Thread: So TA is bullsh*t it seems..

Originally Posted by M6Cabrio

I run a CPO/CTA fund...although not in the billions under management, I do know many larger ones and the traders do use tech's. Fundamentals are seen more in the stock funds though, not futures/commodity funds. I would say 90% or better use tech's more than fundamentals for their positions.

Unless you are considering quant strategies as TA(which they are not) then TA is not commonly used. I'm not knocking it, I have no opinion on it one way or the other.

it depends on your goals and what your trying to accomplish. If your trading a stock and you plan on holding for 30 minutes would fundamental analysis be really necessary? Almost all data on a companies fundamentals are lagging by a few months as you only have the recent quarterly numbers so your data might be 3 months old. Also if your doing market timing then fundamental analysis has little do when and where a stock goes up. Only t.a. can help you time a stock to the second that its going to move up or down. But in the end its not an exact science just like fundamental analysis. There are 1000s of ways to trade or invest. The key is to find a style that matches your own personal goals and your own personality and most importantly your timeframe.

even technical analysis its not so much about memorizing patterns & charts but understanding the motivations of market particpants in a way that you can accurately predict POTENTIAL outcomes in a stokc and then assign probabilities to them.

Originally Posted by miabullitt

All my finance professors preach TA to be utter crap and say Fundamentals are the only method by which one should invest. They used Buffet, Soros, and other top wallstreet names to back up their claims. I know a lot of people here practice TA successfully.

What are your thoughts?

Nothing is 100% certain. Both Technical and Fundamental Analysis are merely TOOLS used to analyze or filter stocks. I personally think TA is useless when factoring in my goals, time frame, etc. But it is definitively useful in the short run to determine a reasonable price at which to buy or sell. Always do your homework. Discipline and patience will become your best friends.

AXL is correct, these are merely tools. There is no fool proof method for doing this. I personally would not use Fundamental when looking at short term trades, it just doesn't make sense. Technical can provide you with a much better image for that. On the other hand, I would rarely if ever rely on TA for an analysis of a stock that I am planning to hold on. The information on that would be too arbitrary to analyze the Technical pattern for periods longer then a few days.

In my opinion ta and fundamentals are the same in the sense that a stock with poor fundamentals would probably not be seen breaking new highs. In other words, you can get an idea of a stocks fundamentals by looking at the charts. RIMM and APPL are perfect examples of this.