Two Types of Traders

[AlphaOne]

This is how I see the two ways to trade... does anyone agree? Disagree? why?

The Fundamental trader holds to the theory that the Forex market is subject to random (unknowable) fluctuations which make predicting the short term trend impossible. The only way to predict direction is to evaluate the sum of the fundamental indications which drive currency prices over the medium and long term. If one observes enough of these fundamental indicators, one can begin to predict how it will affect the valuation of a particular currency, versus another, in a particular time frame.

The technical traders hold to the notion that the indicators are too numerous and insidious to aide in any prediction: That those fundamental indicators are priced into the markets long before they are made public. The indicators to the indicators are really what drives the market… and those are too complex to be known. The only way to begin to predict this level of complexity: is to observe the data and look for trends, correlations and relationships.

 

[Pharaoh]

That pretty much sums up the 2 major trading styles and belief systems.

I personally mostly trade technicals, but fully acknowledge that not all fundamentals can be priced in all the time. Like all technical traders, I've had beautiful chart patterns wrecked by a big deviation in a news announcement. I'm sure there are news traders who have been disappointed that a deviation wasn't enough to crack the market away from an existing trend also.

Unfortunately, sometimes fundamentals trump technicals and sometimes technicals trump fundamentals. No matter what your preferences and style, you need to be aware that there are additional driving forces in the market that could make it move the wrong way from your "sure-fire no-lose trade."

 

[Nyust]

This is only one type of classification. You can further calssify all traders into full-time versus part-time traders., for example. Any other classifications?