Price Action Trading or Fundamental Analysis? Which is easier

Discussion in 'Trading' started by easymon1, Feb 11, 2023.

  1. Good Morning Scataphagos,

    I agree with you 100%. FA is so stressful. TA Price, real time and true.
     
    #11     Feb 12, 2023
  2. easymon1

    easymon1

    What's your take on BOIL intraday 30m and 5m chart?
     
    #12     Feb 12, 2023
  3. I don't have intraday data... while it's generally a bad idea to "buy stocks in a strong down trend".... one might make a "punt" on NG with a stop below recent lows.

    We're coming out of the seasonally strong period for NG (prices front-run temperatures and expected gas demand)... but it might be a good speculation to accumulate cheap shares*. They may not rebound until NEXT seasonal strength in the fall however. Probably better to buy non-leveraged shares at this time if making this play. The decay costs of leverage could make things much worse over the next 6-8 months.

    Personally, I think this one to keep an eye on.

    *One argument favoring this play is for taxes. You may own the shares for months without much going on, but next fall NATGAS likely has a strong seasonal pop. You might be able to take profits as "long term capital gains" and save on the taxes... FWIW
     
    Last edited: Feb 12, 2023
    #13     Feb 12, 2023
    proftradingjourney likes this.
  4. taowave

    taowave

    LOL @ which one is easier....

    At the top of the Equity food chain,there are the Derivative guys and Fundamental guys who actually have some understanding of math and finance/accounting..Throw Converts in there for shits and giggles

    At the very bottom,you will find the Price action crowd who are adept at taking crayons to a chart and boasting of returns that major hedge fund operators can only dream of..
     
    #14     Feb 12, 2023
  5. TheDawn

    TheDawn

    I think they are equally difficult. With FA, you can be right but you just don't know how the market is going to react to it. The market can react in the direction corresponding to the fundamental, or not move at all or even move in the opposite direction of what the fundamental suggests.

    But with TA, the same difficulty lies. You might see on the technical analysis has indicated that the it has changed from buying to selling but you won't know that for sure until it's really gone into selling. It could've gone into a bear trap or consolidation. You would never know until from hindsight.
     
    #15     Feb 13, 2023
  6. Actually you do know... for sure... when the market has changed from buying to selling and vice versa in the short term.... which is proper for trading. What you don't know is how far will it go and how long will it last. You have to play that by ear.
     
    #16     Feb 13, 2023
    Tradess0610 and SimpleMeLike like this.
  7. TheDawn

    TheDawn

    Ok so you trade bear/bull traps or consolidations as reversals as well, just small reversals I guess? Ok...
     
    #17     Feb 13, 2023
    Scataphagos likes this.
  8. Fundamental analysis requires more work than technical analysis. However, to outperform using either or both strategies, one still needs situational awareness or at least a well tested stat-arb type of combined strategy. By the way, I recall Warren Buffet saying his team studied technical analysis in depth and found no edge, including using equities from Berkshire's own portfolio.

    Technical analysis alone is not enough to reliably outperform, in my opinion. Need to understand tick action at least. Besides, various time frames often show conflicting technical signals.

    Anybody up for a discussion of "Situational awareness" or "Statistic" based edges?
     
    #18     Feb 13, 2023
  9. Yes, me.
     
    #19     Feb 13, 2023
    murray t turtle likes this.
  10. KGTrader4

    KGTrader4

    A real question might be, how much fundamental analysis do you want to do before taking a trade.
    This relates to the thread I started yesterday .

    https://www.elitetrader.com/et/threads/ta-vs-fa.372615/

    Personally, if I find a chart I like, and based on the chart it looks good, I then mostly just want to know what’s the earnings and revenue growth rate (past and projected). I look at the forward PE but growth rate is more important to me.
     
    #20     Feb 13, 2023