How Fundamentals and Technical Analysis Work Together in Trading

Goal of This Lesson:

To teach you how to combine fundamentals and technical analysis properly — using fundamentals for directional bias and technicals for actual entries and exits — even when they sometimes conflict.

The market moves because of orders and liquidity, not simply because of headlines. Fundamentals provide context; technicals reveal the path institutions are taking right now.

By the End of This Lesson, You Should Be Able To:

• Understand why technicals and fundamentals sometimes "disagree"
• Learn how to prioritize real price action without discarding fundamentals
• Follow a clear, actionable process to trade when signals conflict
• Manage expectations and adapt to dynamic, non-perfect market conditions

Real-Life Analogy: Weather vs Surf

Imagine you’re planning a beach trip:

• The forecast (fundamentals) says “sunny” — but when you get there, waves (technicals) are stormy and chaotic.
• You don’t just surf blindly because the weather report said it’s nice.
• You observe the actual sea conditions before deciding: "Should I surf now, or wait?"

Same thing in trading: Fundamentals forecast big trends, but price action is your real-time decision tool.

Fundamentals: The Macro Story

Fundamentals provide the wind direction:

• Is it a risk-on or risk-off environment?
• Are central banks raising or lowering rates?
• Is inflation accelerating or cooling?

This forms your baseline bias.

Technical Analysis: The Real-Time Analysis

Technical analysis shows the waves in motion:

• Is the market sweeping liquidity?
• Are there clean Fair Value Gaps?
• Is there displacement and structure breaks?

Execution always follows structure, not just stories.

📊 Weight of Technicals vs Fundamentals in Trading

Why 70% Technical / 30% Fundamentals?

Technical Analysis (70%)

• Price reflects all known information before it hits the news.
• Institutions enter based on liquidity and structure, not just forecasts.
• References: 
  • Richard Wyckoff:

“Price reflects all market forces.”

• Paul Tudor Jones:

"At the end of the day, price tells you everything you need to know."

Fundamental Analysis (30%)

• Forms your macro view.
• Helps prioritize direction (but doesn't guarantee immediate moves).
• References: 
  • Stanley Druckenmiller:

“Built macro ideas but waited for technical confirmation before execution.”

• Paul Tudor Jones:

"Fundamentals are useful... for about 30 minutes. After that, price tells you everything."

How to Handle Conflicts Between Fundamentals and Technicals

Here's the actionable, no-guesswork process:

Bottom Line:

• If technicals don't align, you WAIT or play countertrend carefully with smaller size on a short term .
• Fundamentals can tell you "which side" to prefer, but technicals tell you when it's safe.

Example:

• CPI comes out weak → bearish USD fundamentals.
• But USD Index (DXY) is making higher highs and higher lows intraday.
• ✅ Solution: Wait for DXY to sweep a key high, show bearish structure break, then short.

(Not just blindly short because "CPI is bad.")

• If there’s an opportunity for an upside, you can trade it but with caution.

Simple Way to Remember It:

• Fundamentals = Weather report (big picture)
• Technicals = The actual surf and waves (real-time)

You need both, but you trust the water before jumping.

Final Takeaway:

• Fundamentals guide what direction to prioritize (macro story).
• Technicals guide where and when to enter or stay patient (price action confirmation).
• Always trust what price is doing now — not just what the news said.

Mastering both skills — but giving 70% execution weight to technicals and 30% to fundamentals — is how professional traders survive market conditions, adapt faster, and consistently capitalize on liquidity-driven moves.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.