Mixing TA with FA ? or not ?

[Stoxtrader]

Quote from jacksmith:

In your trading strategies, do you think if it is good to mix TA (Technical Analysis) with FA (Fundamental Analysis) ? or these two shall not be mixed ?

I think one assumption of TA is that all fundamental information has been included in price.

- Yes it is OK to mix TA and FA. As long as you're cognizant of which indicators are lagging and which indicators are more predictive.

- As an example of when fundamental info is not included in the price, Zacks believes that raised EPS estimates for next calendar year aren't factored into price for 1-4 weeks or more. Again it pays to realize that some indicators are lagging and some are more predictive.

- Some indicators I typically take into account are:

sales growth 1yr
pct below 52wk high
on balance volume
peg ratio next yr
price chg 52 wks
rating chg last 4wks
forward pe
price cashflow
chg in next yr est
proj long term eps growth
avg surprise last 4qtrs
moneyflow index
williams pct r

- A detailed listing of some indicators to consider, including statistical analysis, is in the paper:

A Non-Random Walk Down Canary Wharf
Emanuele Canegrati
August 2008
http://mpra.ub.uni-muenchen.de/9871/1/MPRA_paper_9871.pdf

 

[jacksmith]

Quote from Stoxtrader:

- Yes it is OK to mix TA and FA. As long as you're cognizant of which indicators are lagging and which indicators are more predictive.

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which are some predictive indicators ?

Thanks.

 

[good one]

Don't waste your time with FA. Markets have increased in tempo too much while companies still report quarterly.
Entire teams at institutions with superiour information do a pretty poor job at this kind of analysis.
Your a fool if you think you can do anything alone with inferior information.

All FA will do is screw up how your looking at the chart because of bias.

 

[Stoxtrader]

Quote from jacksmith:

which are some predictive indicators?

I hate to disappoint but, other than Zacks' idea mentioned above, that kind of information isn't free. It took me 4+ years of backtesting and forward walking different systems to figure out. And still I'm probably only about halfway there to developing a tradeable system. I will say however that I currently use MiniTab for multivariate statistical analysis. If you or someone you know knows MatLab, R, or SPSS, one of those could probably be used as well.