and now for something completely different...

How do you select stocks to INVEST in?

  • I only use technical analysis

    Votes: 10 41.7%
  • I only use fundamental analysis

    Votes: 1 4.2%
  • I use a combination of tech and fundamental analysis

    Votes: 12 50.0%
  • It's all a load of tosh I have a magic pin

    Votes: 1 4.2%

  • Total voters
Have to admit, because I love numbers etc, I only ever look at charts coupled with market direction generally. However, feeling like I should be aware of fundamentals at least as a background, esp dates of results etc(looking at IQE this week!!!!!)

Hi Darth, Mark

I did cast my vote as you might have guessed for combination of TA and unfortunately I don't have anything of magic, ie. cat's tail, etc :)

Just pasting from an earlier post of mine at TA BB to give an idea of the sort of combination:

"I never get in or out solely on TA basis...I do however use TA as a tool to help with and recheck my judgements...I try to work out the markets in general, watch certain stocks continuously both on the basis of positive/negative news/developments and TA...

I use TA for support/resistance levels to determine my entry and exit points, to follow the volume to make use of it in various ways (not just looking for a volume spike), chart patterns (not in depth though)...

I use MAs, BBs and find them quite useful to see their interrelations with the price for indicators I use RSI, OBV, MFI and Stochastics...I never wait for all of them to give me a signal at the same time, and also never rely on a particular one...

I also follow market sentiment and momentum very closely and try and not contradict them and trade alongside....

Just one last point...most of my losses have occured when I traded stocks that I don't watch closely either on the basis of TA or news only...and almost all my wins are on those stocks that I watch closely in conjuction with the markets in general and with TA support...

One thing I've learnt is that no trading strategy works for everyone...each trader has to try and establish their own way...

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I voted for a combination of FA and TA. You ignore macro-economics at your peril. Know the market, sector and sentiment that you are looking to trade in, check economic factors and then use TA for confirmation of entry and exit.
Otherwise, watch yourself get stopped out needlessly on a day when you shouldn't be trading at all!

I agree......

I do try and get an overall feel of market direction, and optimism v. pessimism of various sectors. However, I have not really spent any time looking at fundamentals of a particular company. However, I am now trying to discipline myself with a brief look just to check that there are no major nasty surprises around the corner....

But I will not be spending too much time with gearing, balance sheets etc!

I would love to include TA and FA, but I have a problem. I just switch off the written word. I might scan a few lines of an article but my brain soon trips into neutral. I only have a vague idea about company activities. Maybe its a disadvantage, maybe an advantage.. I don't fall in love with the possibilities of these companies.
I do regularly monitor the Dow, Nas and FT100, with charts pinned on my wall with lines of resistance/support drawn. If we are near a resistance line, I hold off etc etc.

I compare this to soldiers in a war. Boredom , and then frantic action. When the market is near a turning point, get ready for action. If you miss the turn, wait until the next market extreme, don't chase half-way through a move.
I dont get time to look at fundamentals, but I do make sure there are no reporting activities (in the near future)for a stock I'm considering...
I always check both TA and fundamentals. When screening for TA candidates I use the AIQ pyramid to identify bullish sectors and then pick shares from those sectors using established TA principles. Then I check the likely suspects using CD REFS to check for cashflow/eps, growth rates, margin trends, gearing etc as per Jim Slaters criteria, although I don't just look for low PEGs. This has worked well enough for me for about 6 years now. and it successfully got me out of Tech Stocks in April 2000 and rotated into banks and tobacco.

I also use CD REFS to screen on fundamental data and then use TA to get the timing right (I hope)!
some interesting results and posts here.

No surprises that that nobody uses fundamentals exclusively (as this site is mainly ta based).

Roger's desciption is close to what my system is evolving into. The only difference is that I follow O'Neil rather than Slater (not much difference) and I have only a free subsrciption to cdrefs. I've been using sharescope and it is very respectable. Close inspection of the fundamental data suggests that it is updated on a quarterly basis.

I wondered if somebody might own up to having a magic pin...