(20-10-2024, 09:41 AM)pinkpanther Wrote: On the flip side, long-term investors who predominantly rely on fundamentals can sometimes miss short-term opportunities presented by market inefficiencies that chartists might exploit. Understanding various time horizons and the interplay between technical and fundamental analysis can provide a more comprehensive perspective.
Ultimately, each trader must find their own balance and discover which approach aligns best with their risk tolerance and trading style. While it’s indeed challenging to ride the waves of the market, being adaptable can be a valuable asset. Embracing both methodologies ( technical and fundamental analysis) not necessarily as a means to combine them, but rather as an understanding of the market’s complexity may lead to more informed decisions.
Some Chinese market punters were recently in two minds about whether to load up on stocks at pivotal support levels and near their all-time low, as indicated on the chart. This presented great buying opportunities for bargain hunters. He who hesitates is lost. But then the main economic indicators and news continued to paint a gloomy picture of the economy that's still stumbling and not out of the woods yet. It put a dampener on their enthusiasm to buy.
That's what comes from straddling the lines between technical and fundamental analyses. The signals given out to investors can be pretty conflicting, resulting in them becoming paralyzed by indecision.
All things considered, having a clear comprehension of both methodologies will be advantageous to investors. One noteworthy mantra of theirs was brought up by you lately: "Buy on rumors, sell on news." The market always seem to be one step ahead of us. For instance, a market that has taken a battering suddenly makes a U-turn and heads north despite the most recent depressing news about the ailing economy. It rallies in anticipation of the economic recovery. When news of the recovery breaks later, the market begins to head south, astonishing market watchers.
The buzzword in the investment game ironically is "Buy on bad news and sell on good news!" A technical trader is unperturbed by all these confusing
news.