Technical Analysis & Speccies?

[Wrath]

Just realised there is a share based forum on here. Thought l would canvass a bit of an opinion amongst BigFooty users. Do any of you guys use technical analysis for share trading or predominately use fundamentals or perhaps a combo of both. Personally l like to use a combo of both but with a leaning towards the technicals.

l also enjoy playing the specs, although they are crap at the moment, there is alot of value to be had in the specs at present if you have the holding power and the nuts.

Look forward to reading some feedback.

Wrath

 

[TheBloods]

I think a combination is best, but I lean more towards fundamentals. However, I don't think you can ignore technicals because so much of the market believes in them that they become partly self-fulfilling.

BTW- I used to sit next to the largest bond market technical trader in Australia - he used to make decent money from it! He couldn't believe that people still ignored it. He still looked at fundamentals too, but not to the same degree as an analyst of course.

 

[RW]

I'm partial towards fundamental analysis myself...but that might just have something to do with the fact that I've just done a financial statement analysis subject at uni.

One thing I've learned - it can be more or less impossible to use fundamental analysis to accurately value internet stocks or dotcoms that haven't posted a profit yet!

I think that "don't invest in what you don't understand" does hold true here - which is why you need to have a good understanding of the industry/company to do a proper fundamental analysis.

Anyway that's my $0.02 worth.

 

[Frodo]

yep, combination of both.

Short term gains usualy come from analysis.

Long term from Fundementals.

 

[Crow-mosone]

capital asset pricing model - discuss?

 

[R'Kid]

I myself am a big fan of technical analysis. Nothing against fundamentalists, many of them do very well in the market, but I've been brainwashed by guys like Daryl Guppy. People need to choose what style best suits them. For me, thats technical analysis.

 

[Crow-mosone]

I myself am a big fan of technical analysis. Nothing against fundamentalists, many of them do very well in the market, but I've been brainwashed by guys like Daryl Guppy. People need to choose what style best suits them. For me, thats technical analysis.

another way of saying you like to guess in your own way?

 

[bugman5]

I work in the finance sector, and I'm happy to say technical analysis is utter bollocks. Unfortunately, it works as a self-fulfilling prophecy, but really only in the short term.

For investment, I'd use both, but a heavy weighting towards fundamentals.

 

[Frodo]

I work in the finance sector, and I'm happy to say technical analysis is utter bollocks. Unfortunately, it works as a self-fulfilling prophecy, but really only in the short term.

For investment, I'd use both, but a heavy weighting towards fundamentals.

Can't really say it's bollocks. The fact is that technical analysis is a natural outcome from technical decision making eg auto stoplosses etc,. Once one computer program is used to 'assist' another program analyses and advises.

 

[bugman5]

True, I'm being harsh. But the fact remains it can't be used on its own.

There is nothing more frustrating than trying to convince someone that just because a price has exceeded its 120 day average it doesn't have to fall. If you ignore fundamentals you deserve to do your money.

 

[Crow-mosone]

True, I'm being harsh. But the fact remains it can't be used on its own.

There is nothing more frustrating than trying to convince someone that just because a price has exceeded its 120 day average it doesn't have to fall. If you ignore fundamentals you deserve to do your money.

of course, you are correct. This is all a bunch of boloney based on how someone miraculously correlated the beta & unique risk of their stock in 2 minutes on excel. Besides, drawing a couple of trend lines is not technical analysis to begin with.

I haven't even gone into my favourite - random walk theory.

Fundamentals, technicals is all a fancy way of trying to add science to guesswork. I am not convinced much other than guesswork is being discussed here, certainly given the short term focus.

 

[R00StaR]

I trade mainly with TA, some stocks I really like the fundamentals of ill hold in my longer term portfolio. Usually these stocks will be illiquid, hence harder to trade as id like, otherwise ill just trade them based on TA. Because no mater how good I think a stocks fundamentals are there is little point in holding if the price is going down if the liquidity is there.

TA wise Im probably a mix of Weinstein, Guppy, and Bedford

 

[Squeak]

My cousin's husband (an ex-international sportsman with lots of money to play with) spends alot of his time now using $10,000 worth of software to trade using charting. He'll only ever hold one stock at a time and rarely for more than a day at a time. One of the advantages I can see from it is that it takes any emotional attachment out of buying and selling.

 

[R00StaR]

Ouch $10k on software, any idea what it is? I use Bullcharts, cost about 1k from memory plus about $140/ month data fees. I often daytrade certain stocks if I have time, at the moment it’s a full on managing 30+ open positions which I generally hold for few weeks, maybe a few months if it really behaves itself.

 

[Squeak]

Not sure of what its called - its very involved though, he has 3 screens running different charts and analysis at the same time. My dream is to one day have enough money and time to spend my time doing that (although it helps that he has properties in the Caribbean that he collects rent from as well).

 

[R'Kid]

another way of saying you like to guess in your own way?

How am i saying i like to guess? clearly both styles can either be very profitable or crash and burn. im just saying people need to choose their method which best suits the way they want to trade. personally i rarely hold a position longer than a few weeks, so i prefer to use technical analysis rather than fundamental. if i was investing for the long term id definitely use fundamental analysis, but im not. there is no universal correct way to make money out of the market, if there was it would have been found by now. its up to the individual. let your results speak for themselves!

 

[Verbeek]

Tech all the way!!!

 

[Crow-mosone]

How am i saying i like to guess? clearly both styles can either be very profitable or crash and burn. im just saying people need to choose their method which best suits the way they want to trade. personally i rarely hold a position longer than a few weeks, so i prefer to use technical analysis rather than fundamental. if i was investing for the long term id definitely use fundamental analysis, but im not. there is no universal correct way to make money out of the market, if there was it would have been found by now. its up to the individual. let your results speak for themselves!

Perhaps you can share your assumptions estimating beta and lambda?

 

[Verbeek]

I work in the finance sector, and I'm happy to say technical analysis is utter bollocks. Unfortunately, it works as a self-fulfilling prophecy, but really only in the short term.

For investment, I'd use both, but a heavy weighting towards fundamentals.

What is your role within the finance sector that makes you think tech is bollocks?? Personally, i rely ONLY on tech and do not worry about fundamentals as i believe everything is reflected in price (ie charting and tech analysis).

The thing i really dislike about fundamentals is how easily they can be manipulated (eg: fin statements and news) and ultimately mean jack s.hit! I think BHP is a prime eg. Almost as soon as they announced the largest profit in Australian corporate history this year their price started falling... How can you rely on fundamentals with any confidence? i dont get it...

 

[Crow-mosone]

What is your role within the finance sector that makes you think tech is bollocks?? Personally, i rely ONLY on tech and do not worry about fundamentals as i believe everything is reflected in price (ie charting and tech analysis).

The thing i really dislike about fundamentals is how easily they can be manipulated (eg: fin statements and news) and ultimately mean jack s.hit! I think BHP is a prime eg. Almost as soon as they announced the largest profit in Australian corporate history this year their price started falling... How can you rely on fundamentals with any confidence? i dont get it...

this doesn't make a lot of sense, consider your first point: if all known information is reflected in the market price, then there can be no arbitrage opportunities; i.e. no share can be under/over valued. If the share is priced perfectly efficiently, then the only source for growth is fundamentals. so your method presumes that the basics are not bollocks then.

as for manipulations, well, shall we simply say you can present anything on a technical basis.

the fact is, that all information is not reflected in the price so I am not sure what to make of your assumptions.

 

[kizza]

yep, combination of both.

Short term gains usualy come from analysis.

Long term from Fundementals.

Bang on the money there! Fundamentals reflect the underlying cashflows of the stocks you're actually trading, whereas tech analysis tends to latch onto market sentiment.