TraderInterviews.com: Hello, everybody. Welcome back to traderinterviews.com. Thanks for joining me for another show this week. As usual, the idea of every one of these interviews is to give you something to think about in your own trading and maybe some strategies to try and some ways to look at the market you may not have considered in the past by talking to other traders and see how they do it. Today, we’re going to be speaking with Derek, and he’s going to talk to us about how he approaches the market. So, Derek, thanks very much for joining me on the phone today.
Derek: My pleasure.
TraderInterviews.com: Do you trade the spot market or you trade futures and options, that sort of thing as well?
Derek: Spot market only. As far as approach, I think that I take relatively a simplistic approach, and I don’t really lump myself into one category. I think by education and background, I’m kind of a fundamental trader. When you say fundamentals and currencies, they don’t really jive, but I do take a somewhat fundamental approach to the currency market. However, if you’re going to lump a style which I refuse to be boxed into one particular style, I would be a position trader or swing trader by desire but the market doesn’t really dictate that all the time. So, I’m an intraday trader by need, and then I’m going to convert when the trades work out in my favor, and I can manage them properly. Then I’m seeking the opportunity to convert an intraday trade into position trade where warranted, so it’s the multi-approach that I think is by far for me the most successful aspect of my nature, and then not forcing myself into say, “I am this.” A lot of people don’t want to say they’re intraday traders. It’s a bad word, and I happen to applaud it and embrace it, and know that I want to be a chameleon and adjust myself and my behavior based on how the market is dictating what we do and so we get a roll of the punches, and I do that.
TraderInterviews.com: So let’s start with the fundamental, and then we’ll get into some of the technical things. What outside of currency markets or within the currency markets do you watch everyday that kind of gives you an idea where things are heading?
Derek: Well, in the currency market, the focus is obviously on the economic news. I say fundamentally, and so now I get a chance to answer this. Unlike a company when you’re looking at a corporate starting in the news reports, we don’t have that out of a country, but we do have their economic news to deal with. I treat that economic news as my fundamental way to look at that economy or the currency itself. There are some of the reports I favor more than others. Non-farm payroll is the most substantial news event in the currency arena. A lot of people are afraid to trade it. It’s probably because they don’t have the right tools or strategies. But then the purchasing managers reports and the CPIs, and some of those things, housing, sales, and new homes construction. Those things are all real, good lead indicators to business and economies and so I treat that from a fundamental standpoint. I think that’s how it should be traded.
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