Before we compare the methods, we must first discuss what both of these methods are, the simple versions.

Technical - A method of using charts and formulas to read and interpret data to make a sound decision on picking a stock.

Fundamental - When looking at the cash flow, net income, sales growth, return on equity, etc. If the numbers look good and volume seems decent, then you should buy.

Both formulas aren’t perfect, thus, combining them together is your best bet. If you can use the basics of each, you can get a better understanding of the stock. Making sure a company has good growth and is not losing money is a good indicator it has a chance to burst out of its base. Using the technical formula can help a lot, too, to see what the stock is doing and if it is forming a base that is solid.

Many investors wonder when enough is enough and when to cut losses. You can get many different answers around the internet.  I look at the professionals who know what they are doing and have a real track record of profit. One of those professionals is Willim O’neil. He has a track record of monstrous stocks and making huge gains. Another is Gary Kaltbuam, whose firm has not lost one percent in the bear market we are seeing right now.

What do these 2 professionals have in common with each other on cutting losses?  They always, no matter what, cut losses after 8%. Stocks can be very emotional, and becoming emotionally attached to something - especially in the stock market - is not good. You will do things you never would have done before.

What can you do to make sure you cut losses at 8%? Create a stock journal and write down what you bought your stock at. Then put the sell point at 8% below that. In the long run, this will help you trim the losers and keep/add to the gainers.