Secret of successful trading

When it comes to trading , the analysts usually belong to two camps, fundamental and technical. Technical analysis is relatively new than it's older counterpart and many young traders fall in love with this type of analysis. They buy a charting software or download a free version from the net and start building indicators that will predict the price with 100% accuracy which will help them to be a billionaire in no time. Of course,
things are not that easy. Undoubtedly, There is an appeal of technical analysis to many enthusiastic traders ,that's why this is the main tool to make trading decision nowadays. You cannot ignore the freedom it provides to put your trading ideas straight into action. For this, traders overlay moving averages on the price charts or keep a pane of an oscillator just below it , don't they ? Yet , the number of successful traders and investors are still handful. Why ? What these legendary traders know that the rest don't ? The answer to that is not really a secret at all. If you study closely the writings of some very successful traders like William. J. O'Neil, Paul Tudor Jones, Mark Minervini, you will see that they didn't depend solely on technical analysis. They kept a very watchful eye on the fundamental strength of the stock, mainly earnings and sales. Moving averages don't push the prices up but earnings and sales do. I am not saying technical analysis is completely useless , rather it is an excellent tool to time the trade but when you pick a stock for trading it is wise enough to look at it's current performance before you take any decision. Correct balance between fundamental and technical analysis can make your learning curve considerably short.
let me show you a chart to explain the idea better. I trade in Indian stock market, better known as National Stock Exchange (NSE).

This is a chart of HDFC bank.It is a prestigious bank in India and it trades in National and Bombay Stock Exchanges. On the chart there is an uptrend from June to December 2012. Price continuously went higher for six months. what's the catalyst behind such an upmove ? Lets look at the quarterly earnings report.

For 5 consecutive quarters there is no sign of slowing down in earnings, in the last quarter it jumped quite a bit , and that is one of the reasons why it is showing strength on the chart. There are many catalyst that can start a bull run for a stock. Sales and earnings are two very strong candidates of them.Of course you need to look other factors than just sales and earnings but then it pays to keep an eye on them .Warren Buffett once said "It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price ".