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Originally Posted by mrbaseball
These are exactly the kinds of things built for TA Trying to time them fundamentally has proven to be almost impossible over the years.
You seem to have some definition where timing something "fundamentally" means deciding it's overvalued and shorting it. Fundamentals are far more than that - they're upcoming or just broken news and catalysts mostly.
Take my ROKU short. I explicitly stated the fundamental catalyst and time frame - no negative analysts had come out, there was only one pumping it who'd fired two rounds, and they were sure to come out soon. Guess what? That's precisely what happened. The last two days have been negative analysts coming out and that was worth 13%. There was absolutely no way to capture this if you relied on technicals.
For Netflix, the catalyst is the upcoming substantial Disney competition in 2019. It's long term.
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If they truly do turn the price action will tell you.
This view is silly. If "the price action told you" when to short or do anything, then everyone could get rich off price action. No such edge exists. If there is an edge in price action, it is necessarily small.
If the price action tells you anything it would be a tiny amount of EV. It's my claim there are spots in the market for large EV.
I asked you before, what are you claiming is the EV difference between "waiting for the price to turn" vs trading while ignoring that? You cant answer that, yet make categorical claims. The difference CANNOT be very large or there'd be stupendous amounts of free money out there purely on algos for institutions who don't have to pay retail spread + fees. It would be academically proven beyond all doubt, rather than the literature saying there is zero or slightly above zero at best in anything technical.
It's my claim that there is a large edge in fundamentals, and that "waiting for price to turn" according to whatever tea leaf reading you're doing is flushing that edge down the toilet, because the price turn edge must necessarily be small, and fundamental edges may not be.
That's without going into the the loss of noticing opportunities because you're running worthless stats and lines on charts and thinking about them all the time, rather than looking for real non-tiny alpha.
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If you shorted all that stuff a year ago (and I know you were negative on them then too) for a year long hold you would be outta bidness.
You'd be out of bidness on a 20-40% move against you? If this is your view or your bet sizing, then you shouldn't short.
I know you trade commodities so you live in a different world. Do you claim to have beaten the index on stocks? You bring a view here that's terrified of even small loss. I respect that and I'm sure it's very wise in many things, but it's not really relevant to fundamental or catalyst trading.
I agree wholeheartedly with letting winners run.
Last edited by ToothSayer; 01-05-2018 at 01:16 PM.