Good evening ....

A good friend of mine once asked me this simple but very pertinent question

Is there a one size fits all style of trading or investing in the stock market ? Interesting question considering that we all know that there are countless methods ranging from the software based "scientifically" packaged to the rule of thumb guess work style adopted by many. 

That said I would like to add my 2 sen worth as follows....

Instead of deciding on any one style it may be better to categorise stocks according to their historical movement trends  and only then decide on the best method to apply....A practical but realistic approach may be as follows...

 Heavy weights ( blue chips ) : These are fund managers favourite haunts and hence the the fundamental analysis based method may be most suitable. Changes in performance  ( profits /div yields ) will affect the share price. So it is only logical one should pay close attention to such data and analyst writeups...

 Growth stocks : These "aspiring " counters are plentiful and are the favourites of middle level investors, mainly individuals who love a good story line and will lap up well researched reports. As the mix between mid term players and short term opportunists are quite balanced here ,the best suited method could include a combination of technical analysis, fundamental analysis and other momentum based techniques...

 Lower liners ( speculative ) : These are the volume kings and form the main stay of top 20s day in day out. Being mainly retail based and where price movement not necessarily driven by fundamentals nor corporate developments, momentum or trend based trading methods are most suitable. Imagine trying to apply fundamental analysis on a PE 100 stock and trying to "justify " its share price climb...You either join the band wagon or sit out the bulk of the trading action everyday in a bear and quiet market as is the case now....

In short it may make sense to know the type of trader or investor you are before you worry too much of the trading methodology..

Happy weekend & wish all will have a great profitable week ahead. Till then happy reading on lazy sunday.

Thank you

Chris Choo

http://traderight88.blogspot.com

chrischoo007@gmail.com