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This is why I don't.........


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This is why I don't.........

  #1 (permalink)
Eugene, Or. USA
 
 
Posts: 18 since Sep 2014

This is why I don't.........

This is why I don't listen to the news or put any trust in fundamentals...........



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  #3 (permalink)
Legendary Market Wizard
Portland, OR
 
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Massive l's Avatar
 
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Yep, exactly.

Off topic but I see you're from Eugene. How about them Ducks?
Went to the Michigan State game...it was awesome.

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  #4 (permalink)
Buffalo, NY
 
 
Posts: 64 since Jul 2014
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Noise != fundamentals

Ducks and PAC 10 are always overrated because of the natural bias of reporters on the west coast.

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  #5 (permalink)
Eugene, Or. USA
 
 
Posts: 18 since Sep 2014


Massive l View Post
Yep, exactly.

Off topic but I see you're from Eugene. How about them Ducks?
Went to the Michigan State game...it was awesome.

I never really cared much for team sports or watching sports for that matter.........

I trade technicals and price. Tech can get just as convoluted as funnymentals so I tend to keep things simple.
I don't get into elliot or gann or astrology..... just simple price momentum and probabilities.

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  #6 (permalink)
Prince George BC Canada
 
Experience: Advanced
Platform: IBs TWS
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Trading: Stocks
 
deaddog's Avatar
 
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I have this quote by Mark Cuban displayed in my office to remind me to ignore what ever everyone else knows and focus on price action.


Quoting 
Stocks don’t go up because companies do well or do poorly. Stocks go up and down depending on supply and demand. If a stock is marketed well enough to create more demand from buyers than there are sellers, the stock will go up. What about fundamentals? Fundamentals is a word invented by sellers to find buyers.

Price/earnings ratios, price/sales, the present value of future cash flows, pick one. Fundamentals are merely metrics created to help stockbrokers sell stocks, and to give the buyers reassurance when buying stocks. Even the way profits are calculated is manipulated to give confidence to buyers.

I also like this one by John Murphy.
Quoting 
You can talk all you want about what a stock should be doing or why it isn't doing what it should be doing. You can talk about inflation, interest rates, earnings, and investor expectations. Ultimately, however, it comes down to the picture. Is the stock going up or down? Knowing the reasons behind a stock's movement is interesting, but not critical. If your stock goes up on a given day, they won't take your money away from you if you don't know why it went up. And if you can explain why it went down, they won't give you back your lost money.


When you talk you are only repeating what you already know. When you listen you might learn something new
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  #7 (permalink)
Scottsdale
 
 
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deaddog View Post
I have this quote by Mark Cuban displayed in my office to remind me to ignore what ever everyone else knows and focus on price action.

That Cuban quote is pure wisdom. My whole trading ideology is based on supply/demand of shares and he pretty much confirms everything I've ever felt were sneaky about fundamentals and how the public reacts to them.

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  #8 (permalink)
Prince George BC Canada
 
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deaddog's Avatar
 
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I have seen time and again where traders will fall back to fundamentals when their technical analysis signals that they should exit a trade.

Changing a trade into an investment is a rationalization for not realizing a loss.

I like to trade stocks with stellar fundamentals because I want buyers on the other side of the trade when I decide to exit.

When you talk you are only repeating what you already know. When you listen you might learn something new
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  #9 (permalink)
Buffalo, NY
 
 
Posts: 64 since Jul 2014
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That Murphy quote is exactly what someone who sells chart books would say. Sure, it is better to have a crystal ball than to look at financial information. Only a fool would disagree with that, the problem is a crystal ball is the tool of charlatans.

The longer I have been around the markets the more obvious it is that of course fundamentals matter. Pricing forward the fundamentals is exactly what markets do and what you help to accomplish by trading. Don't confuse that with trying to generate future trading signals by looking at stale quarterly statement data that was priced in 2 months ago. Of course that doesn't matter or work but I just don't see the value in dissociating things to where trading is just mouse clicking.
Not to mention to say something like the business cycle doesn't matter is flat out wrong unless you have only traded through less than half of one.

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  #10 (permalink)
Prince George BC Canada
 
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NoiseTrader716 View Post

I just don't see the value in dissociating things to where trading is just mouse clicking.


Not to mention to say something like the business cycle doesn't matter is flat out wrong unless you have only traded through less than half of one.

The closer you get to trading being a mouse clicking game you take a lot of the emotion out of the process.

In the short term you are trading on other traders perception of the fundamentals. I don't have to know why other traders are buying or selling. There is no way I can know. All I have to see is whether there is more supply than demand or vise versa. Price tells you what the market is doing. If you need to know why then you can use the fundamentals to explain the price movement. But in reality price moves because of supply and demand.

The business cycle is of little use to a short term trader.

When you talk you are only repeating what you already know. When you listen you might learn something new
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