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Fred,
You're probably right, I just haven't seen anyone put forward hard
numbers to support it. The details of the testing would be a little
tricky. Off the top of my head, I guess I would create a watchlist
of stocks with top-rated fundamentals and one with bottom-rated
fundamentals. Then I'd run various types of trading setups with each
watchlist and see if the differences in the results were
statistically significant.
One of the problems, though, is that you would need to test over at
least several years of data, and since fundamentals are constantly
changing, you'd have to adjust for that somehow.
Wayne
--- In amibroker@xxxxxxxxxxxxxxx, "Fred" <ftonetti@xxxx> wrote:
>
> You're right ... It does SOUND good ... If you have earnings data
for
> a few years I suggest you test your theory of buying good
fundamental
> candidates on dips .vs. buying candidates based on price action
> leading up to the dip, preferably from at least the previous dip.
In
> ten words or less I think you'll find that stocks with better price
> action perform better ... Why ? because not only is everyone aware
of
> the published fundamentals and already factored that into current
> price, but SOME are more aware then that and that is factored into
> price as well.
>
> --- In amibroker@xxxxxxxxxxxxxxx, "seneca_kw" <seneca_kw@xxxx>
wrote:
> >
> > To my mind, this is one of the biggest questions in trading.
Does
> > including fundamentals provide an additional edge? It certainly
> > seems plausible. If you're buying pullbacks, it makes sense that
a
> > company with strong fundamentals is more likely to reverse to the
> > upside than a company with weak fundamentals.
> >
> > The fact that something is plausible doesn't make it true. Like
> > everything, it needs to be tested, and that's what I'd be very
> > interested in hearing about. Even if someone doesn't have
results
> to
> > share, I'd be interested in discussing ideas about HOW to do the
> > testing.
> >
> > Wayne
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Claude Caruana"
> > <claudecaruana@xxxx> wrote:
> > > Hi all,
> > >
> > > I am an Amibroker user for a few weeks now and I must say it is
> > about to
> > > turn my trading method 180%.
> > >
> > > I initially purchased Amibroker to be able to generate optimal
> > signals for a
> > > watchlist of around 100 stocks which I have selected for their
> > fundumentals,
> > > however I am finding that my results work much better and more
> > consistently
> > > on the entire stock universe (The 7000 tickers I have loaded in
> my
> > db) than
> > > if I try running it on any watchlists containing less that 200
> > tickers.
> > >
> > > I find that, in general, the most reliable entry signals occur
> very
> > > infrequently, and hence, signals are too few and far apart to
> create
> > > consistent results when the basis is my 100 stock watchlist. If
I
> > try to
> > > "loosen the parameters" and get an optimal number of signals
for
> my
> > 100
> > > stocks, then the system will not be as reliable as the one
> > with "tighter
> > > parameters" scanning the entire stock universe.
> > >
> > > Before I ditch my fundumental approach (which quite franky has
> yet
> > to give
> > > me positve results!) altogether and start using a technical-
only
> > system, I
> > > would be very grateful if anybody could confirm whether my
> > observation about
> > > entry signals is normal, or whether I am missing something.
> > Finally, are
> > > there any of you out there who trade using technicals only?
> > >
> > > thanks for any feedback!
> > >
> > > Claude
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