Fundamental Analysis
- Thread starter mr_byte31
- Start date
Day trading is exhaustive to me.
I am doing some swing trading and it didn't work good because fundamentals sometimes are against my trades !
If your swings are not working well, I would suspect your technical analysis may be more relevant than your fundamental. Identify weaknesses before you go chasing the wrong rabbit.
Problem with fundamentsl analysis, it is a very time consuming route to explore stocks.
When you create an algo, this short cuts the process.
With fundamentals, this is not quite do easy to shortcut if you go digging too deep.
If you are trading or investing in stocks, it pays to wean the universe down so that ultimately when you buy/sell, its from a smaller pool.
A large percentage of my time in stock selection is via an algo or technicals.
If I come upon a new unfamiliar stock, I will quickly check;
What they do
Directors (if they look like a bunch of rag tag bankers and accountants, forget it)
PE Ratio
Ratio of revenue to profit
Top 20 shareholders
Recent news events/announcements
When you create an algo, this short cuts the process.
With fundamentals, this is not quite do easy to shortcut if you go digging too deep.
If you are trading or investing in stocks, it pays to wean the universe down so that ultimately when you buy/sell, its from a smaller pool.
A large percentage of my time in stock selection is via an algo or technicals.
If I come upon a new unfamiliar stock, I will quickly check;
What they do
Directors (if they look like a bunch of rag tag bankers and accountants, forget it)
PE Ratio
Ratio of revenue to profit
Top 20 shareholders
Recent news events/announcements
Most short term swings moves worth being involved in happen when there is a earnings surprise.
Which means you need to be in before the surprise. Either by guessing right or technicals possibly giving a hint. Not by reading funnymental books.
When earnings are in line the reaction is usually mild if not bearish.
Then there are also times when technicals give a clue to a bull move without any new funnymentals to consider.
All in all for the small investor/trader technicals are the way to go. Unless you have 1/100% the amount that Buffett has or you are strictly a buy and hodler.
Which means you need to be in before the surprise. Either by guessing right or technicals possibly giving a hint. Not by reading funnymental books.
When earnings are in line the reaction is usually mild if not bearish.
Then there are also times when technicals give a clue to a bull move without any new funnymentals to consider.
All in all for the small investor/trader technicals are the way to go. Unless you have 1/100% the amount that Buffett has or you are strictly a buy and hodler.
I was a bit naïve. 
I thought if I know the revenue, EPS or even PE trend, I might have an edge.
So, I downloaded about 5000 Income Statement and Balance Sheet and look for the trend. BUT the stock price trend is more of speculation and expectation.
If I found a stock with good trend, and I scan at its fundamental too, before I plunge in.
I thought if I know the revenue, EPS or even PE trend, I might have an edge.
So, I downloaded about 5000 Income Statement and Balance Sheet and look for the trend. BUT the stock price trend is more of speculation and expectation.
If I found a stock with good trend, and I scan at its fundamental too, before I plunge in.
I figured that a gazillion traders' mental capacity must be better than my one brain.
Therefore I speculated in my head, if you were to build an algo which looked for longer term characteristics which suited a trading/investing style, this would be a good shortcut head start.
If you preferred for example volatile trading stocks, then build an algo which hunts these down types.
Lastly, when you scan and find these contenders, do a quick fundamental search to back up your quest if you so wished, but basically, the theory is, past and present price action is an indication of what the crowd believes. I'm not in favour though of believing just the short term trend behaviour as this often times is deceptive due to market rigging, imo.
Therefore I speculated in my head, if you were to build an algo which looked for longer term characteristics which suited a trading/investing style, this would be a good shortcut head start.
If you preferred for example volatile trading stocks, then build an algo which hunts these down types.
Lastly, when you scan and find these contenders, do a quick fundamental search to back up your quest if you so wished, but basically, the theory is, past and present price action is an indication of what the crowd believes. I'm not in favour though of believing just the short term trend behaviour as this often times is deceptive due to market rigging, imo.
Good observation focusing on earnings dates.
Fundamental earnings newsflow can be blended with TA by setting a buy and/or sell order after the close on earnings release date using the high/low of the day as triggers, using the low/high or close of the day before earnings as a stop.
Most price movement after earnings releases follows the current intermediate term trend, so if price before earnings is above the 50EMA, it will more probably go higher after the release than go lower, and vice versa.
Going for the dramatic earnings release day price action itself with an entry before the news is out is close to gambling and abandons the TA possibilities for stop placement.