Fundamentals and/or/versus Technicals

[Stuey]

Without wanting to take another thread off topic. Plus I think this needs it's own discussion.

I said in that other topic,

"I would like a decent discussion of fundamental v technical analysis here to see where people's opinions are.

I'm very much fundamentals, and being suitably well-read that you know the forward events other market players do not.

There are always the unforeseens of course.

And if enough of the market believe in technicals then that makes them real and impactful too. 

I don't talk about it too much but have done spot trading (minute by minute) and optimising flexible power station despatch so know a bit of what I'm on about. 

My best trading days were when I noticed a time between Christmas and New Year that other traders were obviously following strict risk policy orders. Basically Junior Traders on staff told not to fuck up, just make a quid here or there.

I made £500k for company most days from a couple of evidently arbitraged trades..

...and got fuck all bonus."

Where I have worked in Trading in energy one very clear example of Fundamentals relevance is this.

The European energy market had moved towards LNG 2010-20 and on one of the terminals we could track LNG ship destination. Keeping a log of these and when their port moved from Asia to Europe gave us a two to five day head start on the rest of the market.

It wasn't insider trading as the knowledge was "public", just extremely difficult to find without the appropriate desire or knowledge. 

[JoeDavola]

6 minutes ago, Stuey said:

if enough of the market believe in technicals then that makes them real and impactful too

I see adverts several times a day for Greg Secker's 'simple' currency trading system.

Now of course he can't make me money via following his system, but I wonder if you knew how people like him were telling thousands of people to behave, could you possibly make some money by trading the inverse of that.

So what I'm saying is could you use "normie-level" pop-technical-analysis as a predictor of TA-driven behaviour not to emulate but skim a bit of money off by betting they'll take the bait.

I also think that surely TA nowadays for short term trading has to take into account the account real time sentiment analysis of what is posted across social media about sectors/companies etc...I'm sure someone has built this already but if you monitored the top 1000 most viewed twitter accounts, the top handful of news sites etc....could you correlate what's being posted on them to changes in market behaviour.

[leonardratso]

who doesnt love T&A

Edited September 1, 2023 by leonardratso

[Stuey]

7 hours ago, JoeDavola said:

 

I also think that surely TA nowadays for short term trading has to take into account the account real time sentiment analysis of what is posted across social media about sectors/companies etc...I'm sure someone has built this already but if you monitored the top 1000 most viewed twitter accounts, the top handful of news sites etc....could you correlate what's being posted on them to changes in market behaviour.

People talking their book will never be understood by AI in my opinion.

How can an algorithm truly discern people talking their book versus good advice.

And also the best advice will not be posted on any internet forum.

(Like here. Etc) 

[Frank Hovis]

Fundamentals are all that matters in the long term which suits me with my leaden buy and hold default strategy.

Technical analysis however taps into short term market sentiment, if only because so many people do it, and if you're good at it then you can do very well by rapid buying and selling to keep stacking up the profits.