Saturday, January 23, 2010

Fundamentals or Technicals?

1) For trading technical analyses is more accurate and reasonably predictable. Fundamentals can be overshot in the short term due to momentum and sentiments and liquidity. Finally, however, stock or market has to return to the fundamental status.

2) After you arrive at a decision using technicals, don't invoke fundamentals. Fundamentals are built in the chart patterns and anomalies. When you arrive at a decision using fundamentals, don't be disturbed by technicals and charts. a line can turn 180 degrees in a flash! however, if both fundamentals and technicals are complementing each other, nothing like it!

3) Technicals can't predict fundamental shifts whereas fundamental shifts can bulldoze and drag technicals. Technicals, therefore, are useful only in the short term.

4) Fundamentals demand patience and reward fantastically. Also, they are stress-free. Technicals demand accuracy rather than patience but is not stress-free.

5) Technicals can't predict rise in volumes and coming to life of lifeless scrips. Fundamentals can.

6) If i see an apple falling, i expect it to reach the ground. i can even estimate the approximate point where it may fall and rollover. that is technical analyses. till the fundamentals change (like a monkey catching the apple midair) the apple will fall as per a pattern.

.........................................................................Choose wisely!

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