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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: JavaAdict who wrote (947)	6/17/1999 11:29:00 PM
From: Teresa Lo	Read Replies (3) \| Respond to of 18137

I think you hit the nail on the head. FA is good, but market action day to day is not dependent on FA alone. Distill things into a simple paradigm. The price is a function of the battle between the buyers and the sellers. What motivates the buyers and the sellers is the same thing - profit. If doesn't matter what is the catalyst either, fundamentals or technicals, since profit is the motive. You are also right in saying that so much is speculation. In fact, it's 100% speculation. I argue that even the buy and hold mantra is speculation - because people are buying and holding on the premise that market always goes up in the long term. That premise is not a proven fact (I'm going to catch flak for this) and even if it were, will the basket of stocks someone is holding go up in the long run ad infinitum? And even so, someone who wants to become a trader cannot keep buying and buying. He would then need a job to supply the cash, instead of taking it out of the market on a continual basis. Advice given to me - 1. Don't try to catch the falling knife. In a big downtrend, do not try to pick a bottom. Sell every rally until it won't go down anymore. The market will tell you when by making higher lows and higher highs. There is plenty of time to get aboard on the long side. 2. Don't try to pick tops. The market will tell you the same. Buy every dip until it no longer makes higher highs and higher lows. There is plenty of time to get short. 3. Stay out of the chop. Every method you use will go toward finding periods of chop to stay out of - that's why they call it CHOP - and also finding emerging trends, cause that's where all the money is. 4. Do not stand in the way of the speeding train. This one is self evident, and relates to points 1 and 2. So basically, you need to learn a little simple TA, only what's necessary to assess the battle of the buyers and sellers. Things like support, resistance, trends, how to measure a trend. That's about it.