Why Technical Indicators > NetSparsh - Viral Content you Love & Share

Home
>
Stocks & Mutual Fund
>
Why Technical Indicators

Why Technical Indicators

The fight continues to rage among traders who use technical indicators and those who prefer fundamental information to establish new positions and to exit current positions.

The fundamentalist believe in knowing all the facts about a company such as price earnings ratios, sales growth, product margins, management capabilities, cost of production, cash flow, etc., etc. while the technicians could care less about the latter and want to see sector price trends and rank, the Relative Strength Index, MACD (moving average convergence divergence), stochastics, trend lines, chart patterns and many more esoterically evolved indicators.

Which method is the best?

There is no Holy Grail of trading and what critics of either method forget that it is the trader who adds the final nuance that results in profit or loss. The more years a professional investor has been working his plan the more successful he usually becomes. The unsuccessful ones have long since gone broke and are no longer in the game.

It is somewhat difficult for me to give great credence to fundamentalists as I am a technician and have a very long profitable track record to prove it; however, I do sometimes look at some of fundamentals. It seems that the longer term trader can do well with a fundamental approach because the timing to buy or sell has a lag time. He does not buy the bottom nor sell the top, but who does?

The technical trader will ignore the informational approach with the use of charts and other indicators. Short term traders must be technicians, especially day traders, as there are no fundamentals upon which they can assess their buys and sells.

Technical trading is based on the psychology of the mass of traders that ride upon the hidden values of the changing fundamentals. Charts and other indicators tell the of the long term health of a company, country or commodity as it is shown in the price action. The fundamentalist looks for the reason for a change to buy or sell whereas the technician tries to find the change in the price action to initiate buys and sells.

No matter what a fundamental trader's position he must be very patient. He may have a position on for years. During that same period there will be waves of highs and lows during which he remains constant in his position. The technician may trade the same equity several times buying the low of the wave and selling the high (hopefully). In commodities it is astute trading, but when it is done in stocks and funds it is called timing.

A combination of technical and fundamental methods can give the best results. For the average guy occasional trader I can only caution him to be very careful. Very few intermittent traders ever make money.

A successful trading approach requires commitment. It is a business the same as owning a shoe store or trucking company. You must give it your all.

Like any business you have to work at it.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

In The News:

Investor's Business Daily
Mutual Fund Managers Like US Small Caps, Foreign Stocks
Investor's Business Daily
September's gain by U.S. diversified stock mutual funds was due largely to President Trump unveiling his proposal for corporate tax reform, says Jeremy Javidi, manager of $620 million Columbia Small Cap Value Fund (CSMIX), whose 6.51% return made it ...

Livemint
Mutual funds trim metals, retail holdings, tank up on financial stocks in September
Livemint
Mumbai: Mutual funds flocked to financial stocks in September attracted by their growth prospects even as they sold metal and retail stocks to cash in on the recent rally in these sectors. According to data from Value Research, six out of 10 large-cap ...

Investor's Business Daily
These Leading Stocks Drove August's Top Inflows To Stock Mutual Funds
Investor's Business Daily
Index stock mutual funds as a group got net inflow in August. Actively run stock funds had outflow. The contrast was a $23.5 billion outflow for actively run funds on average vs. a $5 billion inflow for passive funds, according to Morningstar Direct ...

and more »

Investor's Business Daily
Which Sector Dominates New Stock Buys By Top Fund Managers?
Investor's Business Daily
According to the latest list of new buys by top-performing mutual funds, the leading money managers appear to be focusing on building sector and related stocks like homebuilders NVR (NVR), Toll Bros. (TOL) and KB Homes (KBH), as well as construction ...

Investor's Business Daily
Mutual Funds
Investor's Business Daily
Victory RS Small Cap Growth Fund (RSEGX) has been a dominant force among small growth stock funds in 2017. RS Investments chief investment officer Scott Tracy and his team have delivered a stellar performance with a focus on risk-adjusted returns.

and more »

Economic Times
Mutual funds pump $12 billion in equities, outshine FPIs' investment
Economic Times
... that this will provide more clarity to investors and help in ending duplication of mutual fund schemes launched by Asset Management Companies (AMCs). Mutual funds collect money from investors and buy stocks, including IPOs (primary market) and bonds.

and more »

CNNMoney
Millions of Americans are left out of the stock market boom
CNNMoney
In all, just 54% of Americans invest in the market, either through individual stocks, mutual funds, pensions or retirement plans like a 401(k), according to Gallup. That's down 11% since the Great Recession. Dow records don't mean much to about half of ...

and more »

Economic Times
Why arbitrage mutual funds score over debt funds
Economic Times
How do these funds manage to do this? Simple, the fund grabs the arbitrage opportunity that lies in the difference between the cash and future prices of stocks. The fund manager will buy a stock for Rs 1,000 from the cash market, and sell futures of ...

and more »

New York Times
Focused Bets on Growth Propel Three Stock Funds
New York Times
They are also willing to double their bets, holding far fewer stocks than the typical actively managed mutual fund. Cindy J. Starke, manager of the Value Line Larger Companies Focused Fund, said that she invested with high conviction, meaning she holds ...

Reuters.com
US fund investors regain risk appetite as Dow breaches 23000
Reuters.com
And the bullish mood on stocks did little to shake demand for bonds. Taxable-bond funds took in $4 billion for the week, according to Lipper, and the category has posted outflows just three weeks this year. Low risk money-market funds took in $5.1 billion.

Google News

Why Technical Indicators

Stocks & Mutual Fund Stocks & Mutual Fund