The Winning Combination for a Trader: TA + FA

Navigating Earnings Season with the Right Information

Hey there! My name is Nate and I write for WOLF Financial. If you enjoy learning about trading, I guarantee you’ll also enjoy my content on 𝕏 @tradernatehere. Thanks for reading!

This service is for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice. These are my opinions and observations only. I am not a financial advisor.

If you have followed me for any amount of time you have heard me say at least once that I prefer technical analysis over fundamental analysis.

I trust in the charts.

If you keep up with the latest posts from the WOLF Financial Newsletter you not only know how much WOLF leans into fundamental analysis, you know exactly how he does it because he just shared his process.

Check that post out here.

So, who has the better approach, the trader that prefers TA or the one that looks at fundamentals?

I have a better question. Why not use both?

From the fundamentals side, WOLF broke it down for you.

Quantitative Analysis

  • Balance sheet

  • Income statement

  • Cash flow statement

Quantitative Analysis

  • Management

  • Growth opportunities

  • Competitive advantage

  • Customer base

  • Innovation

That newsletter is worth checking out if you missed it (click here).

From the technical analysis side, the chart tells you everything.

Technical Analysis

  • Support and resistance levels

  • Supply and demand

  • Trends

  • Pivot points

  • Volume/levels of interest

  • Average price levels

  • Moving averages

  • Momentum

One obvious point, if you find a company that checks boxes on both the fundamental and technical sides of analysis, you might have a winner.

So again, why not do both?

If you have the time, the more information you have at your fingertips, the better.

That is also why I recommend only trading a small number of tickers, but that is for another conversation. One about quality over quantity.

With earnings season coming up there is no better time to understand how to utilize both fundamental and technical analysis.

If you have preferred fundamental analysis over technical in the past, take some time to analyze a few charts and see what else you might identify.

You could either bolster your argument for your trade idea or spot reasons to take a closer, deeper look at the fundamentals.

Charts can be eye opening.

If you have always focused on charts without concern for any fundamental analysis, I have no doubt there are times you wish you would have done both.

I could have prevented losses in a number of situations by paying more attention to the underlying facts instead of solely focusing on the charts.

The chart doesn’t lie, the price action is all right in front of you. But it can be just as misleading as a balance sheet or income statement.

The reason fundamental analysis is so powerful is it can help you recognize either strength or weakness well ahead of the price action seen on a chart.

Earnings season is often when the truth comes out and stocks make big moves in either direction.

Having a solid understanding and information from both fundamental and technical analysis will only improve your odds of being able to take advantage of these moves.

Improving your odds of being a successful trader is what this is all about.

Thank you all for reading and continuing to support the newsletter. We hope you find these Sunday posts full of helpful trading information!

Have a great week of trading ahead and a strong start to earnings season.