It depend when you trade and why you trade.
If I want to trade for the hell of it, for fun, to fill boredom, to gamble, to play and experiment it will be less than 50%.
If I trade only in bull markets, it's greater than 50%.
TA question often asked... "Do trendlines work"?
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If I want to trade for the hell of it, for fun, to fill boredom, to gamble, to play and experiment it will be less than 50%.
If I trade only in bull markets, it's greater than 50%.
That is also true for coinflips and buy & hold…
The uncanny ability of Trendlines to work makes me think Al Brooks is right that Algos are watching Trendlines.
You can see how @Scataphagos came 3rd in a United States Investing Championship!
You can see how @Scataphagos came 3rd in a United States Investing Championship!
The way I see it, Blind Freddy can be profitable in a bull market.
These days the market has become so efficient, FA has no advantage over TA.
If the market is not bullish, only ~5% of stocks will make money, but try and pick 100% of that 5% - you can't. The 5% can include illiquid difficult to trade zero fundamentals stocks.
The only way to trade imo is to go with the flow and it doesn't require FA.
Again there are ~5% of traders who will make a killing no matter what market, they probably have the technology and data us bottom dwellers are not aware of.
Buy low PE, low P/S, positive cash flow companies with realistic growth prospects and solid balance sheets.... throw in a smart CEO.... and FA will win every time. Unless you have the quarter to quarter ADHD syndrome.
https://www.elitetrader.com/et/attachments/kr-jpg.317305/
---> 3200% on a grocery store. SPX up 1100% in the same period.
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Firstly ease of use. A quick look at a chart tell me all I need to know about a stock.
A visual pleasing look at what a stock has done in the past
I don't have access to the research that the institutions pay for.
I don't trust the numbers published by the corporations. As long as there is GAAP, the numbers can be manipulated to whatever management decides should be made public. Accounting industry overseeing the accounting industry, what could possibly go wrong.
Price tells me what the market perceives the value to be.
And before you send a chart asking what the price will do tomorrow, I don't know.
If you send a 5 yr weekly and 1 year daily I can tell you if I'd consider a trade. Where I would enter and where I would exit if it moves against me.
All GAAP/Non-GAAP aside.... 90% of the time, you can't fudge the top line....
Quarterly eps are meaningless.
Smart folk look at top line organic growth.... and the forecast of such going forward.
Not true!
These sort stocks you describe, do you think you are the only one to recognise the FA value and then buying and holding? No, a trillion other fundamentalists have seen it too and the price is already baked in.
Lets go one step further, you mention ".... throw in a smart CEO.... and FA will win every time."
Pffffffffp. These sort stocks are dime a dozen amongst those 'hunting for a bargain' those rock solid as it were fundamentally sound stocks are plodders. (Think of a donkey).
If you want bang for bucks, the best outstanding ones have no fundamentals, they rise on greed and speculation, they fly to the moon - then crash - but you gotta GTFO fast, that's trading.
But it can be done, so I don't put a lot of faith in the fundies.
The other reason I ignore the fundamentals is that they bias my thinking and I tend to ignore what the market is telling me.
I trade quarters and my time horizon is typically 0-14 days (including intraday). But again, we all have different styles. Some people are “hobbyists” and others are more profit oriented. I think if you’re looking to make money in the markets you may want to focus on the latter (profit oriented) and build a style that is accretive to your hit rate. I think it’s horrible advice to tell people to use “trend lines” or other price chart-based approaches unless you can prove that it improves your hit rate. Again, if you’re driven by profit, you’re not going to add steps that reduce performance lol.