Trading ProgramsREVIEWS
The Fusion Trader’s Secret Weapon
A Review of VectorVest Online Stock Trading Software
By Matt BlackmanTraditionally, the gap between fundamental and technical traders/investors has been more gulf than line. Each group views the other with skepticism more akin to enemy troops rather than members of the same profession.
Technical analysts believe that all they need to know about a stock can be found in its price chart. By the time the market knows about key fundamentals, they have already been priced into the stock. One only has to look at the approach of a value or buy-and-hold investor for an example of this, they claim. A value investor buys stocks when the price drops since the cheaper the price, the greater the value. This approach with stocks like Enron and WorldCom resulted in colossal losses for those who used it.
Fundamental analysts, on the other hand, charge their technical counterparts with using past data to make future stock buying and selling decisions. Such an approach, they claim, is tantamount to driving along the freeway relying only on what you see in the rear-view mirror.
But there is a third group that effectively combines both techniques – the fusion trader.
Tricks of the Portfolio Trade
Relative Strength by Numbers
By Matt Blackman and Mike Carr, CMT
Relative Strength, or RS, has become a popular technique to compare the performance of one stock or mutual fund against the overall market. Everyone from individual traders and investors with a few thousand dollars in their accounts to portfolio and fund managers with billions of dollars under management use it.
Correction: Many try to use it, but few ever manage to do so effectively.