i read this forum out of interest and i find some of the comments made by those who support FA are just hilarious. i did use FA before, but i find it very, very unreliable perhaps i am not good at accounting. but i really think these comments can only come from new investors or graduates who have learnt everything from books but they have ignore the practicality side of trading. how can one day trades successfully by just reading fundamental which published 4 times a year and also how can one trades without using stop losses, even big dudes at investment houses use stop losses (roughly remember that happened traders at goldman sachs when ftse fell thru 3860 in 2002 "not sure the exact date" ).
"but i really think these comments can only come from new investors or graduates who have learnt everything from books but they have ignore the practicality side of trading"...wrong and your comments tell me everything I need to know about where you are at with your knowledge journey...keep on the road though as was stated above..we all have to start somewhere..but don't overdo your hilarity..the jokes self inflicted..
chump said:
o sorry i should not have made accusation, and i apologise for that, not all graduates and new investors are unwilling to learn, and we all need to start somewhere, i know that. but starting somewhere is not good enough is it? we just need to learn from mistakes on the way. i am still learning from mine and other traders mistake after 8 year in the market. can can some one answer me how can one daytrades by just using FA?
CharlieChan,
There is no such thing as always being right in the markets but there are ways of ensuring that one does not take unnecessary hits on trades. As for companies going bust, I do not know what kind of shares you trade but it does not seem that you trade 'boring' companies' shares, you probably engage in the high octane trades or flavour of the month. Unfortunately, I cannot handle roller coaster rides so I stick with the slow and steady movers.
When did the last FTSE constituent go bust? What type of business was it? Did it have a major shareholder who was also the chairman/CEO?
What is wrong with capital being tied up for long periods of time? Surely it is better to engage in a few trades that are profitable rather than multiple trades that end in a net loss. Why do 20 trades to make £1,000 when 2 or 3 can yield the same amount with less risk?
The average American Mutual Fund is up 0.3% year to date, that should tell its own story. A large number of hedge funds are showing losses; 90% or more of individual traders have lost money. Why would anyone want to have performance stats like these? You can choose to be as active as you wish and take on unquantifiable risks but others may well choose to seek slow and steady returns.
Khi,
The humorous side of the posts make for easy reading (hopefully) but it seems that the joke is on you. You will probably find that those you accuse of learning everything from books have fewer books than you and have not attended any get rich quick courses. Day trading as most would accept is gambling regardless of the analysis that is used, whilst there are a few very good day traders on these boards, there are too many losers. That in itself should prove that it is not an easy way to make money in the markets.
There is no such thing as always being right in the markets but there are ways of ensuring that one does not take unnecessary hits on trades. As for companies going bust, I do not know what kind of shares you trade but it does not seem that you trade 'boring' companies' shares, you probably engage in the high octane trades or flavour of the month. Unfortunately, I cannot handle roller coaster rides so I stick with the slow and steady movers.
When did the last FTSE constituent go bust? What type of business was it? Did it have a major shareholder who was also the chairman/CEO?
What is wrong with capital being tied up for long periods of time? Surely it is better to engage in a few trades that are profitable rather than multiple trades that end in a net loss. Why do 20 trades to make £1,000 when 2 or 3 can yield the same amount with less risk?
The average American Mutual Fund is up 0.3% year to date, that should tell its own story. A large number of hedge funds are showing losses; 90% or more of individual traders have lost money. Why would anyone want to have performance stats like these? You can choose to be as active as you wish and take on unquantifiable risks but others may well choose to seek slow and steady returns.
Khi,
The humorous side of the posts make for easy reading (hopefully) but it seems that the joke is on you. You will probably find that those you accuse of learning everything from books have fewer books than you and have not attended any get rich quick courses. Day trading as most would accept is gambling regardless of the analysis that is used, whilst there are a few very good day traders on these boards, there are too many losers. That in itself should prove that it is not an easy way to make money in the markets.
charliechan
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khi said:
exactly.
fundamentals have their place, as does technical analysis.
for the long term trader, both are important. only taking one into consideration is like crossing the road without listening, or without seeing. to minimise risk, we should use both our ears and our eyes.
ta is the vision - you see what price is up to.
fa is the hearing - you hear the roumors they want you to hear.
for the shorter term trader, fa decreases in value as genuine demand/supply becomes less apparent and the trader has to deal with manipulation more than genuine demand/supply. however the manipulation is of course mostly with the long term frame in mind.
i am no accountant, but even i know there are several ways (accounting models) a company or government can use to publish their reports. ie they can chose how they decide to display their information in order to attract investment funds.
i see our friend with the fancy hat is quiet. i hope he is learning something valuable (this time) for all our sakes!
charliechan
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LION63 said:
lol
i have the fullest respect for your choice of asset class and am glad to see you have the common sense to chose one that suits your personality.
mostly what you say here is true. slow and steady accumulation of profit is equally important to a day trader imo as the long term investor. consistency is key. you are also right in saying 90% of daytraders dont make it. but the same can be said for most small business ventures. the majority fold in the first year. this has nothing to do with the method or model mostly, but everything to do with attitude. i wouldnt be surprised if 80-90% of buy & hold speculators went bust - it just takes them longer, and there is no guarantee that they will build much wealth in the mean time.
my point was though that you should never say never!
as for ftse companies going bust - well it does happen.
mg rover?
equitable liffe?
no idea if they were in the 100, but big 'blue chip' household names never the less that came to a sticky end.
CharlieChan,
If you are going to cite examples in order to buttress any argument/point that you are making please ensure that you have your facts right. You persist in trying to shoot down other views without putting any tangible alternatives, that is wrong and it borders on being criminal from a new trader's perspective when your posts are littered with inaccuracies.
Firstly,
MG Rover was a privately held company and nobody could trade in the shares. Based on that, how would it have been possible for a trader to lose any money?
Secondly,
Equitable Life was a mutual insurer that was owned by the members (policyholders) and never had trade able shares. Once again, how can you lose money trading the untradeable?
We are in danger of venturing into Fairyland.
If you are going to cite examples in order to buttress any argument/point that you are making please ensure that you have your facts right. You persist in trying to shoot down other views without putting any tangible alternatives, that is wrong and it borders on being criminal from a new trader's perspective when your posts are littered with inaccuracies.
Firstly,
MG Rover was a privately held company and nobody could trade in the shares. Based on that, how would it have been possible for a trader to lose any money?
Secondly,
Equitable Life was a mutual insurer that was owned by the members (policyholders) and never had trade able shares. Once again, how can you lose money trading the untradeable?
We are in danger of venturing into Fairyland.
dbphoenix
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LION63 said:
LION63 said:
I suggest that telling a new trader that all he has to do is determine "fair value", then "sit back and wait", while not necessarily being "criminal", does leave that new trader vulnerable to considerable loss. Just ask those who trusted The Motley Fools.
But hey . . .
dbphoenix,
As an alternative to doing proper research; having a proper method that reduces losses to a bare minimum; having patience before, after and during a trade; not listening to the maddening crowd, sound money management and reducing the frequency of trading amongst other things; what do you propose a newcomer do?
If advocating the above is deemed as being irresponsible and verges on being criminal then I am guilty as charged. I have no pity for those who lost their accounts during the tech meltdown and they certainly did not trade on a fundamental basis or seek steady returns.
As an alternative to doing proper research; having a proper method that reduces losses to a bare minimum; having patience before, after and during a trade; not listening to the maddening crowd, sound money management and reducing the frequency of trading amongst other things; what do you propose a newcomer do?
If advocating the above is deemed as being irresponsible and verges on being criminal then I am guilty as charged. I have no pity for those who lost their accounts during the tech meltdown and they certainly did not trade on a fundamental basis or seek steady returns.
barjon
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Lion
How do you define "fair value"?
However you define it, would you sell a share at a loss if a change in the fundamentals means that you no longer consider it undervalued (GE becoming Marconi becoming
for example)?
Isn't a decision to sell if those circumstances arise similar to a stoploss, albeit based on fundamentals rather than price?
Or are you suggesting that you should never sell at a loss?
jon
How do you define "fair value"?
However you define it, would you sell a share at a loss if a change in the fundamentals means that you no longer consider it undervalued (GE becoming Marconi becoming
for example)?Isn't a decision to sell if those circumstances arise similar to a stoploss, albeit based on fundamentals rather than price?
Or are you suggesting that you should never sell at a loss?
jon
I think you will find there is a stop loss and that it is based on a change in the fundamental
'fair value' calc...logically it has to be...if 'fair value' is the entry trigger then ipso facto it is also the rational that no longer applies and triggers the exit (stop loss or stop profit)
'fair value' calc...logically it has to be...if 'fair value' is the entry trigger then ipso facto it is also the rational that no longer applies and triggers the exit (stop loss or stop profit)
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