Which one do you use? Technical or fundamental analysis?

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

But seriously, here are some *professionals* and their publically traded results over the last 6mths including that rather nasty May break.

Duc I would say healthy May break.

 

[bullmarket]

Re: Which one do you use? Technical or fundamental analysis

:iagree: cuttlefish....I use both FA and TA

I believe that both approaches - technical or fundamental (or a combination of both) will work if applied correctly.

My own preference is a fundamentals, basically ben graham with a bit of buffet, approach. But I've seen quite a few comments about Buffet and Graham from both the fundamental and technical side of the debate that mismatch with my own impression of their philosophies.

At the moment I'm wanting to get a better understanding of technical trading and also use of leveraged instruments to improve on my underlying approach.

I think both approaches are not mutually exclusive.

My thoughts on the two approaches:

A fundamental investor is trying to pick assets that compare well to other assets that are available (including other stocks, bonds, property, cash etc.)
They do this based on looking at the income that can be received when compared to the cost of the asset (income doesn't have to be dividends - the profitability of the company is income), and the potential growth of that income compared to income growth that can be achieved from other assets.

Capital gains are not a strong focus for a fundamentals based investor, but often are a by-product of fundamentals based investing.


A technical trader is trying to pick the current market sentiment/psychology surrounding a particular stock or sector. All people that have bought shares are aware of the power of emotion, and as a result 'crowd' behaviour is to some extent predictable and follows repeatable patterns. These are the patterns that chartists look for. They then try to capitalise on a particular psychology by either backing a trend (e.g. identifying a breakout and running with the herd untill it runs out of steam), or trading against the psychology of a trend (e.g. selling at the top of a range bound stock and buying at the bottom of that range -i.e. against the psychological trend).

There is plenty of room for both techniques - one is a more active process and more akin to running a business. The other is a more passive approach.

The things that both require are:

* Doing your own hard work - either in trend analysis or fundamental analysis and making your own decisions and being prepared to back yourself.
* Having the discipline to formulate and stick to a plan. A plan needs to have metrics. Buying because it looked good that day or didn't isn't a plan. That doesn't mean the approach can't be discretionary, but there still needs to be a plan for entry and exit.
* Investing or trading to a plan is essential otherwise you are investing based on emotion and that is almost guaranteed to fail.

From my own perspective I think a good understanding of both will benefit any trader or investor.

 

[ducati916]

Re: Which one do you use? Technical or fundamental analysis

bunyip Peanut

Duc, you continue to miss the point..... We.....Don't....Care...About....What....You'd..... Like.....To.....See....Or.....Not....See.
Got it? Most of us on this forum just don't care about you!

I'll say it again, this time more strongly. Most of us on this forum couldn't give a toss what you'd like to see or not see. Most of us couldn't care two hoots for your opinions. Most of us are not the slightest bit concerned whether you do or don't believe us.

Ahhhh a rebellious peanut.
A rebellious peanut full of excuses.

Could it be due to time contraints?

Trading involves too much time? Rubbish......about an hour each weekend if you trade from weekly charts, or about 15 to 30 minutes a day if you trade from daily charts.

But no.........it takes no time at all.

Because it's total rubbish?

even though you and many others (including some of the most respected people in the industry) have been using it for years to consistently outperform the market.

Hell no!

I'm intrigued by the claims of those who dismiss this approach as unworkable.
Do you really believe I'll underperform the market by only buying stocks that are outperforming the market?
Are you really suggesting that the pople I've mentioned above are fools and pretenders who don't know what they're talking about and can't trade successfully?

Well, I'm interested.
I don't need your methodology divulged.
I don't require explanations.

You see, I'm a doubter.
The people you've mentioned............all peanuts, [well, Guppy, Bedford & Hull anyway]

So, all I asked for was a demonstration via some live trades.
Intrestingly that almost always produces one result out of two possibles;
The first, some trades are posted.
The second, always produces a flurry of excuses and abuse.

Obviously, you fall into category #2. Lots of excuses, and abuse.
Therefore no further analysis required, you are a peanut.

I wonder what would happen if you and I met each other face to face. Would two peanuts start punching each other on the nose, or would we slap each other on the back, head for the nearest bar and have more laughs over a few cold ones.

Well you can ask Magdoran next week.
He's visiting our little village this week, and we are going to meet up.

Snake

Duc I would say healthy May break.

Healthy it is then.


jog on
d998

 

[bullmarket]

Re: Which one do you use? Technical or fundamental analysis

Hi ducati

I'm intrigued that you don't practice what you preach when you ask other chatters to post live trades.

I assume that you are aware that anyone with access to course of sales can simply look up some potentially profitable buy/sell orders and then post in here that they are theirs without providing any verifiable information that proves the person sitting at the keyboard posting the alleged trade is the actually the person who placed the order in the cos.

Therefore, in order to take you and your request for chatters' live trade information seriously, why not set an example and take up my challenge to you to practise what you preach and post in here any live trades that you have made along with verifiable information proving that the person sitting at the ducati keyboard actually did make those alleged trades.

Imo unless someone posts verifiable info proving the person sitting at the keyboard actually made the trades then it is 100% justifiable to dismiss the alleged trades as horse manure....and for obvious reasons no-one will post the verifiable personal information and so there is no point in posting alleged live trades.

My says you won't practise what you preach

cheers

bullmarket

 

[eddievanhalen]

Re: Which one do you use? Technical or fundamental analysis

Doh - I've returned earlier than I said. Got the sort of response I expected.

Despite my better judgement I will bite re SP's comment though ..........what do you find intriguing about holding 70 positions??

Cheers,

Ed

PS I've said many a time that I have no desire to prove myself to anyone on the internet but if Duc ever visits my humble village (Melbourne) he is quite welcome to contact me via PM and arrange to catch up for a coffee and view some tax returns/trading statements that will very quickly put a sock in it. That's as far as I'll go..............you can hold me to that and I have only conceded that much ground because I feel it would make a big difference to the members in this thread to see Duc return to this thread with his tail between his legs (which I am sure he would do as I cast no aspersions on his honesty)

 

[ducati916]

Re: Which one do you use? Technical or fundamental analysis

Mr bullmarket

But I do post live trades.
I update my positions once a week.

tech/a loves to remind me of my *losses*.

https://www.aussiestockforums.com/forums/showthread.php?p=52194#post52194

I hope you research your positions with a little more diligence.
I also used to post live *daytrades* on reef, before my rebirth as a *fundie*

My results were approximately the following;
Average winning trade 1.5%
Average loss 0.5%
Wins to losses 50/50
1yr return 87%

jog on
d998

 

[ducati916]

Re: Which one do you use? Technical or fundamental analysis

evh

PS I've said many a time that I have no desire to prove myself to anyone on the internet but if Duc ever visits my humble village (Melbourne) he is quite welcome to contact me via PM and arrange to catch up for a coffee and view some tax returns/trading statements that will very quickly put a sock in it. That's as far as I'll go..............you can hold me to that and I have only conceded that much ground because I feel it would make a big difference to the members in this thread to see Duc return to this thread with his tail between his legs (which I am sure he would do as I cast no aspersions on his honesty)

I may well visit Melbourne, but this is what always intrigues me, why would you show me your trading statements, yet not post a couple of live trades?
Passing strange methinks. What's the big deal? No-one if *trading* wins every trade..........losing is part and parcel.......I think I remember a bad streak of about 10 posted trades all losers, one after the other....so what.

Hell tech/ a phones me at 1am to laugh at my positions. [not really]
If I ever get over there, Australia, gotta be careful, not terribly popular you know, if you are a market wizard, I would absolutely confirm it.

I am a bounder, but not a cad!

jog on
d998

 

[eddievanhalen]

Re: Which one do you use? Technical or fundamental analysis

No worries Duc - I've said my piece and said far more than I really wanted to. The offer is open ANYTIME. As Bunyip said you cannot seem to understand that some of us are too busy trading to be bothered trying to prove ourselves on an internet forum. What the hell is the point??? I am about trying to share some of my ideas from time to time as I have some understanding of how hard the game is starting out (and all the time really ).

I have no doubt that if you returned to this thread and acknowledged that what I have been talking about is possible that it may snap some people here out of limiting their goals to returning barely better than benchmark rates. I will have helped some people out.

Until I hear from Duc via PM this is my FINAL post on the matter , other than perhaps to address Snake's concerns.

Ed

 

[bullmarket]

Re: Which one do you use? Technical or fundamental analysis

Hi ducati

Mr bullmarket

But I do post live trades.
I update my positions once a week.

tech/a loves to remind me of my *losses*.

https://www.aussiestockforums.com/forums/showthread.php?p=52194#post52194

I hope you research your positions with a little more diligence.
I also used to post live *daytrades* on reef, before my rebirth as a *fundie*

My results were approximately the following;
Average winning trade 1.5%
Average loss 0.5%
Wins to losses 50/50
1yr return 87%

jog on
d998

I don't know if your alleged 'live' trades are true or just horse manure because of the reasons I posted earlier.....and therefore I have no reason to believe what you post is true in any way.....it may or may not be..

But in the mean time I will continue to exercise my 100% right to choose to believe that your alleged trades are not true in anyway whatsoever.

If for some obscure reason it is important to you that I personally believe your alleged trades are true then the onus is on you to provide verifiable information substantiating your claims because no-one is under any obligation whatsover to just blindly believe what they see in chatrooms like this

Let's see how you go....as I said earlier my says you won't substantiate your alleged trades to me

cheers

bullmarket

 

[ducati916]

Re: Which one do you use? Technical or fundamental analysis

evh

No worries Duc - I've said my piece and said far more than I really wanted to. The offer is open ANYTIME. As Bunyip said you cannot seem to understand that some of us are too busy trading to be bothered trying to prove ourselves on an internet forum. What the hell is the point??? I am about trying to share some of my ideas from time to time as I have some understanding of how hard the game is starting out (and all the time really

).

My interest in live trades stems from two main reasons;
#1
If the trader really can return the claimed profitability, and is willing to demonstrate his trading and psychological approach to the market, anyone who is starting out will see that it is not easy, that a disciplined approach is required, that losses happen, but more importantly, how those losses are managed, how winners are managed, what to do on days that absolutely nothing goes right etc.

They will then see, hell, it's not just them that can struggle and have a bad day, everyone is capable of a truely **** day.
If the trader really is as good as he says, his beating the market is not luck, it is not dependant on market conditions, good market, bad market, but on his skill, discipline, strategy, knowledge, experience.

There is a real peanut, lives and works in the UK.
He earns part of his living teaching people to daytrade.
He claims XYZ results.
After paying over some $3000 dollars to the peanut, he cannot even demonstrate his trading to you...........absolute nonsense.

Here on this forum, you have something similar.
No-one charges as far as I know, but you have the armchair experts.
When asked to demonstrate.............that's not what we do is the invariable excuse.

I don't daytrade anymore.
But I could post live trades.
Would I make any money? Hell who knows, but for a new trader seeing the good and the bad would probably be a big help.

Anyway I'm sure you take the point.

I have no doubt that if you returned to this thread and acknowledged that what I have been talking about is possible that it may snap some people here out of limiting their goals to returning barely better than benchmark rates. I will have helped some people out.

No not really, most believe anyway...........because they desparately want to believe. What they are lacking is any practical help from the *experts*.

jog on
d998

 

[Julia]

Re: Which one do you use? Technical or fundamental analysis

Hi ducati



I don't know if your alleged 'live' trades are true or just horse manure because of the reasons I posted earlier.....and therefore I have no reason to believe what you post is true in any way.....it may or may not be..

But in the mean time I will continue to exercise my 100% right to choose to believe that your alleged trades are not true in anyway whatsoever.

If for some obscure reason it is important to you that I personally believe your alleged trades are true then the onus is on you to provide verifiable information substantiating your claims because no-one is under any obligation whatsover to just blindly believe what they see in chatrooms like this

Let's see how you go....as I said earlier my says you won't substantiate your alleged trades to me

cheers

bullmarket

Precisely how would you like Ducati to "verify" his claims?

Julia

 

[bullmarket]

Re: Which one do you use? Technical or fundamental analysis

Hi Julia

Precisely how would you like Ducati to "verify" his claims?

Julia

go back and look at my earlier posts and you will find the answer to your question there........I'm not going to place restrictions on the 'how' which could then be used against me as an excuse for not providing verifiable info.

All I would require is that the info conclusively proves that the person sitting at the keyboard making the alleged claims of 'whatever' is the actual person who did the 'whatever'

cheers

bullmarket

 

[ducati916]

Re: Which one do you use? Technical or fundamental analysis

Mr bullmarket

I don't know if your alleged 'live' trades are true or just horse manure because of the reasons I posted earlier.....and therefore I have no reason to believe what you post is true in any way.....it may or may not be..

But in the mean time I will continue to exercise my 100% right to choose to believe that your alleged trades are not true in anyway whatsoever.

If for some obscure reason it is important to you that I personally believe your alleged trades are true then the onus is on you to provide verifiable information substantiating your claims because no-one is under any obligation whatsover to just blindly believe what they see in chatrooms like this

Fair enough.
The trades, whether real, or manure, have the following important points.
#1 They demonstrate a methodology, viz. value investing.
#2 They demonstrate the vagries of the market viz things that can go wrong.
#3 They demonstrate my management of the trades
#4 They will either support, or refute my claims of profitability, if employing the methodology.
#5 I'll always reply to any questions, queries, etc
#6 They demonstrate discipline in the execution of the plan
#7 They demonstrate an alternative to technicals etc.
#8 They demonstrate my willingness to walk the walk.

Whether you find that of value, or not, is immaterial.
I would hope that anyone contemplating a value methodology, would find something of value..........even that being that ....hell, this ain't for them.

The world is full of peanuts that talk endlessly, yet provide very little.

jog on
d998

 

[bullmarket]

Re: Which one do you use? Technical or fundamental analysis

no problem ducati

cheers

bullmarket

 

[tradez]

Re: Which one do you use? Technical or fundamental analysis

I would like to put a question to the investors who predominately rely on fundamental analysis and hold positions for the long term If you are currently holding a portfolio of companies with sound fundamentals, is there a point at which you will bail out of your positions based on a substantial drop in the market and therefore the share prices of your stocks? or are you willing to hold those stocks (assuming their fundamentals have not adversely changed) regardless of how low their share price goes? I only ask this because i think it would take a tremendous amount of courage and conviction to hang on to shares as they plummet even though you are convinced the underlying business is sound.

 

[MichaelD]

Re: Which one do you use? Technical or fundamental analysis

Can you give us a brief rundown on what Tharp and Le Beau are using as entry signals. And what you're using yourself?

Haven't got to that part of the book yet, sorry.

Van Tharp's message to date is that it doesn't matter what you use as an entry setup/signal so long as you size and manage the trade appropriately. The underlying message simply is "use whatever you think makes a difference, but so long as you do the important stuff as well, you'll come out ahead".

Myself, I use;
Setup: 1. CLOSE above long term moving average.
Entry: 2. What is essentially a 3 candlestick bullish continuation pattern.

Both of these entry conditions improve system expectancy and decrease drawdown in all market conditions that I have backtested on (Bull, Bear, Crash, Delisted, Dead Cat Bounce) against random entry.

I do not at this stage have any other setup conditions, but am actively working in this area to improve system expectancy and drawdown. My belief is that I will find an edge in the use of an advance/decline line, but haven't found it yet - I still have, however, much to do.

 

[wayneL]

Re: Which one do you use? Technical or fundamental analysis

Wayne, that is from the Motley Fool, and is perposterous.

Warren Buffett would not invest is small undiscovered lightly traded small caps. The very notion is laughable.

The Motley Fool is a joke, a scam and a spam generated nuisance, anyone that takes any advice from them is asking for trouble.

Not withstanding the comments about Motley Fool, which I can agree with, I think you have missed the point.

No, WB would not invest in small caps, because of his bloated capital base, I believe the article makes that clear. But if WB had less than 1 million to invest, then the implication is that the story is different.

Is this account apocryphal? Could be, no way verify 100%. But one thing is indisputable, folks with less than a million in capital who invest in smaller companies, can do a hell of a lot better than BRKA (which has been remakably resilient in the latest route btw... trading at $92,600 a share atm)

This is not to bag Warren or his methods. The man has done remarkably well. But smaller size has a definate advantage over the market megaliths.

Trying to emulate the big fella though, is sub-optimal for a small individual investor. IMO

But if it does what you want it to do for you, then Godspeed. But ferchrissake the man ain't God and there are several other answers available to small investors, including trading.

Cheers

 

[nizar]

Re: Which one do you use? Technical or fundamental analysis

Agree Wayne

Thats why some fund managers close their funds early after reaching a point, say 200million, coz once u get too big u cant move in and out of positions

 

[BSD]

Re: Which one do you use? Technical or fundamental analysis

Trying to emulate the big fella though, is sub-optimal for a small individual investor. IMO

But if it does what you want it to do for you, then Godspeed. But ferchrissake the man ain't God and there are several other answers available to small investors, including trading.

Cheers

Absolutely correct.

WB and 'value' investing usually gets wheeled out in bear markets.

WB got so big he had to move into re-insurance to get any meaningful exposure to 'value' bets.

His 'old' strategies have limited relevance to his current work and WB's success over the years using a particular style has no relevence or predictive ability to the success of the style in the future.


Gates is richer than WB, why not set up an IT start-up?


As an aside, does anybody in here diversify their risk by outsourcing the management of any of their portfolio or hold assets other than Australian/US equities/derivatives.

It probably needs another thread, but I limit my 'trading' in Aussie stocks to about 10-15% of my portfolios. The rest is spread globally across asset classes, managers, strategies long and short.

For instance, what happens when you rely on volatility in the Aussie market (up or down) to make a crust when the market gets boring for 18 months?

Or alternatively, have the buy and hold guys ever thought of the effect of a five - ten year Australian bear market?

 

[swingstar]

Re: Which one do you use? Technical or fundamental analysis

Gates is richer than WB, why not set up an IT start-up?

Aren't you doing that? ZOMG you're gonna lose all your money and be poor.