January 21, 2011

Merging the Fundamentals with the Technicals

Fundamental traders are very different from technical ones.
If one looks at earnings, dividends, management, industry and how sound the business model is. The other one is into charts, patterns, curves, supports and resistance. Each one has it's own advantages and disadvantages. To get the best of both worlds, I recommend doing a hybrid. How?

1. Select stocks based on it's fundamentals
2. Trade those stocks using technical analysis

On the short term, technical analysis almost always helps predicts the direction.
On the long term, companies with sound business fundamentals always rise.

Tip: Never ignore analysis from known providers such as ATR Kim Eng and others. Why? because they hire people just to focus on these things. I specifically mentioned ATR Kim Eng since I follow most of their forecast and it's generally right.

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