T A is more powerful with FA

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ann

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Wednesday, January 25, 2006 - 12:40 am:

This thread has been initiated by the VRE thread where a young trader was encouraged not to post any Fundamental Analysis. As usual I found the attitude preposterous. and let fly, which I tend to do on occassions....no point in being wishy washy!

IC have an enormous readership and a lot of people are interested in both the Technical side as well as the Fundamentals.

A thread is started by someone and unlike Hot Copper and some of the ramp sites there is only one current thread for each stock. If the thread starter happens to be a rampant TA, he tries to dissuade all but his or her narrow view of a stock. This would be fine if there were any quantity of people posting about the same stock. It rather cheats the reader of getting a full view about a number of opinions and information on a stock which they may be planning to buy.

This has been an issue for some time. Colin tried to address this by introducing Integrated to accomodate Technical and Fundamental Analysis. It didn't work. To limit this forum to only Technical Analysis is foolish as the vast majority of investors/traders try to get a better outlook by at least checking the notices. If there are lots of us doing lots of work on a single stock, how much the richer is everyone's knowledge and how much greater our chances of success.

If people don't like to do FA fine, let others do it for you. Some of us enjoy hunting down information. If you don't want to do anything except look at charts just ignore the words. There may well be a tiny proportion of people who become confused with information overload and are unable to make a decision. Stay with your charts, don't read the words. Easy.

To limit your analysis is to limit your chance of success.

colin_twiggs

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Wednesday, January 25, 2006 - 10:24 am:

Ann,
Integrated Analysis is the right place for this. Short-term should be strictly TA. It may be an idea to merge Long-term and Integrated Analysis -- there is a great deal of overlap between these two topics. What do other readers think?

Regards,
Colin

ken

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Wednesday, January 25, 2006 - 11:36 am:

Colin,

I agree. FA has no place in short term unless it is confirming news which gives a reason for a move that has probably happened already. Sometimes there is an announcement that is relevant and causes a price spike but known financials don't move the price in the short term timeframe.

Ken

Trade with the trend, not against it.

The trend is the direction of the 22ema line (Elder)

hilarius

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Wednesday, January 25, 2006 - 11:58 am:

Good Afternoon

I think there is more reason to respond to a short term signal if the FA is favourable than if the FA is unfavourable

FA is always relevant

With Best Wishes

Hilarius

I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

rederob

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Wednesday, January 25, 2006 - 12:43 pm:

ken and others
it really depends what your fa sources are
in the energy/minerals sectors it is easy to forecast daily probabilities based on LME, COMEX and related commodity trading price movements - good candidates for daily trades
alternatively many stock rise substantially towards dividend dates especially when the dividend is known to be advantageous - my all time favourite being BSO
ta traders are unlikely to be swayed by fa arguments so i am not sure this thread has a life span
from a personal perspective i can only say that i make comparatively few trades each year and now tend to hold for longer and longer
over the next few years i have a deliberate strategy to add more weight to energy related shares and will only be using charts to improve entry prices
ta folk often say how hard fa is when all one has to really do is look at a chart
i doubt the ta folk "just look at a chart" before making serious decisions about buying or selling - there seem to be more "indicators" available to them than one can poke a stick at
whereas if STO dips to around $10 i will probably buy it - it is that easy

msparks

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Thursday, January 26, 2006 - 07:52 am:

Colin - we need another indicator

For those that like TA and FA, could IC add this chart to their stable ?
Just may be the best indicator of all the other ""rear vision"" indicators that everyone loves to look at and talk about ?
MRL

If only the forecast eps's were always accurate !

rederob

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Thursday, January 26, 2006 - 10:18 am:

Ms Parks
I have given you a "red" card.
That looks like a chart - and that's TA irrespective of any underlying FA indicators: I suspect you are trying to nobble the umpire!
I was very kind to ken, who says "FA has no place in short term unless it is confirming news which gives a reason for a move that has probably happened already".
In fact the opposite position is more useful to every trader and is evident whenever an important company announcement is made that indicates a reversal in that company's fortunes.
If you don't believe me, have a look at the trend of TLS before Sol took the helm and steered the ship into a storm.
Now look for the traders that are trying to anticipate a turnaround in TLS' share price.
As I said in my earlier reply, it depends on what sources of information you are using to underpin your analysis.
Ms Parks' chart is using "forecast EPS" - who is/are the forecasters? how old are the forecasts? are the forecasters at variance with each other? are the forecasts based on the company's own statements to the market or on independent analysis?
I note that some of the TA types that post here have very simple setups, and I assume from their continuing posts that they are relatively successful.
The beauty of FA and longer term trading is that you can trade/invest with only cursory cares about present share prices, as the underlying trends supporting the stock should propel it forward well into the future.
My cards are on the table with energy stocks on a very long time frame.
Over the next 12 months compare the prices of ZFX and KZL - on technical grounds they seem overstretched and may not give that "buy signal" you are looking for. On fundamental grounds the price of zinc is a long, long way from topping and will propel forward these two miners to the consternation of those seeking the technical "neatest correct entry" point.
On a highly speculative level AEX is about to acquire a South African property with known uranium deposits. If that transaction goes ahead, AEX is likely to leapfrog SMM and RPT in price as there are no regulatory impediments to mining uranium in SA: Where does one find this information in TA (by the way, I bought AEX 3 weeks before the current AEX thread appeared in IC and at AEX's historic low on acher's posted chart).
I believe that people will trend to what works for them and mix or not mix TA and FA as they see fit.
I get great enjoyment from learning about companies and how they are influenced by a multitude of factors.
When I get old and lazy and boring I could become equally excited by looking at a chart.

dug

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Thursday, January 26, 2006 - 12:10 pm:

I think a severe edit of integrated and then a intergration with the Long Term thread would be excellent.
Basically editing would require archiving of the numerous overlapping topics.The transfer hollis bollis of Holy Cow's Back Pages material when he joined me in exile[by choice in HC's case]is a mistake.[IMHO]
I'm sure as long as it was archived HC would not "pull d'stink";he posted the material for his future reference,I reckon he'd be still chuffed[or should that be chAffed?]if only access to it was available and not causing minutes of down load time for his "fans".

That's what I reckon anyway and I hope HC will return to the Forum soon,now the GunBoat diplomacy by the Old Guard Pure TAers has been well 'modified'
regards,
John

Dig for it.

spider

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Thursday, January 26, 2006 - 12:51 pm:

The answer to the topic might well be........... it depends on the person.

When I first discovered TA I was concerned that everyone would jump on the bandwagon and eventually ruin my edge.

I shouldn't have worried, people don't change, they still believe that Shares mag' or whatever is going to tell them what to buy. For a long time I singlehandedly tried to change this imbalance, without much success.

Then it dawned on me that these people were feeding my family, so I decided to leave them alone.

This bull market is helping a lot as well.

I was talking to my Jag mechanic yesterday, he takes tips from his customers as to what to buy for his super fund!
He is doing OK so he will continue to trade this way, and of course the bull market will never end and his super fund will continue to go up, and when it is all about to crash his customers will warn him, wont they?

To all FA traders I say, enjoy the ride while it lasts, but don't come whining to the TAers asking us why we didn't warn you about a change in direction.

Of course, the sky is not about to fall, or is it?

Sometimes you just need to look closely to see the signs.

ann

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Thursday, January 26, 2006 - 03:53 pm:

Thank you all for the feedback.

Perhaps the idea of 'Long Term' being the TA/FA combination would be a great compromise. I can see Robin now......face buried in hands! Wailing and moaning...."I don't have time to edit Integrated, I have way too much to do, like get Volume by Price up on the left hand side of the chart!"

Spider, they stopped printing Shares Magazine. November '05 was the last issue.

As far as people not knowing how to chart in case they 'took your edge'....this is not the best way to think.

The more people who act in unison the stronger the outcome. If a small beast [a few people] is given a heavy load to shift, it won't get very far, very quicky. If a huge beast [a lot of people] is given that same load, it will get there far more efficiently.

We have to try to get a lot of people to look at the same thing and react in the same way. I feel IC offers a charting system that all the world could use. Please don't cry Robin, Colin will get you some more help!

Wherever I post my chart, people say how good it looks. I have noticed recently, a lot of people are starting to sport IC charts where they hadn't before.

This in turn will bring in more readers to the IC forum.

When I had my account suspended from IC a while back, I found a small and largely empty little forum. I started moving stuff in and in conjunction to the brilliant young administrator, we started to build a site of truly integrated analysis. It is one thread per company and it is an ongoing saga. MRL is an interesting thread. This was started by someone who thought FA was the only way to go......HA, getting to him.

I think short term being entirely devoted to charting, would be an excellent idea. Everyone would know not to interrupt the chartists. If there was no thread for a company in long term, one could be started. Of course the chartists would be made most welcome to flick up a chart in long term. There would be no need to change the headings. Short Term.... charting only, Long Term both fundamental and technical.

(Message edited by colin_twiggs on January 27, 2006)

hilarius

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Thursday, January 26, 2006 - 04:19 pm:

Your Readiness

O what an unkind cut!

"When I get old and lazy and boring I could become equally excited by looking at a chart."

You mean like ... Hilarius ??? LOL

:-)

Hilarius

I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

hilarius

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Thursday, January 26, 2006 - 04:22 pm:

msparks

What a superbly brilliant magnificent chart

How many more like that do you have?

:-)

Hilarius

I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

ann

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Thursday, January 26, 2006 - 05:00 pm:

Rob said When I get old and lazy and boring I could become equally excited by looking at a chart.

I resent you calling me lazy Rob. I put a lot of effort into my charting and can get very excited on occassion.....as for the other two, well fine, OK, fair enough, no argument, point taken!

rederob

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Thursday, January 26, 2006 - 05:13 pm:

spider
You said, "To all FA traders I say, enjoy the ride while it lasts, but don't come whining to the TAers asking us why we didn't warn you about a change in direction".
Your kindergarten perspective of fundamental trading does you a grave disservice.
I suggest you go and look at the past few years of my posts on this site and see what I was buying or suggesting was "good buying" on anticipation of a change in direction or just on plain "value".
Then tell me where on this site I will find similar far-sighted guidance on stock picks from TA posters.
TA and FA are very different approaches.
Why not respect the differences rather than attempt to belittle those that don't do it your way.

rederob

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Thursday, January 26, 2006 - 05:28 pm:

Dear Ann and Hilarius
My "old, lazy and boring" remark was pure introspection and not intended to pass to other readers.
I am glad I omitted "silly" from the original post, because it was there!

hilarius

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Thursday, January 26, 2006 - 05:31 pm:

Your Readiness

I wonder whether our friendly Spiderman's disdain for FA is related to the slavish announcement anticipators who think that their tip will tip a stock higher when in fact it may already be fully reflected in the price which may be headed for a short term drop?

It is that sort of tipping which gives FA a bad name

The disciplined FA which looks at the underlying drivers of an upward trend (with its inevitable retracements) is an entirely different kettle of fish

When the FA and TA both are disciplined and analytical maybe FATA can combine the best features of either FA or TA on their own?

Clearly the Spiderman has seen too many instances where good FA has been accompanied by falling prices ... this probably means there is something in the FA which is driving the the downturn, and we might want to share his caution if not his desire to short

If Spiderman prefers to believe a chart in such cases we must respect his daring as he leaps boldly from one chart to the next, without the support of the FA safety net

With Best Wishes

Hilarius

I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

hilarius

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Thursday, January 26, 2006 - 05:33 pm:

Your Readiness

I claim the Exclusive World Rights to Silliness also!

Hilarius

I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

ann

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Friday, January 27, 2006 - 02:24 pm:

Colin,

Another thought to add. In Long Term combined, perhaps the heading could be maintained as first three letters of the Code followed by the Company Name. This would stop the thread from dating and it would be easier to find. Just a thought.

Best
Ann

tony_m

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Sunday, February 05, 2006 - 01:25 pm:

I largely agree that with short term trading FA is mostly irrelevant but can be useful in some circumstances. The FA package I use comes with a lot of peripheral information as well as the usual FA financials. Announcements for example are included and readily accessible.

Re long term my view has always been that trading is about the balance of probabilities and although I start with TA I finally filter my stocks through FA as well. I have no doubt that overall it helps with the balance of probabilities argument and not just for selection and entries but with exit decisions as well from time to time.

So I would be happy to see FA rolled into the long term thread and maybe it would generate a better exchanges on FA factors where it might be useful.

Tony_M

(Message edited by robin on February 05, 2006)

tony_m

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Sunday, February 05, 2006 - 02:51 pm:

Oops, meant to say FA in the first line of the previous post...Tony_M

[ Tony_M's post above corrected to as intended...Robin ]

(Message edited by robin on February 05, 2006)