Visit www.stockgym.com to gain more insight about the author and his trading services, which combine fundamental analysis with technical to gauge an initial trading position size by assessing worst case scenario standard deviation, which ultimately what drives profits home. In layman's terms, fundamentally poor companies with high Beta will have smaller position sizes on the long side and vice versa for shorting.
In trading, what is more important is betting heavy when all signals are green. By adding fundamental analysis to the mix, we stand a better chance against hedge funds using intelligent algo-based softwares that detect panic within milliseconds as well as manipulative market makers that push out weak hands from trading positions. Hence, we often switch gears from day trading to swing to ascertain the most optimal efficiency in our trading profits by keeping a close eye to our total position and volatility.
In following the footsteps of John Templeton, Peter Lynch, Benjamin Graham and Warren Buffett, I wholeheartedly believe Peter Lynch's advice on that it is futile to predict the economy and interest rates. Bargain hunt and pick value stocks with good business models and great management by keeping a close eye on competition, and you should do well.
Edgar Ambartsoumian has been a stock and options trader for 14 years and received his BBA in Finance and Accounting from UTSA.