Topic.

Price action / Technical analysis > Fundamental analysis.

Fundamental analysis = always released after institutional orders are set in place, days sometimes weeks in advanced.

If you doubt this, ask yourself this, in a world where everyone wants to make money, and a sector that is specifically driven by the profits it generates annually, why wouldn't lobbyists and insiders exist?

Everyone has a best friend, and these institutions pay good money for "tips" especially when they have journalists on payroll.



With Price action, you are able to visualize the set up before it happens. You can see the books, and where these big boys are placing their orders, and deduct whether it makes logical sense. (Are they accumulating here, does the risk make sense, do the profit targets match up with proper levels) and this can all be done in less than 30 seconds of looking at a chart and order book.

Where-as fundamental analysis is just a bunch of reading of bullshit that won't matter after you get stopped out of your precious trade. ( to only re-enter a revenge trade, and get stopped out again because you are so married to the idea that this stock is going to moon."

Price action gives you an actual edge over the rest. Once you truly understand price action and you're not just trading patterns that some guru told you to learn, but you actually understand why and how these patterns even came into existence.


Now that we've deducted Price action trading as the superior form of trading in every way shape and form I digress.



Since I know that 99% of you in here probably have no idea how to trade proper price action, which isn't an insult, it's just the reality that exists today. Proper Price action is not taught online, and I have yet to find one "guru / mentor" online that is actually teaching proper price action trading publicly, all of the old blogs (yes blogs) that did have decent information have been purged and you can only pirate them in pdf forms now.

There is hope for you to developing an edge but it might cost $50 on fiverr to have someone create it.

Basically think of d2 bots, but IRL data scraping bots.

Instead of joining games to farm baal, it scrapes data from social media sites and compiles it into a analytical report of which you can deduct a theory to buy or sell a stock.
This will not provide you with the best price, nor is it in any way a proper way to trade.

But you can create an analytical sentiment of what is going viral before it actually "goes viral" (real time scraping data with alerts)
And bam, when the market opens, you know where retail eyes are going to be to pump the low float stocks.

No need for fundamental bullshit research, no news feeds, no fucking lame shit, just a bot that tells you tickers that are bullish/bearish based on the data mined from social media, and then you formulating a theory whether you think it's gone viral enough to buy, and then ride the wave.


This strategy will not go away, it will be here as long as social media and the internet exists, and it will save you from YEARS of eye bleeding from staring at charts trying to understand concepts that only certain personality types can even see.


but, ANYWAYS Fundamentals are USELESS, change my mind.


NOT FINANCIAL ADVICE BTW.

Can agree with some of the stuff that you're saying like lobbyists and insider does exist, have always existed and will always exist but saying that fundamentals are USELESS is non sense. What moves the markets is monetary policies, interest rate and sentiment, algos and everyone else gets in that shit. Why do you think markets only have a single direction since March 2020? It's because of QE/funny money/money go brrrrrrrrrrrrrrrrrrrrrr or whatever you wanna call it. Same thing with yesterday FOMC meeting, they brought up the words "starting to think about thinking of tapering". What happened since that statement? Stock down, yield down, gold up, exactly how it's supossed to play out. What do you think will happen at the next jacksonhole meeting if they start talking again about tapering markets?

I am an avid price action person but saying that fundamentals have no impact whatsoever is naïve. Ask Anton Kreil if he is shorting the dow on a 61.8 Fibonacci retracement and a trendline confirmation, do you think Georges Soros blew up the pound in the 90's on a weekly resistance? Cmon mein

You're not wrong, but reread what I said


Fundamental analysis = always released after institutional orders are set in place, days sometimes weeks in advanced.

If you want to place a trade, do you want to know before or after the news is released the direction of price?
If your answer is before, then use price action
if your answer is after, then use fundamentals

why would you ever want to know after the fact.. you wouldn't therefore, fundamentals are useless.


The move that happened yesterday/today was all priced in. I saw it coming, didn't you? https://www.tradingview.com/x/n8pSrBCD/

99% of investors are not day traders, so 99% of investors don't need to understand price action.

There is no difference between the two, they buy something, and are eventually going to sell it. Whats the duration at which you hold it affect anything.

If the intention is to hold a stock for several years, short term sentiment is trivial noise.

Do you think I care about entry point when buying a S&P 500 ETF or a Canadian bank stock? No. I also don't care if the majority of voices are doomsday sayers because you can simply backtest and use historical data and look at their current balance sheet (if a single stock) or look at the top holdings if its an ETF. Sentiment isn't even remotely a consideration, nor should it be. There's significant evidence that shows money in the market does better than people trying to time the market for the correct entry point. You're better off just putting in your ETF and letting it sit regardless of what the average immediate noise is.

Let’s use figures Fidelity (https://www.fidelity.com/viewpoints/investing-ideas/six-tips) has already compiled to look at time in the market vs timing the market and lets look at it from our perspective, the average investor with investing being a primary passive activity in our daily lives. Fidelity’s figures are based on the performance of investing $10,000 into the S&P 500 and while you can’t directly invest into an index you can invest in ETF’s that mimic the S&P by matching its holdings. The figures are also pre-tax and assumes all dividend reinvestment.
The findings are staggering. By missing the 10 best days over a 38-year period you would be cutting your return in half. It drops dramatically from there.


This post was edited by SBD on Jul 8 2021 08:19am

Just because you don't care about your entry, doesn't mean you don't care about your exit. You're gambling purely on the thesis that stonk market only go up. While history data does support that, there will come a time when the empire fails, be it in our life-time, or future generation, it is going to happen.

That's not to bash your investing style, in-fact I believe this is the best method of investing for the average person because it requires little to no speculation, you just yolo your money each month into an etf or index and wait until your knees start hurting and back has degenerative discs then pull out.

However, there is no difference between a day trader, swing trader or "investor", they are all investors, they all buy and sell X. which is an investment.

It is how-ever a low yielding strategy, in comparison to leveraging your money daily.

I also don't allow sentiment to impact my exit, since it's a long term investment that I have no plan on exiting until scheduled draw downs that are pre-determined.

You're saying its a low yielding strategy, but the data shows that those why try to make individual picks on a daily basis are more likely to underperform the S&P 500 investor. You also assume that just because someone is not making individual picks based on sentiment that they are not leveraging their money. That is also likley not true as the average individual leverages money elsewhere in other asset classes typically a property and the bulk of their savings is already leveraged 5x meaning further leverage via investments for the average person with average net wealth is likely crossing a risk barrier for them. For many individuals their home is their largest forced savings so the majority of their money is leveraged.

Now for the group that has excess or is not in other asset classes, margin is commonly used for long term investing, so they are using leverage.

I would also argue that the data I provided you in the previous post completely nullifies that its a low yielding strategy compared to those leveraging money daily since it shows that time in the market via leaving money in long term significantly out paces those trying to time it.

I would also say your comment on there's no difference between day, swing and long term investor is also completely false. Its completely different styles that have historically yielded completely different returns and have completely different tax consequences that also have a major impact on return given a day trader in Canada is taxed on the full income or loss vs a long term investor is taxed at the much lower capital gains rate. While the end goal of "making money" might be the same, to say there's no difference is a far stretch just because the end point is essentially to not lose money. An individual trying to put just enough away for retirement is likely to have significantly different risk tolerances than the day trader working a firm who's not using their own money or the 20 year old using what might be a large portion of their current wealth but really it only amounts to one future pay cheque 2 years later.


Annually Dalbar publishes reports of average returns of the S&P, mutual funds, asset allocation funds, etc. In the 2017 report Dalbar published some eye-opening figures. The 20 year annualized S&P 500 return was 7.68% while the average equity fund investor was only 4.79%. The average fixed income mutual fund investor was significantly less.
Per the study 50% of the reason that individuals missed out on similar performance to the S&P was psychological reasons inducing loss aversions (withdraw due to market fear), mental accounting (separating investments mentally to justify the success and failure while not looking at a portfolio as a whole), lack of diversification, group thing / herding (following what everyone else is doing), regret (not performing a necessary action due to the regret of a previous failure), responding to media stimuli, and over optimism. The study found that the two largest factors was the herding effect and loss aversion.

I think there can be value in momentum or sentiment trading with a very low % of your portfolio. Humans are inherently short-sighted and tend to overthink things, which results in irrational decision-making. Great examples being financial crashes. Naturally everyone impulse sells creating a further crash. If you can limit a small portion of your total net worth to engaging in something that satisfies your mind and keeps the bulk of your portfolio safe since you have satisfied that need to make short term decisions based on noise, than it has value. I kind of equate it to consumerism and making small purchases that can satisfy that need to buy something so you don't get pent-up and make a large irrational purchase that equates to 30 years of those small purchases.

This post was edited by SBD on Jul 8 2021 09:10am

WTF is a scheduled draw down?
Buying a home to live in, and paying down equity is not a leveraged asset... until you rent it out, and have a consensus of selling it in the future for a profit to realize the gains.
Margin should NEVER be used on long term (spot) positions, that would be retarded, because you eventually have to pay down that margin, as-well as the recurring interest rates on it.
And yes, I stand corrected, 5-8% isnt low yielding, it's an average.
There is also a big difference in someone with $50k (retail trading) vs a equity fund managing millions/billions of dollar. The strategies are vastly different, and in most cases a majority of the losses are from capital preservation via hedging.
and I agree with everything else you said.

When it comes to retail trading, the statistics are very skewed, 80+% of retail traders have no idea what they're doing (perfect example of this would be just go to reddit/wsb)
However the ones who do in-fact understand the market, can easily make 12-15% annually. Which in my opinion is a high yield. Hell some even make way more than that, but in terms of a year over year basis, 15% is very realistic on small sum of money. 50k-1mil.

A scheduled draw down is exactly what it sounds like. A predetermined draw down for when you will need cash flow for X. For long term investors, pre-determined draw downs are scheduled across 20-30 years for tax planning purposes that is typically intertwined with individual goals, income splitting and forced draw downs which we have in Canada once you hit the age of 71.

The majority of people sell their first home so there's clearly on average a consensus that it will be sold and given the housing market in most high density areas has only increased over a long period of time its safe to say that you are investing into an asset class and using leverage to maximize appreciation be it the only reason you are using leverage is due to the cost. It still works out to leverage appreciation. 81% or so of the menial population surveyed has said they intend to sell their first home so I don't see this trend of selling the first home ending anytime soon.

Yes eventually you do have to repay margin but again when interest rates are low which in the past 20 years they have been the return using margin is in excess of not using margin when using a back test calculator even with decay. Its about using the appropriate amount of margin. Your natural assumption appears that you are maxing it so you will get margin called. That is not what rational investors are doing. They are using a fraction of availability and baring a full 75% market crash they won't be margin called and as a result will not be averaging down their investment that they intend on holding for the next 20 years. Even in 2008 when it fell 37% the people I deal with would not be called. While the counterargument to that might be "well they are not maximizing potential then" that could be true but there's a balance to strike and the average person isn't going to assume that much risk because they simply wont sleep at night since they have other life obligations and wouldn't risk the farm on maximizing potential return using full margin room. A simple trade-off.


You're going to have to provide me some hard data showing how easy it is for the 20% or whatever % of retail investors you believe are making those returns. I imagine its significantly less than you think. If its so easy you would think the employers with headhunters and talent acquisition staffing looking for the best and brightest would at least average that, but places like Berkshire Hathaway are averaging 9% annualized over the last 15 years, sure if you go way back to like 1955 or something its 20% average but if we look at todays retail investor market / the last 15-20 years its not even reamotly close.

This post was edited by SBD on Jul 8 2021 10:17am