Fundamentals Drive Price Trends

JC Parets
August 3, 2021

Let me make something perfectly clear.

I'm confident that fundamentals are what drives the price of assets.

You also cannot argue against the fact that those prices regularly trend over time.

So Technical Analysis allows us to identify those trends, and profit from them, if that's something that you're into.

For us, we're certainly profit enthusiasts.

That's why we focus on Technical Analysis.

I'm sure fundamentals drive the decisions of many participants. We just don't necessarily need to know what those fundamental reasons are in order to take advantage of trends in price.

So we focus our attention on the Technicals.

Why wouldn't we?

You hear sometimes how Fundamentals tell you what to buy, and Technicals tell you when to buy.

But that's silly, and certainly not true.

Relative strength, momentum and prices are what dictate what to buy. They also dictate when to buy them. The fundamentals just get in the way and distract you from what's important.

If price is the only thing that pays, then why wouldn't our analysis both begin and finish with the study of price?

"But JC, why does it have to be one or the other? Why not both?"

The answer is because any time spent on studying funnymentals can be spent analyzing more price trends. So it's the opportunity cost of your time. Which is more valuable? By spending time on the less valuable to ignore the most valuable (and only part that actually pays you), is that the most efficient use of your time?

I'd argue no.

Why not just skip right to the source?

JC

 

 

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