The problem with economic and fundies is that it is very hard to get at the truth..
Enron :- the fundamentals
Economics:-Re-stating of previously released data.. e.g. constant revisions upwards or downwards of data.
The chart is instant and cannot lie... footprints can be spotted. Insider dealing can be seen.. e.g., movement of MKS and ANL prior to takeover bid announcement.
Yes, you are right re the charts, should not really have made that comment.. MMs love to mess about!
And I know from trading on L2 how easy it is to give the wrong impression on the book.
I look at a lot of fundamentals/economics and look at the revisions.
I try to play the crowd and look at the overall picture in the background and see if the crowd will be right in the long term or not.. and then hopefully be able to spot the reversal.
Enron, I do not know all the details of course as I never traded them, but from the information I have it seems that a lot of information got so diluted and hard to find that you could draw the wrong conclusions.
Fundamentals are perhaps economic predictions based on known facts and unknown, though estimable, future developments.
The market is made up of people who further complicate things with their opinions and, often, irrational emotions.
The market often disagrees with sound fundamental analysis for prolonged periods. It is often no use being proved right in three months when you aim to make money in one but the market (wrongly) disagrees with your clever deductions for two.
The market's historical interpretation of the fundamentals is in the charts. The present interpretation is in the current price. (Price is king!)
Though the interpretation may be wildly wrong, it is the one you must follow if you wish to avoid being trampled by the herd. Price action will indicate when a falsehood is becoming widely known to be wrong or when sentiment is changing for another reason. We cannot predict the future so we must look at what is happening to the price now, with a glance at what has happened, for reference, and act accordingly. Charts provide the easiest way for most to do this.
Fundamental analysis unecessarily distances the trader from the action IMHO. It is a "layer" of knowledge removed from what participants are actually doing with their cash.
Edit: However I agree that being on the right side of a longer term fundamental truth then fine tuning with TA is a sound approach.
When you trade you're looking for the price to move in your direction. If you get the fundamental analysis right it will probably move in your direction eventually. If you get the supply and demand analysis right (via the charts) it will probably move in your direction immediately.
The difference twixt investing and trading?
'course in either event you have got to get it right
I watch the screen and watch the scalpers at work.... for a few points here and there
But I can leave the screen and the stress of trying to grab a few pennies here and there.
I can get 10s of pennies with one commission in and out