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Clinging to the fundamental analysis and stock picking software, only keep you stuck in the trading of shares. Trading this way, the compounds of concentration risk in one asset class and fails to sufficiently diversify risks in shares, bonds, currencies and commodities. Â There?? But it’s much more to trading stock options, as stock itself. I quote Benjamin F. Kinga?? S study, mentioned several times since 1966, because it remains valid and has not been disproved to the point of rejecting logic. Market and industry factors, Journal of Business, January 1966: Â?? A stock?? S move. . .

There must be a more compelling reason for you to exchange shares for other than just the movement, if only 20% is unique in having the underlying issue. Â Consider this in the context of fundamental analysis and stock picking software you’ve purchased one for $ 1 basis. Â For every dollar of $ 1 you spend, you â?? Outsourced?? analysis, at a cost of 80 cents, only to receive back 20 cents worth of work. Shouldn?? T Rule 80:20 A?? Outsourcing?? be the opposite? The problem is that you’re still stuck with 80% of the work to analyze the movement of prices! A Plus, the more you use the techniques FA / stock picking software, plus the commercial capital is stuck in shares alone. Now you can say â?? SPECIALA?? Research Papers help you pick stocks. Â Letâ?? S have a look at some of the more fundamental common in these subscriptions search: 1. Dividend yield: the problem is in the variability of returns, because firms are at different stages of business development. Â A couple company that dominates a sub-segment/sector established is able to offer a dividend yield different, Versus, a young company in a growth-oriented field, Versus, a business located in a growing area that may not be able to pay a dividend. Â Keep in mind there is nothing special about companies that pay a dividend. A company that gives away part of ATI?? S retained earnings - which is a dividend - actually gives away part of its evaluation, which means it is not so much as a company need not give candy to investors incur capital to it. A So, a dividend paying stock must be far superior to a non-dividend paying stock for reasons other than the dividend. Â If it is not there?? S useless to search for products paying dividends to trade, there are many non-dividend-paying trade indices. 2. Price / Book Ratio: The problem is this metric varies across industries and business to business, as the asset base and capital structures of companies change over time. It lacks the applicability of the sector of the Cross and the complexity of the result of an accounting firm??? S capital structure as it changes due to acquisitions / disposals / CAPEX new lines of product or product line cutting back, as recently seen in the restructuring of large U.S. car companies. 3. A Price / Cash Flow Ratio (the cousin of the P / E): accounting law on depreciation vary across Asia, Europe and the United States. Â As the accounting rules are driven by tax codes, which vary widely by region, despite the adoption of global accounting standards, there is a lack of uniformity in the basic homogenization ratio that will fit like a common reference across the geographies. These measures fail to help you compare say a Dell parented in the United States to a parented Acer in Taiwan, but is listed as an ADR in the United States, although the two are competitors in the same sector computer manufacturers. In addition, the current cost of capital on dislocation in credit markets, affect the ability of companies to optimize the cost of running their balance sheets. Â In essence, companies find themselves with working capital cash flow remaining on their balance sheets, as evidenced by their financial strength. Do not waste your money on fundamental analysis software subscriptions or research paper. As there is a fundamental flaw in fundamental analysis and stock selection, how do you choose the trades? Trade options on broad-based index to replace the single stock exposure. Â To replace fundamental analysis, to gauge the relative strength based on point and figure methods. What is the relative strength? A There is nothing more than take a price as the numerator divided by another prize as the denominator, then multiplying by 100. A LR = (price 1 / 2 Price) x 100. Typically, the RS calculations use daily closing prices. Â Although simple in its mathematical construction, RS is ingeniously powerful when it is applied not only within a sector, but in all sectors and asset classes. Letâ?? S start within a sector. Â For example, if you choose 2 Stocks of semiconductor trade at different prices, how do you know if a stock is outperforming the other in the same area where the 2 stocks have price changes at different rates; Moreover, Sectora?? S itself the price changing? SOX = Semiconductor Sector Index, trades up from 452. 24 to 467. 81. Numerator1: Â Â Â Â BRCM Price1 = 33. 15Â Â Â RS1 = 7. 33A Â Â price2 = 33. 80 Â Â Â RS2 = 7. 23Numerator2: Â Â Â Â Price1Â TSM = 9. 91A Â Â RS1 = 2. 19A Â Â price2 = 13. 43A Â Â RS2 = 2. 87Common Denominator: Â Â Â Â SOXA Price 1 = 452. 24A Â Â Â Â Â Â Â Price 2 = 467. 81BRCMâ?? S = RS1 (33. 15/452. 24) x 100 = 7. 33. BRCM’s RS2 = (33. 80/467. 81) x 100 = 7. 23. Â TSMA?? RS1 = S (9. 91/452. 24) x 100 = 2. 19. RS2 Â = TSM (13. 43/467. 81) x 100 = 2. 87. BRCM is priced at 33. 15 to 33. 80 TSM price rises also at 9. 91 to 13. 43. Â Just because a stock BRCM is more important, it means he enjoys the SOX trading up? No, reading RS (RS1 to RS2 report) shows BRCMâ?? S RS reading dropped (7. 33 down to 7. 23) TSMA cons?? S RS reading, which increased (2. 19 to 2. 87). A RS confirms that the rise in TSM outperform power prices compared BRCMâ?? S weakening prices. A RS is built on rules of pure price. Using an index as the denominator acts as a reference much more durable and structurally more reliable compared to any â?? Magical?? Indicator TA, or a combination of income statements, balance sheets and statements of cash flows in programs sold stock picking. You can replace BRCM or TSM with indices or ETFs. Â Using indexes with Relative Strength allows a common denominator to compare claims against bonds, commodities and currencies, Crossover in asset classes other than stocks to trade. ATI?? S that the relative strength is infallible. Â But with respect to basic parameters cited above, the relative strength fails the least. Broke the mold of what you learned about the trading of stock options. Is there an example of a portfolio of options and quite profitable trades that using force on multiple asset classes? Yes. Â Follow the link below, entitled â?? Resultsâ coherent?? see an option for retail online trading, which excludes the use of single stocks and fundamental analysis, the use of broad based equity indices, commodities and currency ETFs ETF. Â There is no need to trade FX directly. Only trade currencies ETF options.