FTSE Beater
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Hi Grey1
I have to disagree with the statement. A full-time fundamental trader is usually happy with 20% return a year, a full-time TA trader would be disappointed with that.
Just my thoughts
I have to disagree with the statement. A full-time fundamental trader is usually happy with 20% return a year, a full-time TA trader would be disappointed with that.
Just my thoughts
Scripophilist
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FTSE Beater, It all depends upon your perspective both fundamentals and trading are joined at the hip. They just have different turns, leverage, risk and margin.
I've spent several years looking to resolve the styles of traders and speculators alike and the answer was right in front of my nose all the time. IMHO it all comes down to style all can suceed with pretty much the same end result but it's more a question of how you do it.
I've spent several years looking to resolve the styles of traders and speculators alike and the answer was right in front of my nose all the time. IMHO it all comes down to style all can suceed with pretty much the same end result but it's more a question of how you do it.
Scripophilist
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For me I like the thrill of the chase on the trading side but all gains get put in a long term portfolio which has compounded away very happily for 14 years!
Scripophilist
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Always the debate is, it's in the price or not. Obvioulsy I think the solution is much more subtle than that.
I have consistantly made money for 14 years by ignoring charts. My view is that there is a certain amount of "Dumb" money in the market that is buying or selling without any view on the underlying value of the asset. I exploit that and it works.
I have no personal issue with trading and if you can make money at it (which I believe you can, with certain levels of risk). Actually I encourage it as it adds liquidity to the market and moves out some of the risk of an illquid market.
I have consistantly made money for 14 years by ignoring charts. My view is that there is a certain amount of "Dumb" money in the market that is buying or selling without any view on the underlying value of the asset. I exploit that and it works.
I have no personal issue with trading and if you can make money at it (which I believe you can, with certain levels of risk). Actually I encourage it as it adds liquidity to the market and moves out some of the risk of an illquid market.
ajaskey
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Grey1 said:
That depends on what you want to do. If you want to find the best companies and project which will be the best in five years, then fundamentals trump TA. The difficulty of investing using the fundamentals is that very few know what the true/current fundamentals are. You can read a piece of paper that tells you what the numbers were last year or last quarter, but most don't have a clue about the real time fundamentals - the fundamentals that matter when you place your bet.
Investing/trading in the intermediate term using both fundamentals and TA is a good method of outperforming almost everyone else in the market. Will some who use only TA outperform you - yes. Will everyone who use only TA outperform you - no. The important question to ask is can you outperform yourself using only TA versus using a combination of FA and TA in the intermediate term.
Professional money managers have a budget of at least several million dollars a year to determine the real time fundamentals. If you have money to afford that kind of research you should stop playing with stocks because you are already rich...
A good trader is both an economist and a technical analysist. I think your success will be limited if you only learn one and not consider the other. Fundamental traders tend to be long term traders, as an example a currency trader they will study inflation data trying to assess whether an economy is over heating then ask where are interests rates, would it make economic sense to raise rates in that currency, if rates are likely to raise you may start scaling into the market if you believe the price of that currency hasn't factored a rate rise, then maybe 6 months later rates start to rise and your assessment appears correct. This is a very long term view.
A good trader that uses both skills will probably say, the market has been very bullish dollar for quite a few months, are the economic factors that lead to this gain still in play/likely to continue? they will then study the chart and and use analysis to pin point the price at which dollar looks a little over sold and get in before the buying pressure emerges again.
The longer the time frame (weekly/yearly) the more the market is controlled by fundamentals. The shorter the time frame (15 min/ hourly) the more technical analysis dictates trading.
Tom
A good trader that uses both skills will probably say, the market has been very bullish dollar for quite a few months, are the economic factors that lead to this gain still in play/likely to continue? they will then study the chart and and use analysis to pin point the price at which dollar looks a little over sold and get in before the buying pressure emerges again.
The longer the time frame (weekly/yearly) the more the market is controlled by fundamentals. The shorter the time frame (15 min/ hourly) the more technical analysis dictates trading.
Tom
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