed that into the price days—weeks—before. So the much-hyped number hits, and the market goes: “Yeah, whatever, already factored that in.” Prices might even do the opposite of logic. “Buy the rumor, sell the fact” is not just a saying, it’s practically law on the trading floor.

A couple of tricky spots you gotta keep an eye on:

- Demand vs. Consumption: Don’t get caught mixing the two up. Demand’s all about what people WANT to buy; consumption is what actually gets used. Totally different vibes, right? You can have hype and no action. Or sneaky action no one saw coming.

- Timing is a heartbreaker: Nailed the data? Good for you. Too early or too late, though, and you might as well have guessed wrong. Markets don’t care about your perfect theory—they move on their schedule, not yours.

- Black swans crash the party: Storms, wars, pandemics—nobody sees ’em coming, but they can nuke the fundamentals in seconds. And you, my friend, won’t be the exception.

So what do a lotta savvy traders do? They hang out with the charts. Technical analysis = survival kit. Because price includes all that messy stuff—hopes, fears, herd instinct, and the latest headline shockers. Everything’s in there, getting churned into current price action, live.

Bottom line? Fundamentals matter, but don’t get obsessed with the numbers. Context is everything. Market moods swing hard, data changes, and the “truth” you see now is already getting old. Blend the fundamentals with your chart-reading skills, keep a loose grip, and roll with the madness. That’s how you stay in the game.

Seriously, don’t just trust the headline—read the room. The market never stays put for long.