Stock Trading Strategies, Tips & Software | Technical Analysis: Stocks, ETFs, Stock Options

Technical Analysis vs. Fundamental Analysis

In a rational and honest world, there would be no need for or use for technical analysis.  The pristine "numbers" would reveal all, and fundamental analysis would result in consistent and stable stock prices, varying only as the fundamentals of stocks varied.

But, as you are perhaps aware,    we live in a world of rampant irrationality and dishonesty.  Hence the need for and use of technical analysis to attempt to determine whether stocks and options, among other financial instruments, are over- or under-priced.

Oliver Velez, for example, in his various speeches, often mentions that in his "previous life" that he was an accountant.  He states that, due to the things he was asked to do as an accountant, that he has NO faith in the accounting numbers that companies put out to the regulators and to the public.  He says something to the effect that "numbers lie, but the charts don't lie".  So that is why he is a stock trader using technical analysis, not fundamental analysis.

As an example of what Velez has to say about fundamental analysis, technical analysis, and his stock daytrading and swing trading methods, see the Amazon listing for Swing Trading with Oliver Velez
and a few more of my suggestions on another of my pages at More DayTrading and Swing Trading Books and DVDs.

Core Position Trading, Including "AIM" as an Alternative to Buy and Hold

If you do want to accumulate a stock over a long period of time, there is an alternative to leaving yourself to the mercies of buy and hold (buy and hope).  It is a longer term trading strategy called Core Position Trading (CPT).  Possibly the best known method is called Automatic Investment Management (AIM), created by Robert Lichello.  I use a variation of that for accumulation of various resource stocks.  And that's it; I am not into accumulating or buying and holding industrial, consumer, or financial services related stocks (or ETFs) in general at all.
Core Position Trading - CPT/AIM. Regards,
DB

A Core Position is defined as a core or basic position in a readily tradable item, including such things as precious metal (PM) bullion or coins, stocks, mutual funds, exchange traded funds (ETFs), etc.  Whatever it is you are trading will here be called the "item".

A Core Position Account comprises a quantity of the item AND a cash reserve position.  The cash reserve position enables purchases adding to the quantity of the item from time to time.  Proceeds of the sales of some of the item, from time to time, are added to the cash reserve position.  The cash reserve position enables purchases adding to the quantity of the item from time to time...

Core Position Trading™  (CPT) is defined as buying or selling, adding to or subtracting from, the core position of the item in such a manner as to, over time, increase both the amount of the item AND the cash in the account.

More about Core Position Trading

Glossary of Stock and Options Trading Terms

Core Position Trading
  AIM Stock Buy & Sell Calculator

Technical Analysis
  Risk/Reward Calculator User Doc

Stocks and ETFs
  Stop, Limit, Stop Limit Orders

Stock Options
  Options - The Very Basics
  Options Premium Intrinsic & Time Value

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