Fundamental and Technical analysis in Tandom

sh50

Active Member
#1
I have come across several traders who proudly claim that their system of trading is the best(Day,swing, position) and should be applied by everybody which is against the basic tenets of practical psychology that each has to decide for himself or herself what works for him.

On a major scale, there is always a clash between Fumdamental v/s Technical Analysis. At the first investor camp in Delhi, both types of analysts were taking potshots at one another. Even if you google for them a majority of results are "Fundamental v/s Technical" Analysis. Many traders consider fundamentals as untouchables and vice-versa though in theory it is said that fundamentals tell you what to buy and technicals tell you when to buy. However the confrontations are like Indo-pak conflict.

I have never understood why they cant operate in tandem as explained in Van Thorpe's classic "Trade your way to financial freedom"

"Almost all traders mistakenly assume that they must be either fundamentalists who rely solely on demand-supply analysis or technicians who ignore fundamentals entirely and make their decisions based solely on price action. If you have two or more good ideas, you will almost certaiinly be better off if you do them all rather than falling into the either or trap."

Interesting links:-

http://www.investors.com/editorial/...4&status=article&id=138491850727804&secure=20

http://moneycentral.msn.com/content/Investing/Powertools/P38974.asp

http://www.confirmatoryanalysis.com/

This is the first time I have seen both being presented like this

http://www.paritech.com.au/AU/products/software/marketscan.asp




There is a consultant in Delhi who tries to follow the techno-funda approach but otherwise they are in conflict. Just as a company has a product, that has to be marketed and the marketing dynamics maybe completely different from the inherent characteristics of the product which can only be observed by trends. It is not necessary that just because a product is deemed good, it will automatically do well. It depends on market conditions and several other factors. Why should there be a conflict? Only for day or swing traders perhaps, fundamental are irrelevant. Otherwise to my mind, they are as close as the low of a bar and a trendline or should I say would look as good together as Shahrukh Khan and Kajol do on screen( Song- Janam janam ka saath hai tumhara, hamara, tumhara hamara...)
 
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