Technical Analysis - is it more than just a Self fulfilling prophecy?

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I hate fundamental analysis. It offers no clue during the times/events that are going on currently regarding the virus and how it is hurting the markets and economies.

There are many companies that were very sound fundamentally but tanked by 40-50% when markets started to melt. There is much more fraud in FA also with CFOs cooking books like the recent case of Chinese coffee company.

 

[HolyGrailSeeker]

Technical analysis works as markets while looking almost random do have some biasness.

 

[ducatista]

its barely self fulfilling

 

[easymon1]

So my trading methology is based on Fundamentals

Is there a place where we could find a tight collection of source information that you use to make fundamentals related decisions?.

 

[Thor]

I see TA as a Self fulfilling prophecy but I'm open to see your POV

90% of TA is worthless, but the 10% that remains is pure gold.
The same goes for FA and Astro.

 

[Thor]

But most of my daily trading is selling options, so for me it's puts writing time right now and I use the backstop as my exit/delta.

As long as it works for you, thats the only thing that counts.

 

[Specterx]

I hate fundamental analysis. It offers no clue during the times/events that are going on currently regarding the virus and how it is hurting the markets and economies.

There are many companies that were very sound fundamentally but tanked by 40-50% when markets started to melt. There is much more fraud in FA also with CFOs cooking books like the recent case of Chinese coffee company.

FA is about much more than just glancing at 10-Qs or running a P/E screener. You mention Luckin Coffee, which was in fact identified and publicized by fraud-hunting FA short-sellers long before it collapsed. The two major FA methodologies I'm aware of are "identify where allocators will be going and why and position accordingly", and "identify and buy genuine value". Both work very well, but if it were easy everyone would be doing it.

When it comes to risk, every trading or investment methodology carries risks which need to be managed, especially in novel, rapidly-changing situations such as COVID. Being a fundamental investor doesn't mean you sit there with your thumb up your ass while a global pandemic eviscerates your portfolio of airlines and office REITs. In the final analysis, COVID was a gigantic generational opportunity for fundamental investors to buy cheap, and see those buys double, triple or more in just 3-4 months.

 

[deaddog]

From the trading proverbs thread.

Fundamental Analysis as a Trading Strategy:

“Fundamental analysis is usually the purview of large informed capital interests, which have the means and commercial contacts to analyze fundamental data more accurately than anyone else. The large amount of capital that these informed interests control can move the market price in the direction of expectations, at least over the short run. Speculation based on fundamental analysis, therefore, may be considered the domain of the large informed capital interests. By its character, successful fundamental analysis excludes the majority of small nonindustry speculators from participation, since they have neither large capital nor inside or informed industry information about supply and demand conditions.” - Allen Jan Baird

my bold.