Fundamental analysis is the study of a company, market or economy to evaluate it's history, current standing, and value. This may include studing financial reports, earnings, sales, assets, etc.. Most investors will say that they are fundamental analysts.
Technical analysis is the study of market data from charts to evaluate a markets standing and potential direction. This may include studing trends, patterns, indicators, price, volume, etc.. Most traders will tell you they are technical analysts.
Visit this link to get a more concise definition of the two:
What is the difference between fundamental and technical analysis?
As a trader, I major on technical analysis being that most trades are short term (1 day, 1 week, 1 month). Investors are usually in for the long haul (years). But don't get me wrong, for a professional trader need to consider the fundamentals of whatever market he/she trades, i.e. not to trade around an earnings report or knowing which stocks were upgraded or downgraded. Fundamentals can affect results.
A successful investor still need to consider some technical analysis. For instance, he/she would want to buy a company of good value or undervalued at a strong support level.
So to conclude, both are important whether you are going to be a trader or investor or both.
Technical analysis basics
Fundamental analysis basics
Also see
Investing Basics on Nasdaq.com
No comments:
Post a Comment