[86834]

Originally Posted by atto »

Not to really jump into the crossfire, but I would dare to say that this forum has a higher concentration of professionals (who daytrade as their primary source of income) than any other I know of. To respond to how we'd know about trades people are making, because it happens so fast: a number of us enjoy hanging out in the TL chat room (link above in the navigation bar). Several people there, myself included, would fall into the "professional" category, and talk about what we're looking at real time. You're more than welcome to join us and chime in your thoughts (it's most active during US hours, primarily in the morning session).

I personally use zero fundamentals in my day trading (I trade index futures), but I certainly wouldn't knock anyone who does. And no, I don't scalp for two ticks, spread bet, or anything like that. I don't think I'm boxing myself in by limiting myself to the tools I choose, but I could be mistaken. However, it seems to be working fairly decently (to say the least).

Your differing opinions are interesting, though. And I'll let you guys continue...

I agree that there are people on this forum that know what they're doing and are making money, and thats why i like having a browse in my spare time and reading what these people have to say. All you have to do is compare the premium forum to t2w to see that


I didn't mean to come across like i was knocking spread betting or retail trading etc, but i do think people at times do need to take a step back and remember what they're playing with here... the global financial markets. If you're making money then money is money at the end of the day, but to say something along the lines that fundamentals is useless or you don't need to bother with it, in my eyes just makes you look like a plank who really doesn't have a clue (not aimed at you fw, you're the only one on my friend list )

Here's my take on things... When i browse the forums on the internet you have a small handfull of people from these places who are making money, and more power to them, however... 99.9999% of people on these forums, including some of those who are making money don't really have a clue whats going on behind closed doors in the city eg prop firms, investments banks etc

I'm not implying i know everything, far from it, but as someone who is a professional trader, and has traded in the city, and now runs their own private fund, i must admit it does irritate me when i see someone saying 'bah all you need is a chart, fundementals is a load of bollox' because the only thing that's a load of bollox is that statement.

In the global financial markets there are all sorts and every sorts going down, from basic t/a to mind bogling algorithms and financial models that will blow yours and my mind into the next decade. Investment banks spend millions upon millions upon millions researching fundamentals and incorporating them into their trading strats, then invest billions upon billions based on them. That's fact wether you like it or not. People need to realise that we're in their backyard, and sitting there saying fundamentals have no place or whatever, is just plain ignorant.

Yeah you can make money using just a chart, but to me good solid trading is being able to adapt quickly and being able to adjust to anything the market throws at you and, understanding the underlying forces that are pulling the levers will help you with this goal. Fundamentals play a massive role.

Look at all them daytraders in the dotcom boom using candlestick patterns and thought that's all they needed to know, then the pop came and they all went flat on their face. Most of them are working crappy average jobs now in retail.... says it all.....

[OAC]

Frankly, you guys are not making too much sense here. Is it me or did one of you guys had too much to drink on New Year's Eve ?

[atto]

Ah, okay, I'll bite . Saying fundamentals are useless is far different from saying that fundamentals are not necessary. You could disprove the former adequately with consistent returns gained from fundamental analysis. However, you couldn't prove the necessity of fundamentals by using them. Rather, to prove they're necessary, you'd have to fail at every other methodology that doesn't use them. So you see the burden of proof here is far more complex than arguing how well they work, or how complicated the financial system is, or how you can play news events.

On the contrary, I'd argue that they aren't necessary, because myself and others (with more weight to "others", as I'm just one person) profit consistently without them. Therefore, we both arrive at the same place: ample profits derived from our methodologies; you from a primarily fundamental approach, me from a technical approach. You don't hear the Oil billionaires arguing the real estate billionaires that their methods for gaining fortune were better. Therefore, if we can get past extremes of "fundamentals don't work" (which of course they can), or "technicals can't work without fundamentals" (likewise), why does it matter?

Yeah you can make money using just a chart, but to me good solid trading is being able to adapt quickly and being able to adjust to anything the market throws at you...

Then quite possibly our definitions of "solid trading" differ... I attempt to maximize profits per time invested.

[86834]

Originally Posted by atto »

Ah, okay, I'll bite . Saying fundamentals are useless is far different from saying that fundamentals are not necessary. You could disprove the former adequately with consistent returns gained from fundamental analysis. However, you couldn't prove the necessity of fundamentals by using them. Rather, to prove they're necessary, you'd have to fail at every other methodology that doesn't use them. So you see the burden of proof here is far more complex than arguing how well they work, or how complicated the financial system is, or how you can play news events.

On the contrary, I'd argue that they aren't necessary, because myself and others (with more weight to "others", as I'm just one person) profit consistently without them. Therefore, we both arrive at the same place: ample profits derived from our methodologies; you from a primarily fundamental approach, me from a technical approach. You don't hear the Oil billionaires arguing the real estate billionaires that their methods for gaining fortune were better. Therefore, if we can get past extremes of "fundamentals don't work" (which of course they can), or "technicals can't work without fundamentals" (likewise), why does it matter?

Then quite possibly our definitions of "solid trading" differ... I attempt to maximize profits per time invested.

i think you completely missed the point of my post i'm not saying i'm coming from a fundamental approach, rather than technical approach as i use both in equal amounts. In your example of oil and property if both work why not combine the two to make more money and have a more balanced portfolio, rather banging all your eggs in one basket (what i interperated fw as saying), so when the property market goes pop and you loose the property game (all them dotcom day traders who thought they were masters of the universe with their candle hooks) you still have your oil billions....

The way i took this thread was someone saying fundementals are basically a load of crap, prove me wrong if you think otherwise. That's the bit where i put my 2 cents in.

Like i say, i'm not one to limit myself, anything that i can use to give me an edge i will, and everything has a place in this game. For example if there's no market moving figures out on a certain day in the fixed income market then i'm trading from a very technical point of view. If there are market moving figures that are out of line i'm gonna hit the market on the bid/offer if i feel it is right to do so and profit from them large quick spikes. If the fundamentals are pointing the market in an overall direction then i will take this into considersion when spreading bonds

[86834]

Then quite possibly our definitions of "solid trading" differ... I attempt to maximize profits per time invested.

So do i.... for example by bringing fundementals into my trading alongside technicals i'm maximizing profits per time invested because i'm taking advantage of more opporunites available in the market by using both techs and fundamentals.... rather than saying all i needs is techs

[atto]

The horse is on its dying breath, so I'll make my last remark, and let it be. I don't think anyone has said that fundamentals are pointless, but rather not necessary -- to which I'd agree, as it seems you would as well (since it's possible to trade purely technically). My previous post wasn't meaning to misrepresent what you're arguing either, as I know you use both.

If seeking edge after edge to maximize every situation is one's goal, then he may want to thoroughly investigate fundamentals. However, that's not really my goal. My point about the billionaires had little to do with industry: at the end of the day, what works for you and others, works; likewise, what works for me and others, works.

Yes, if, hypothetically, you knew -- secretly -- that the Fed would cut rates 50 basis points below expectations, that would be fundamental knowledge not priced in. However, on a more macro scale (I'd argue anything past an initial shock of a number), I do think trading decisions can be performed better from the charts.

[86834]

Originally Posted by atto »

The horse is on its dying breath, so I'll make my last remark, and let it be. I don't think anyone has said that fundamentals are pointless, but rather not necessary -- to which I'd agree, as it seems you would as well (since it's possible to trade purely technically). My previous post wasn't meaning to misrepresent what you're arguing either, as I know you use both.

If seeking edge after edge to maximize every situation is one's goal, then he may want to thoroughly investigate fundamentals. However, that's not really my goal. My point about the billionaires had little to do with industry: at the end of the day, what works for you and others, works; likewise, what works for me and others, works.

Yes, if, hypothetically, you knew -- secretly -- that the Fed would cut rates 50 basis points below expectations, that would be fundamental knowledge not priced in. However, on a more macro scale (I'd argue anything past an initial shock of a number), I do think trading decisions can be performed better from the charts.

I know the point about billionaires had nothing to do with industry, i was just using the example you gave for the 'putting you're eggs in basket'

I think on the macro scale fundementals are most important. I'll start another thread on it when i get up because it will stray off the original topic.

It's 6:50am here and i haven't been to sleep yet and i've already broken my new year resolution by smoking a 20 deck...

[firewalker]

Originally Posted by 86834 »

The way i took this thread was someone saying fundementals are basically a load of crap, prove me wrong if you think otherwise. That's the bit where i put my 2 cents in.

Just for the record, I don't recall saying fundamentals are crap... all that was said is basically in the thread title: you don't need funnymentals to trade. You don't need MA's to trade, but some manage to do fine with them. Does that mean MA's help people become a better trader? Perhaps for some, but would you say it's a necessary requirement to be a profitable trader? Nope.

Honestly, from my point of view (which is an intraday trading one), I'd really like to see how anyone can improve their results by using a fundamental approach.

I am not putting my head in the sand by choosing to be blind to anything that deviates from my opinion. On the contrary, I am very open to suggestions, but only two weeks ago we had some people around here, claiming that FA are the tools of the professional and how they ignoring it is being a fool etc etc... Unfortunately when it comes down to actually pulling the trigger, none of that information helped.

Originally Posted by 86834 »

How many professional traders are gonna be posting on internet forum during market hours? Also for these types of trades that i mentioned above, it's impossible to show on a forum live, because by nature they tend to be either a massive spike that retraces just as fast, or market direction will change very rapidly leaving the trader who uses just a bar chart behind, and if you didn't know that there was a figure out, how are you gonna explain, let alone trade these moves?

As for the live trading part: several people have been calling where to enter and where to look for an exit before they put on a trade. The market is not moving 100 points in 1 minute, and it only takes 3 seconds to type "short here" or "long now". The chatroom is ideal for these kind of things. Many traders have been doing it and indeed explaining their trades. As for the rest of the comments, atto has done a pretty good job of answering those so I'll leave it at that.

One last thing example regarding news:

Last Tuesday consumer confidence showed a record low of 38, well below the expectation of 45 of economists surveyed. Yet the market somehow choose to ignore that, hold steady and start moving upwards. How was that already priced in? Hypothetically speaking, if you know it was going to be that bad, wouldn't you want short the market before the number comes out? Whatever explanation people like to give for this, the fact is price was trading near or at support and there were enough buyers around that level to keep price from falling. There might be a dozen other approaches, but a wise man once said "All other things being equal, the simplest solution is the best." Which is why couple of min after the release I took a long trade (ES 872). I hadn't even looked at the CC number, I just traded what I saw instead and I mentioned a potential price target of 886. Seven hours later price eventually hit 886.25 and the high of day was 888.75.

Another example: on Wednesday, dbphoenix mentioned there the odds where higher that the NQ would travel all the way to 1225 after reacting off 1200 early in the day. The high of day turned out to be 1224.75. That makes me wonder, what extra benefit could FA offer above this?

PS: as for the chart you attached, it's too small to really see anything on it...