Jim Rogers always says how he is the ‘world’s worst market timer’ and is essentially a fundamental trader. I am a huge fan of his and I know you are too. However, isn’t the development of any strong conviction about a fundamental idea dangerous to a price action technical trader with a rigorous money management system in place?
No, IMHO you should develop both. When they both line up, you’re probably onto a big trade. But don’t fall in love with your ideas. If you’re fundamental idea(s) are wrong, let your technical stops take you out. PTJ said “Price moves first, and the fundamentals follow.”
Jim Rogers seems to imply he takes a position and holds it, and does even add to it if the fundamentals become even more skewed even when it moves against him, which is effectively ‘averaging a loser’! Is he under playing his market timing ability or does his approach unworkable for my more technical traders with rigorous money management in place?
I think Jim has impeccable money management skills, but might actually be telling the truth about his market timing skills. One way that this can be true, is that his position sizes are tiny. Another possibility is that he annuls the effect of leverage buy making sure he has the full notional value of what he’s buying put aside as collateral.
That way, if a trader’s timing is the worst, s/he would be able to stay with the position for quite some time and not end up sweatin’ out your position.
As it happens, I will be speaking with him this week so I’m going to pose your question to him on your behalf.