those daytraders that don't work on the Fundamentals, are going to be blown out sooner or later (usually, sooner)!
I agree that Fundamentals can be critical for determining the long-term outlook for the stock (i.e. 1 day to years). However, for the extremely strict daytrader that closes out all positions before the end of the day, I believe that fundamentals are not especially useful. Perhaps knowledge of the fundamentals could help you avoid stocks that might have a very untimely halt for a news announcement, etc. But, typically, major news affecting stocks do not occur while the market is open.
In addition, any daytrader who can be "blown out" by any single trade is not practicing good money management (or perhaps trade a smaller than ideal account size). My overnight trades have been very successful this year, but don't ever involve more than 10-30% of my account size. If the stock drops in half, I have only lost a small part of my account, essentially a few weeks gains.
I am open to the realization that I'm overlooking some key value of fundamentals for the daytrader. How do you use fundamentals? Could you give us some examples of when knowledge of the fundamentals modified your trading decisions and as a result, "saved your butt", so to speak?
Thanks,
-Eric |
