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Today I talk about whether the fundamentals of a market or a stock should be something that a technical trader should care about. Traders tend to draw a line between the two camps. So where does that leave the day traders?

Whats your take on technical vs. fundamental trading?  Lets hear from you just leave your comment below!

Read the full video script: 

Id like to talk today about whether the fundamentals of a market or a stock should be something that a technical trader should care about.

Traders tend to draw a line between camps.

One camp… the technical trader camp… will tell you that all market factors, including fundamentals, and all market factors that are anticipated over the next few months are in the CURRENT PRICE…so paying attention to fundamentals is redundant exercise at best, or a waste of time at worst.

The other camp… the fundamentalists will argue that eventually (and eventually can come sooner than you think) whatever the underlying math says or the underlying business environment says will, in the end, dictate price, and the price gyrations caused by day traders should be ignored.

So where does that leave the day traders?

Id love to hear your take on this.

For me, I believe that the fundamental view and the technical view are not mutually exclusive.

Over the years, Ive found a way to use both approaches to my advantage.

By their own argument, the fundamental trader sees the fundamental approach as general and overriding in nature, giving the trader a long term direction.

So, if fundamental analysis is telling me that the path of least resistance is higher, then many times, Ill choose to trade exclusively from the long side.

And so, as I trade, I trade from a totally technical standpoint, where price action is my only guide to my buying and selling, but Im making those technical decisions from the long side, which was influenced by my earlier fundamental analysis.

Fundamental analysis gives me the general backdrop, which can determine which direction I trade from, and the technicals give me the parameters and timing for my positioning and executions.

When I trade the agricultural markets, whether they be stocks related to agriculture or the actual grains, like corn, wheat or soybeans, I will ALWAYS take into account where I am on the calendar.

In the from late spring through early summer, I know that the fundamental factor of weather plays a huge part in potential moves for the grains… more specifically heat waves and droughts which can drive the grains higher…way higher.

Therefore, I always trade the grains from the long side in the summer.

I then proceed to look for technically verified opportunities to take on long positions, thus putting myself in the direction of a possible spike in prices.

Again… for me, fundamentals have a real value in supplying me with a general backdrop to my trading… allowing me to go with the flow… and the technicals call the actual shots for me.

How about you?… do you completely ignore fundamentals… and thats OK if you do. but Id like to know why… and if its working for you.

Or do you think the technicals are way over-emphasized in modern trading and that we need to get back to basics?

Take a couple of minutes and LEAVE A COMMENT. This is about all of us. not just me.

I know a lot of smart and successful traders listen to these 4 minute drills … and I thank you for that.

Ill thank you even more if you join in and tell me what you think of fundamentals vs. technicals.

Take a minute and state your case!

OK… thats it for this addition of 4 minute drill for traders..