When creating your View, which is something I have already harped on a lot I am sorry, you have to decide which analystics to choose from. You don’t want to look at every fundamental out there, chart every stock tick, or run one thousand versions of regression models. Some people trade just on fundamentals, some on charts, and some just on moving averages. The purpose in that strategy is you don’t overload yourself with too much data and you are able to get a feel and a mastery of how that system works fo you.
Personally, I like to use a blend of all three. Like I suggested, I create a global/national market View for the product I am trading. Whether I am looking at currencies, natural gas futures, or just trading Apple stock , I do my research into the market area and have an outlook before I trade. Then I dig into the other fundamental of earnings, market prices and any new events that will signal a price shift. After that , I get into the charting phase going through historic date looking for peaks, bottoms, and tops and testing how accurate this has been in the past. Then I look at how the stock has behaved against moving averages and how regression to the mean looks with out a true new fundamental change. When I have done my vetting I implement my trade strategy and begin.
The important thing is not to stop here. You need to keep a daily tab on all of these analystics, keep refreshing and redefining and then adjusting your trade based on current market conditions. This takes time to gain experience and eventually you will gain a feel. You will definitely miss something, but that happens to everyone. Just use it as a way to learn and keep revising your strategy.
As always, feel free to email me with questions or input. Trading is about always evolving your analystics and finding the right balance that fits your trading style. Everyone is unique and there is no one size fits all. But this is the process that has worked for me and lead to my success.
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