CLASHES OF TWO CULTURES. TECHNICIANS VS. FUNDAMENTALS

In other words I can say speculators versus investors. Both schools believe their own rules and totally ignore the other school ideas. I would say I am more fundamental, but sometimes I use technical analysis too and I have serious concerns about the daytrading and scalping because in this trading strategy only the bookmaker/your broker makes significant size of money.

Why am I not technician? I have some arguments below and I hope this list help you understand better my approach:

1. Show me any billionaire in this business who is solely technician. All the great legendary investors are more fundamentals like Soros, Buffett, Paul Johnson, Peter Lynch, Jesse Livermore. 
2. Before the computerisation age of ’70s there were many thousands of profitable traders and they used only their pencil and a piece of paper.
3. The worst technicians are the daytraders and scalpers. They pay a huge amount of money for commission and as the old rule says „Nobody can serve two masters” You want to pay high commission or you want to make nice performance? Both doesn’t work at the same time.
4. The fast get in get out technician approach says we can predict the future, but it is a crap. Nobody knows what holds the future, we all are just guessing. Financial markets are far more complex than we could imagine. 
5. I met with thousands of technical traders and what I saw they are fully convinced by their system and if it goes wrong they start to blame the market not the system. 
6. The short term speculation, the basic part of technicians couldn’t work. It is impossible to forecast the short term market fluctuations.
7. Investing not a science so I guess the computer doesn’t help at all in this process. 
8. Long-term investors must be more philosophers rather than technicians.

All in all the Wall Street is only a gambling area for many traders, as they use enormous size of computers, different algorithms. But it is still just a financial gambling. For most technicians the stock market is not far from Las Vegas.

The BFM Assets Team.