Interesting discussion. Another thought… Say some type of system, technical or fundamental, works for 5% of all market participants that follow it, but allows them a 10000% return. Then say you have another system that works for 90% of all adherents, but it allows them to get “only” a 20% return. Which system is correct? Which system is better? Seems like this depends on definitions, bromion, which as you say could vary considerably.
Or, if you could create some standardized definition of the terms in question and then force everyone to adhere to those rules, you would just use a probability adjusted valuation to make your decision. I would take my chances with the 10,000% return…
The 5% is better as the 5% x 10000% is higher than 90% x 20%. But without risk, how can you really say which one is better?
I have another question on Technical Analysis though, according to CFA text (seriously) about the TED Spread “at times of international crisis, this spread widens as smart money flows to safe-haven US T Bills, which causes a decline in this ratio.” What if it is a US international crisis, does that mean this technical indicator is blown? Is smart money flowing to US T bills right now?
Risk? Pffft. It’s all about return, baby! Besides, if I am making up the rules as I go, why bother to include risk at all? Let’s all be billionaires. Edit: This may seem like a joke, but really, it’s a reflection of the marke today. The rules are still being written.
projectplatnyc Wrote: ------------------------------------------------------- > The 5% is better as the 5% x 10000% is higher than > 90% x 20%. > > But without risk, how can you really say which one > is better? I should be more clear, sorry, that is not an expectation since I didn’t say people started with the same amount. As for risk, you can just take for my hastily jotted example as risk-free to make it a simple example. Adding the idea of risk changes the points of this conversation and makes it a different and more complicated debate.
bromion Wrote: ------------------------------------------------------- > Risk? Pffft. It’s all about return, baby! Besides, > if I am making up the rules as I go, why bother to > include risk at all? Let’s all be billionaires. > > Edit: This may seem like a joke, but really, it’s > a reflection of the marke today. The rules are > still being written. Definitely! KURTOSIS does not get enough respect!
Well, for what it’s worth, I’ve made orders of magnitude more money using technical analysis than fundamental analysis.
Any specific techniques that you like specifically - technical indicators?
Well, I am a chartered TA (CMT), and I use a lot of fundamental stuff all the time, but I do find TA to give more satisfactory and immediate result than FA. I agree with rohufish that the shorter the time frame, the more relevant TA becomes, and the longer the time frame, the more relevant FA becomes.
Dreary, I am taking CMT L1 next month and ready for it. How hard are CMT L2 and CMT L3 relative to that?
Dreary Wrote: ------------------------------------------------------- > What makes you think that fundamental analysis > works? Do you really believe it does? no one “really” knows…we just keep building models and diversify. eventually, if you bat .600 in this business, you are king of NY, chris walken style.
http://www.mta.org/eweb/docs/pdfs/CMTProgramBrochure.pdf This looks interesting - so you just read some books and get tested? There are no LOS’s so to say?
I have one of those books on the list - - Pring “Technical Analysis Explained”, only have skimmed it though
sublimity, difficulty is subjective, but compared to CFA level I, I would say the CMT exam is much easier. Having said that, I know a few people who are struggling with L2 and L3. I may have been lucky, I dunno, but I passed all three from first time with very light reading. I did have many years of TA and FA experience going into the exams, though.
Oh, I meant CMT L1 compared to CMT L2 and CMT L3, not CFA. I definitely agree that CFA is tougher, though.
Was it worth it Dreary ? it looks like some good books they cover in the curriculum - -
cfa_gremlin Wrote: ------------------------------------------------------- > Well, for what it’s worth, I’ve made orders of > magnitude more money using technical analysis than > fundamental analysis. That’s probably because you are no good at fundamental analysis vs. technical analysis Ah this post is hurting my brain…
I think level of difficulty was similiar in all levels, although L3’s format was different, where you needed to write essays and put different material together.
" That’s probably because you are no good at fundamental analysis vs. technical analysis Ah this post is hurting my brain…" Nope. You can find fundamental analysis in technical analysis but not vice versa. projectplatnyc - in no specific order: moving averages - daily, weekly rsi macd stochastics price momentum oscillator volume new 52 week highs and lows arms index elliott waves various technical patterns - double tops/bottoms, triangles, wedges etc… and various others… GOTTA GO THE DEBATE IS STARTING…CAN’T WAIT WHAT THESE FIGUREHEADS HAVE TO SAY