Finance

positive technical signals tend to be preceded by good financial reports by a company. That is, preceding the technical patterns and basic reports to anticipate. Stock price patterns reflect the purchase and sale of all people, the intimate knowledge of the Company. The rest of the world creates the noise in the stock investment behavior that the model that accompanies created with knowledge. Why sell strategies based on fundamentals in a volatile market are slow.

many investment managers to “basics” to tell them when you sell. However, as approaching the stock market crash, it was often the case that when the company announced that it would be the result of “soft”, the stock had already been rejected. Sell-strategies based on fundamentals (earnings, cash flow, backlog, etc.) proved based as far too “sluggish” in reference to the market action and compared with sell signals on the technical analysis (volume and price patterns of the stock). The problem was exacerbated by the fact that analysts often far from accurate in their forecast on the financial prospects of the companies were. Some of the shortcomings of fundamental analysis will be addressed through technical analysis.

Technical analysis offers its supporters an opportunity to respond in “real time” to conduct a share. Technicians need not wait for the next quarterly report of the company. In other words, engineers can quickly to what (current stock behavior), rather than waiting, when what should be (projections by fundamental analysts) actually happens (if the company actually produced the result expected by analysts) provide to respond. Each company has links to suppliers, competitors, officers and employees. These in turn have families and friends. Many of these people are the investors. There are also external investors, thinkers, journalists and other observers of people and their companies. The complete knowledge of all these people is in stock behavior against. The cumulative effect of all buying and selling activities of these people, and of them, to see these people, the regions of supply and demand (support and resistance) is clearly in the market activities of the stock, well in the patterns in the stock’s behavior.

This is why the behavior is often in advance of a company’s earnings announcement last quarter. The suppliers of a company to know whether this company has increased support or declining orders for supplies, equipment, or required to make products or deliver it to buy associated services (people with these vendors and their friends and sell). The competitors know of a company, if one has the strongest appeal to customers (people with these related competitors and their friends to buy and sell). Family members of employees and all her friends also have a general “feel” for how well a company is actually doing, without having to buy the use of “inside information” (these people and their friends and also for sale). The sum of all this “knowledge” is in stock behavior much faster than analysts can their next quarterly report will be published and written reflection. Statistically, their combined actions reduce “noise” (“noise” created by the actions of the uninformed), thus increasing or “pattern” of stock behavior.
After the last stock market crash
announced portfolio managers and strategists, that the old buy “and hold” investment philosophy is no longer viable. They said: “The market is too volatile for this type of approach. Even established companies can go bankrupt. The slightest bad news can lead to crash a stock.” Investing in lately some managers once again with the intention before holding any positions for several years (even if some say, sell them, when to change the basics). It is as if they learned nothing from their previous experience. Such an attitude more like an investor or consultant in a pattern of thinking that all losses are only temporary, lock, and everything will be good five years from now anyway.

The problem with this mentality is that it reduces vigilance. Why you should keep a portfolio in the eye or even the strategies think if everything works in the long term? What to do paid these consultants? We know from experience that not everything can turn out to be the five years okay. We can recite a long list of stocks that declined over 60% of what they were five years ago and they have not yet come close to recovering (I actually called a number of these companies in another article). Many of these stocks no longer exist or are now virtually worthless.

The point is that all these stocks well, many of the analysts who saw the foundations of these companies studied. There were at least some honest analysts who recommend buying linked repeatedly in dishonest and who has glowing reports about their prospects. These shares were touted as a great investment at prices that are subsequently judged to be too high (they did not seem particularly high at the time because they have been much higher that before). Nevertheless, some of the analysts who believed these companies really think they were very good picks investigated. They kept recommending the stocks, although they are held. Why? They did so because they concluded that these stocks are expected to rise further. Technicians who study price, volume, and various other stock patterns, on the other hand, sold, if their stop losses were triggered, or if technical sell signals were recorded. They would not argue with yourself that these stocks are expected to rise further. They acted on what was not on what ought to be. They were the smart ones.

Yes, one day to recover these stocks. However, could an investor, who were ejected from these situations, the profits in the following years, not just its stock decline or hope for a recovery day. Those who depend solely through “thick and thin” are the real players. Contrary to their own opinion of themselves, they really are not investors but speculators led by hopes and dreams. They have no real sell disciplines. They simply buy “good companies” and “keep blind flying without plans for the sale with the exception of” One day at a profit. “It’s much better to keep getting rid of losers and winners. If you do not” weed your garden, you will end up with nothing to do as a “weed.” Pulls the weeds, if you keep your garden is only flowers. The are the same is true for your portfolio. It is the percentage of time that most of a portfolio in rising stocks, as well the performance will be determined invested. Take the losers and the winners pick up the portfolio.

We prefer, in companies whose long-term financial prospects are good, because to invest in the long run, it is the result of that drive stock prices. In other words, a stock that is in an uptrend, because the company does well financially (good basis) will tend to keep that up-trend better than a stock that rises only because of the unjustified momentum. Since yours but the basis for a primary discipline, fundamentals leave much to be desired. You tend, at a rate that is inherently too slow for her work in this capacity to develop, especially in volatile markets. Poor fundamentals continue to give us a good reason to sell. However, a share in the rule to give a technical sell signal long before the company reports the poor fundamentals. Stockdisciplines. respond to com companies, rather what they get for the first signal. You can benefit from their experience with the same approach. They found that the first sell signal is almost always more technical than fundamental in nature. If you make it a habit to sell, only if the fundamentals deteriorate, then you have to reconcile themselves to much greater losses.

The same can be said , things will invest in relation to the buy side. We usually see technical buy signals before reporting the company a positive result. In other words, all the “guardian” of the company with knowledge, the company is good, so they have the purchase their shares and thus have the technical buy signal generated causes mentioned. can the profile of a stock accumulation patterns reveal much about whether there is something substantive behind the new purchase activities. If the foundations are released, those who bought the stock because of the technical buy signal benefit from the new wave of buying, following the release of positive fundamentals.

Also we have a very high opinion of fundamentals. If we get a technical buy signal, as we have the consisted of the basic profile in Value Line, Morningstar, or change in the Valuator before we make a purchase. If the technical signal is good but not outstanding, then outstanding foundations can make a big difference in how we in a stock (basic tend pulses) have seen. However, when a stock has a lousy technical profile, we are not to be interested, no matter how attractive a stock is fundamentally (it will not pass the “smell” test). There are also to feel times when a stock, the technical pattern is so convincing that we buy in our decision based on technical measurements, patterns or signals alone justified. Good annual reports often in the wake of positive technical signals follow.
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