This article is taken from the Forex Journal (March 2008 issue).
The author, Louis B. Mendelsohn is President and Chief Executive Officer of Market Technologies. Mr. Mendelsohn began trading equities in the early 1970s, followed by stock options.
Louis B. Mendelsohn is President and Chief Executive Officer of Market Technologies:
Most traders stress the role of fundamental information and historical single-market price data in analyzing markets for the purpose of price and trend forecasting. Traders do need to look back at past price action to put current price action in perspective, but they also need to look forward to anticipate what will happen to prices if their analysis is to pay off in the real trading world.
To be able to look ahead with confidence, however, traders need to look in one other direction, and that is sideways to what is happening in related markets, which has a major influence on price action in a target market. What are the external market forces that affect the internal market dynamics – the intermarket context or environment in which the market you are trading exists?