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Fundamental Vs Technical (0 viewing) 
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Fundamental Vs Technical

#1685
RL (User)
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7 Months, 2 Weeks ago
 
Hello,
Actually there have been quite a lot of arguements on which is better... but if you ask me, i think both are good methods. it just depends on the user's ­style­ and preference... :)

Anyway, what is the difference between the two? Well, FA looks at balance sheets and annual reports to make their picks.
TA looks at the charts to make their picks.

actually, both have some very different perspective on "expensive" and "cheap"... hence time to buy and when not to buy...

if you were to imagine stock is a product, you might be able to understand these methods better. FA uses annual reports to determine the current and future potential of a company and sets a value for it... for example, by using annual reports, FA defines a value or the price the stocks is worth.... either now or in future (investments). so when the current price is higher than wat they value now or the future potential, they consider it as expensive... but if the current price is below their value, they call it cheap or discounted... so it will mean time to buy... that is why you find investors using FA averaging down...

TA on the other hand do not really focus on the price itself or the potential of the company, but rather on the balance between supply and demand. no matter how good or how bad a company is, there will be a time to buy and time to avoid... TA buys when there is demand for the stocks... or when the demand is starting to exceed the supply... which also means tat the price is going up... so, wat is expensive and what is cheap for TA users? hehe...
Basically, expensive is the price when the demand is getting lower, which is when the price will start to drop... and cheap when the demand starts to pick up... so, TA actually averages up and dont average down (normally). because as i said, it is about supply and demand, when price go down, it means the demand is less, so TA will avoid such stocks...

to sum up, FA values a point or a range of a price tat they think the stock is worth, anything more is expensive and less is cheap...
TA tracks a movement of price, so you can say there is no cheap or expensive, only demand vs supply... buy when there is demand...

So, this is why investors using FA averages down but traders using TA dont...

Regards...
 
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Last Edit: 2008/04/05 17:06 By R L.
 
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Trading using Technical Analysis has its limitations and hence, its Rules and Method of play... Understand, make and follow them...
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#1686
Mr Tee (User)
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7 Months, 2 Weeks ago
 
Indeed, always the argument is around.

But I guess a complementary will do no harm as each will act as adjuvant to the other.

Ultimately, it all depends on one's adopted strategy. Use it as pure or blended, for me, is not a matter at all. The main aim is still, to Make Money from the stock market.
 
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Last Edit: 2008/04/07 11:08 By mrtee.
 
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#1687
RL (User)
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7 Months, 2 Weeks ago
 
hi hi...
Sure, i have heard a few people successfully adapts to the hybrid... actually, like the experts always say, FA tells you which stocks and TA tells you when to buy... :)

Actually, it quite makes sense to compliment both... but for me, i'm still 100% TA.. hehe... :P

after all, it is a matter of ­style­ and preference... :)
 
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Trading using Technical Analysis has its limitations and hence, its Rules and Method of play... Understand, make and follow them...
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#1688
lle (User)
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7 Months, 2 Weeks ago
 
Quote and Unquote from Teng Yeh Yeh: It doesn't matter whether it is black or white cat so long as it can catch the rats, it is a good cat..

So, same thoery applies....FA or TA doesn't matter....so long as you 'catch' the $$$$$$$$ from market.....possibly on every trades...Kekeke.....
 
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#1698
RL (User)
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7 Months, 1 Week ago
 
actually, there are a few methods or should i say "fine print", when it comes to cost averaging, wether it is up or down... and this is particularly true for hybrids (uses both FA and TA)... hehe... but no time to type the details now, maybe next time... but if i forgot, do remind me ya... hehe...

regards
 
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Trading using Technical Analysis has its limitations and hence, its Rules and Method of play... Understand, make and follow them...
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