At Proactive Equities, we’ve developed a trading strategy that goes beyond the limitations of traditional methods by integrating the benefits of both technical analysis and fundamental analysis.
While long-term investors typically rely on fundamental analysis—evaluating earnings, management quality, and growth potential—and short-term traders focus on technical indicators like RSI and chart patterns to time entries and exits, these approaches often operate in isolation. This can lead to missed opportunities or exposure to unnecessary risk.
We combine technical analysis with rigorous fundamental screening to generate high-conviction trading signals. Entry and exit points are identified using technical tools, but only for companies that demonstrate strong underlying fundamentals and are undervalued from a valuation perspective. This dual-layered approach ensures that every trade idea is not only technically sound but also backed by a compelling investment thesis.
This methodology significantly reduces the noise typically associated with technical signals, especially in a market as dynamic as the ASX. Instead of being overwhelmed by dozens of daily alerts, we refine our focus to just a handful of high-quality signals per month—each one supported by both market momentum and intrinsic value.
Before any trade is executed, it undergoes a final filter: a risk-return assessment. We target swing trades with a holding period ranging from a few days to several weeks (and occasionally longer), aiming for a minimum return potential of 15–20% and a risk-reward ratio of at least 2:1, tailored to the size and volatility of the stock.
Ultimately, this disciplined and data-driven process typically yields 1 to 2 exceptionally high-conviction trade signals per month. These trades are designed not only to generate short-term gains but also to complement and enhance the performance of long-term investment portfolios—adding both capital appreciation and income potential.
