Chart versus fundamental trading

L

luckyone581

This is certainly a hot topic at any time and one that brings strong opinions on both sides.

I am a chart trader and rarely look at fundamentals as I believe the big traders (hedge and mutual funds, big money, etc.) will always have more and better fundamental information than I, as a small trader will ever have. As such, by reading charts I am "following" what the big money is doing, or likely to do, rather than trying to analyze the stock myself.

In addition, being a chart trader I never get married to an evaluation as my ego is not involved. This prevents me from ever taking a big loss on any trade by staying with the stock through bad times because of my fundamental beliefs the stock will "ultimately" do what I think it is going to do.

I would like to debate this issue here and see how many people are traders and how many are fundamentalists, and why.
 
The only real problem is that many chartist do get married to their "trades" or direction opinions about the price action. I've seen often (I mean very often) losing traders get the direction incorrect while only using chart analysis and then stay in a losing trade, average down/up, change stops, trade without a plan, trade without discipline, trade without being properly capitalized et cetera.

I've seen chartist take big losses too just like someone that uses only fundamentals. In fact, take a look at many of the journals, index futures et cetera here at Elitetrader.com

They are full of traders that trade using chart analysis only and their posted trade results are mainly losses.

My point is that it has nothing to do if you're a chartist or using fundamentals...anybody can get married to a trade or develop an ego regardless to what title they call themselves.

By the way, I use charts and I'm not sure why you want to imply chartist as a majority are different although you were talking about yourself.

As for debating this issue...it's been done hundreds of times with the same conclusions. Use whatever works and keep using it until it stops working. :cool:

Quote from luckyone581:

This is certainly a hot topic at any time and one that brings strong opinions on both sides.

I am a chart trader and rarely look at fundamentals as I believe the big traders (hedge and mutual funds, big money, etc.) will always have more and better fundamental information than I, as a small trader will ever have. As such, by reading charts I am "following" what the big money is doing, or likely to do, rather than trying to analyze the stock myself.

In addition, being a chart trader I never get married to an evaluation as my ego is not involved. This prevents me from ever taking a big loss on any trade by staying with the stock through bad times because of my fundamental beliefs the stock will "ultimately" do what I think it is going to do.

I would like to debate this issue here and see how many people are traders and how many are fundamentalists, and why.
More...
 
Quote from luckyone581:

This is certainly a hot topic at any time and one that brings strong opinions on both sides.

I am a chart trader and rarely look at fundamentals as I believe the big traders (hedge and mutual funds, big money, etc.) will always have more and better fundamental information than I, as a small trader will ever have. As such, by reading charts I am "following" what the big money is doing, or likely to do, rather than trying to analyze the stock myself.

In addition, being a chart trader I never get married to an evaluation as my ego is not involved. This prevents me from ever taking a big loss on any trade by staying with the stock through bad times because of my fundamental beliefs the stock will "ultimately" do what I think it is going to do.

I would like to debate this issue here and see how many people are traders and how many are fundamentalists, and why.
More...



You don't need confirmation from these idiots here. You're right and thoroughly right. There is nothing to discuss.
 
Quote from luckyone581:

This is certainly a hot topic at any time and one that brings strong opinions on both sides.

I am a chart trader and rarely look at fundamentals as I believe the big traders (hedge and mutual funds, big money, etc.) will always have more and better fundamental information than I, as a small trader will ever have. As such, by reading charts I am "following" what the big money is doing, or likely to do, rather than trying to analyze the stock myself.

In addition, being a chart trader I never get married to an evaluation as my ego is not involved. This prevents me from ever taking a big loss on any trade by staying with the stock through bad times because of my fundamental beliefs the stock will "ultimately" do what I think it is going to do.

I would like to debate this issue here and see how many people are traders and how many are fundamentalists, and why.
More...
cant be both?
 
I refer more to chart analysts that use support/resistance levels to trade.

A chartist that uses support/resistance levels, knows his stuff, pinpoints his entry and exit points, and is faithful about following the guidelines of support/resistance, should never take a big loss.

So it is more about defining the good chartist from the bad chartist.

As far as using both fundamental and chart analysis, "yes" both can be used to a degree, but you need to determine before you get into the trade which one takes priority because if you don't, you will be wishy washy about the decisions.

I have seen many a time a stock will go against the fundamentals if for no other reason than momentum, big traders manipulating a stock for a short time, or simply because a stock is overbought/oversold.

Nonetheless, knowing the fundamentals will help you to decide whether you want to play "most" of the trades in the stock from the long or short side.

For example, in AMZN most of my trades have been on the short side because I simply don't believe the company is worth the price it is trading at. By the same token, due to the strong uptrend, I have to pick my spots to short very carefully.
 
You must log in or register to reply here.
Back
Top