I don’t think you understand what fundamental analysis actually is. Estimates of future cash flows, the discount rate, and long term growth, are constantly changing.
TA question often asked... "Do trendlines work"?
- Thread starter Scataphagos
- Start date
Another great Thread. Keep up the great work please @Scataphagos
Buy Support, sell Resistance.
Look for Trendlines and Channels.
Trade with Stops
Chase Breakouts in very strong Trends that aren't likely to Pullback for awhile.
Etc etc.
So you’d rather guess what’s going on with the stock price instead? I’ve not seen a “technical analyst” with a hit rate above 50%, which means they underperform random guesses. Why would you believe in a system that underperforms like that?
Anyway that’s fine. Personally, I’ve come realize that noise traders (non-informed) play a useful role by providing cheap liquidity.
Much respect and thanks for the work and effort you're contributed here @longandshort
But your highly educated with Institutional training which allows you to apply FA.
Some of these peeps wouldn't know what Fundamentals were, let alone be able to learn it and apply it.
It's like a Professional Fighter trying to communicate with a bunch Bar room Street Fighters. They haven't got the training or the opportunity to apply it. Much easier just to follow the trend.
But your highly educated with Institutional training which allows you to apply FA.
Some of these peeps wouldn't know what Fundamentals were, let alone be able to learn it and apply it.
It's like a Professional Fighter trying to communicate with a bunch Bar room Street Fighters. They haven't got the training or the opportunity to apply it. Much easier just to follow the trend.
If you combine the system with risk management it doesn't under perform.
By cutting losses and letting the winners run you don't need a better than 50% win rate.
I rarely have over 50%, but my R/R makes up for lots of small losses. Draw downs are minimal.
The goal at the end of the day is to increase your capital.
errrr, I was trading when you were still at school, back 20-30 years ago my trading was on fundamentals more than technicals.
But anyway, ASX has just opened and we are down.
but guess what....?
I'm up on a down day just using technicals long only stocks, it's not a great deal but better than a kick in the ass.
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If technicals add negative value (by subtracting from a random 50/50), why use them at all?
I hear what you’re saying but practice does not make perfect. Perfect practice makes perfect.
If your hit rate is not above 50% why are you advocating for a style that does worse than a coin flip?