Technical Analysis vs. Fundamental Analysis
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tech/a
No Ordinary Duck
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End of conversation.
Seems like this thread go slightly off topic and ended abruptly.
Fundamental or technical...the smartest way to trade is to stick to your strengths and delegate any weaknesses like one of the previous posts on page 13 (by notting) suggested. Good luck to all.
Fundamental or technical...the smartest way to trade is to stick to your strengths and delegate any weaknesses like one of the previous posts on page 13 (by notting) suggested. Good luck to all.
i acknowledge and accept our communication has come to an end.
the hair on the back of my neck bristles when someone takes the time to post something and says stuff all..........
so what is it we are all missing.......
i know you don't have the holy grail
nor do i
but don't come across as if you're holding the intangible
[video=vimeo;19621172]http://vimeo.com/19621172[/video]
Really?
Your "mentor" is where I learnt my whole trading philosophy from.
tech/a
No Ordinary Duck
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Evidently it was on a personal level.
I haven't been able to find anything that verifies the information I received many years ago.
So I guess it should read ---- alegedly
tech/a
No Ordinary Duck
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Sorry now I'm with you. The link wasn't there before.
My suspicion remains.
I ware a number of different "Personality" hats at various times in the market.
If I wore the same hat and stuck to it I wouldn't trade different instruments and different time frames let alone Discretionary and Systematic.
So yes Really.---in my case.
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Even the government goes for Technical Analysis.
They are obsessed with TA.
They are obsessed with TA.
Do tell
So_Cynical
The Contrarian Averager
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Back in October 2010 robusta issued the challenge.
https://www.aussiestockforums.com/forums/showthread.php?t=2694&page=7
And i was the only one to respond.
For the first few months of the challenge my portfolio was up a little more than robusta's however that didnt last long and at the 8 month point robusta was from memory about 10% ahead of me.
On page 12 of this thread i rebalanced my portfolio due to TSI getting taken over, robusta didn't do any rebalancing.
Anyway here we are 18 months from the original post and i though it would be interesting to see how the comparison of robusta's "value" portfolio was travelling against both my portfolio of discretionary "cheap high dividend" stocks and the ASX200
Looks like im way out in front of both robusta and the ASX200
~
https://www.aussiestockforums.com/forums/showthread.php?t=2694&page=7
And i was the only one to respond.
For the first few months of the challenge my portfolio was up a little more than robusta's however that didnt last long and at the 8 month point robusta was from memory about 10% ahead of me.
On page 12 of this thread i rebalanced my portfolio due to TSI getting taken over, robusta didn't do any rebalancing.
Anyway here we are 18 months from the original post and i though it would be interesting to see how the comparison of robusta's "value" portfolio was travelling against both my portfolio of discretionary "cheap high dividend" stocks and the ASX200
Looks like im way out in front of both robusta and the ASX200
~
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A Technical Analyst and a Fundamental Analyst are chatting about the markets in the kitchen.
Accidentally one of them knocks a kitchen knife off the table, which lands right in the fundamental analyst’s foot!
The fundamental analyst yells at the technician, asking him why he didn’t catch the knife?
“You know Technicians don’t catch falling knives!” the technician responded.
He in turn asks the fundamental analyst why he didn’t move his foot out of the way?
The Fundamental analyst responds, “I didn’t think it could go that low€.
Accidentally one of them knocks a kitchen knife off the table, which lands right in the fundamental analyst’s foot!
The fundamental analyst yells at the technician, asking him why he didn’t catch the knife?
“You know Technicians don’t catch falling knives!” the technician responded.
He in turn asks the fundamental analyst why he didn’t move his foot out of the way?
The Fundamental analyst responds, “I didn’t think it could go that low€.
Here is some nice skeptical discussion of the value and the pitfalls of technical analysis:
http://skepticaltradingstrategies.com/index/does-technical-analysis-work/
I suppose, very similar arguments can be made with respect to fundamental analysis.
http://skepticaltradingstrategies.com/index/does-technical-analysis-work/
I suppose, very similar arguments can be made with respect to fundamental analysis.
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It's funny how some people make fun of fundamental analysts with their 'witty' jokes when the actual joke itself shows that they don't understand how fundamental analysis works in the first place. Pretty ironic actually.
Knobby22
Mmmmmm 2nd breakfast
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Bit of truth in the joke though.
All fundamental investors are tempted to catch falling knives, but it is very risky behaviour.
It pays to know a few basics that technical analysts use to reduce risk.
Fundamental investing works but it is hard. You are dealing with old information and can fall into traps set by a CEO wanting to make his bonus. The aim of the Fundamental investor is, like the technical guys, is to predict the future.
All fundamental investors are tempted to catch falling knives, but it is very risky behaviour.
It pays to know a few basics that technical analysts use to reduce risk.
Fundamental investing works but it is hard. You are dealing with old information and can fall into traps set by a CEO wanting to make his bonus. The aim of the Fundamental investor is, like the technical guys, is to predict the future.
Knobby22
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I'll give you a good example of a falling knife. Origin Energy dropped so I bought some. They look cheap to me. Worth heaps. but the dividend isn't that great and we have to wait 3 years before the gas is produced. Too long a time frame - so they drop. It is my only non performing share at present but it only takes one dud to reduce your earnings from great to average. I should have had a stop on it.
I disagree with the part I've bolded. To me, technical analysis means not making an attempt to predict the future, but placing oneself in a position to either benefit from a trend or be stopped out at a small loss should the trend falter. I think Tech was fond of saying the money was made from the math, not whether your predictions were right or wrong - and this sums up my understanding of technical analysis - hop on a trend and ride it, and get out fast if it fails. The profit comes (hopefully) from the amount made on winning trades outweighing the amount lost on the losers. Trying to predict what may happen in a year's time is hard enough these days, let alone trying to predict where the market/economy/world will look like 5 - 10 years from now.
Knobby22
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Yes and No. I know where you are coming from.
Obviously if you don't care about fundamentals you are not trying to predict where its going. however you are trying to predict a percentage of winning trades.
You are trying to predict where the share price is going and relying on it to change substantially.
You are using semi -proven human behaviour patterns to predict in which direction the share/market changes.
Sure, you are using capital management so you don't have to be right all that often.
You need positive expectancy to make money. You need an edge.
That's why you test the theories before implementing them. You can't tell me that all people who try to use technical analysis do well. There are many who lose, just as occurs (probably even more so) in fundamental investing.
Sorry if it's come up somewhere before but whats wrong in taking both sides here. Rather than Analysis vs Fundamentals why cant the two work together as a tool to buy shares? Does it have to be black and white?
I tend to look at both when buying a share. Even as an example with RED the Tech analysis won out over the fundamentals here but even so i dont think i would be in the black with that particular share if it weren't for the technical charts of the the share. Unless fundamental means long term i dont see any reason for the two work as one.
I tend to look at both when buying a share. Even as an example with RED the Tech analysis won out over the fundamentals here but even so i dont think i would be in the black with that particular share if it weren't for the technical charts of the the share. Unless fundamental means long term i dont see any reason for the two work as one.
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You see the problem with TAs when they criticise FAs is that they think that all FAs are uniform in their investments. Proper FAs don't simply chuck their money into any type of company like TAs seem to think. For example I would never invest in airlines.
They don't all try and catch falling knives either. Some FAs may just simply follow the Mr Market way of thinking made so famous by Buffett. Because it does happen. How else would have a great company like Domino's been valued at $2 for so bloody long?
You hear stories of "Oh I tried the buy and hold strategy a long time ago and I lost money. I used to be a fundamental investor". My reply to that is you bought and held the wrong company and/or most likely at the wrong time or that you relied to heavy on "professional" advice or the herd's advice.
They don't all try and catch falling knives either. Some FAs may just simply follow the Mr Market way of thinking made so famous by Buffett. Because it does happen. How else would have a great company like Domino's been valued at $2 for so bloody long?
You hear stories of "Oh I tried the buy and hold strategy a long time ago and I lost money. I used to be a fundamental investor". My reply to that is you bought and held the wrong company and/or most likely at the wrong time or that you relied to heavy on "professional" advice or the herd's advice.
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