Technical analysis, financial analysis or both?

Discussion in 'Ask any question!' started by Husker, Jan 21, 2020.

?

What is your method

  1. Technical analysis

    50.0%
  2. Financial analysis

    50.0%
  3. Both

    0 vote(s)
    0.0%
Multiple votes are allowed.
  1. Husker

    Husker Member

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    Thought I would start a thread for my own personal learning on where the emphasis is amongst the traders on the site. I've read many posts where financial analysis isn't a favorite when looking at a possible investments due to reasons I don't understand. On the contrary it seems as though a large majority of the folks here, if not all, rely purely on technical analysis. Thank you for your insight.
     
  2. T0rm3nted

    T0rm3nted Moderator
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    A lot of the guys in the investment side rely on the fundamentals, but a lot of short term traders are only on technical. I usually only hold onto a trade for a few weeks to a few months. Whatever style works for you, do it. There are multiple long-term investors on this site though. @WXYZ @TomB16, @Gray Wolf are all long-term investors. Majority of the rest are traders (at least as far as I've noticed). Don't let anyone tell you which way is right, just do what works FOR YOU. We all have different mindsets, available time, risk management, etc.
     
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  3. TomB16

    TomB16 Well-Known Member

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    Long term snob here.

    A lot of what I do is financial analysis. I also look at other factors. Basically, I do what I feel a competent business man would do if he were buying a local, unlisted, business.

    Done properly, it is a lot of work for each business. It's so much work, it limits my diversification. I can only track about ten companies in full detail and I keep an less rigorous eye on about twenty more.

    I can see why so few people do it. The work isn't difficult but it requires patience and time. It also requires a fundamental belief in business and commerce on a level that seems to be rare.
     
  4. Husker

    Husker Member

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    Ok, so the tools used would really depend on what type of trading your going to do. If I were to gravitate towards say swing trading along with value trading my emphasis should be towards more of a technical approach. Do others have a couple of different trading styles or is that too much to consume?
     
  5. TomB16

    TomB16 Well-Known Member

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    I've never heard of value trading. I've always viewed value as part of investing.

    If you plan to buy and sell stock with a higher frequency than five year hold, that makes you a trader and likely to be more interested in technical analysis.

    An investor wants to own businesses. A trader sees stock quotes as an ocean of money to surf on.

    There are a lot of trading styles and techniques. Many are represented on this site.

    I won't list them but they can easily be found in the trade journal forum. That forum has a lot of interesting content.
     
    T0rm3nted likes this.
  6. Husker

    Husker Member

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    Thank you TomB16, I got those terms from a Schwab article I read. I'm a seasonal worker so there are times when I have significant down time and times when I'm 6 days a week on the job and this is weighing on what approach to take for my near term learning process. As an example, I'm struggling with using a screener and which types of filters to use, just basic stuff. I've read that everyone is a little different with filters but it would seem to me that I would need to narrow the scope on my style of trading to determine filters I should play with.. My interests at the moment are short (not day trading) to medium term trading, does that mean I can pretty much throw financial out the window or are there a few that I should verify regardless of my trading style?

    Really appreciate the help
     
  7. TomB16

    TomB16 Well-Known Member

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    You don't have to throw anything away or you can throw everything away. You don't have to do anything.

    Keep in mind, a lot of people will tell you they are the smartest, most successful person on this site. Money attracts weapons grade ignorance. No one knows what anyone else is worth or how we have performed.

    You don't have to be all that smart to be successful. I suggest you find something you believe in and work it. It probably won't be any one specific approach.

    It's your money. Be free and live your best life.
     
  8. Zachary Kaspar

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    Husker
    This is just my opinion but I think your best way to play the market is what works best for you. I personally trade on technical analysis. That is I trade! I do not hold shares in companies for extended periods of time.
    I use TA to determine my entry and exits on a short term basis. I think the longest I have ever held something in this account is 2 weeks. And I tend to have long periods of time when I have no position open in this account. I could go weeks or months and never see a setup that makes me want to trade.

    With that being said I also invest. And I maintain a second account specifically for investments. Now with that investment account I look at certain things.
    1. How long has a company been in business?
    2. Has that company proven itself as a company that will potentially be here 20 years from now?(Ford, Exxon Mobil, etc.)
    3. Does that company pay dividens?& how often?
    4. How many shares can I purchase with x amount of dollars that I have at the particular time I am loking to invest?

    These 4 questions tend to be my go to for investing and after I purchase those shares I forget that I have them and at the end of the year I open the account and take any dividend I have received and reinvest it into the same companies or new companies. But the point in investing is to hold shares. Now if the entire market turns bearish or we move into a recession I may sell out of the majority of those shares. That is simply my investing strategy. I have recently been looking at the companies that pay dividends on a monthly basis but I am yet to commit to any of that.

    I also have a 3rd account that holds my 401k and other savings investments and I let that company maintain those funds. For retirement. It also has the most funds in it. And grows throughout the year as I put more money in it. And then I simply decide what % of the new funds I want to delegate to what type of yield.

    Not sure if any of that makes sense or if it is even the right way to play the market but if all else fails I still have a blue colar job to keep my family fed.
     
  9. Husker

    Husker Member

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    Thank you all for the great advice, chugging along and actually made some money. So much to learn.
     
  10. ChrisDouthit

    ChrisDouthit Member

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    Hi Zachary, I would agree that would ever method the trader uses to beat the market and it works for is the best method. There’s an unlimited amount of strategies out there, whatever works for you, is the one you should navigate to.
     

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