Forum Archive Index - October 2001

[Phaedrus <Phaedrus@techemail.com>]

Cullen150,
           The whole fundamental/technical analysis issue is really about what 
your intentions are. If you intend to buy and hold, fundamental analysis is the 
most logical stock selection method. If you want to trade, some form of 
technical analysis is the obvious choice. The two approaches are not mutually 
exclusive. For example, I will only trade stocks with good fundamentals, using 
nothing but technical analysis to make all trading decisions. 
  If a stock is rising and continues to rise in a very steady manner, no 
trading system will outperform simply buying and holding. This is quite 
uncommon, and in any event, all trends end sooner or later.
  Buying FRU at the issue price of $1.50 and holding on through thick and thin 
would have seen a gain of 58% in 18 months. 
  Frucor has been a particularly volatile stock, though, and as such has 
offered excellent trading opportunities. A medium-term trend trader would have 
made 4 trades in 18 months, and, if profits were compounded, would have just on 
tripled their money in the same period, while also running less risk. I realise 
that this trading frequency would not suit everybody, but one trade every 4 - 5 
months is hardly frenetic.
                Phaedrus.

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