Technical Analyst Vs Fundamental Analyst

Tuesday, May 27, 2008

Stock analysis comprises of two methods: technical analysis and fundamental analysis. Each has uniqueness of their own. Fundamental analysis is a method of forecasting value based on social, economic, political and environmental factors. Fundamentalist draw their conclusions on the basis of company’s financial balance sheet, past performances, income statement, goodwill, market share, profitability etc. This type of approach is mainly used for long term investment. Technical Analysis is made using charts, price trends, and daily/weekly reports. This type of approach is used for short term investment and slightly speculative, which means it simply suggests you to go which price trends.

My favorite is technical analysis as the form of my trading is intra-day. As a small investor, I purchase stock daily at low price and sell it at high. That’s how I book my profit everyday. I use the price trend charts, moving averages and relative strength to find the stock value and maximize my profit. With the help of price charts we can prepare Support/ Resistance level for getting buy/sell signal, which is very helpful for trading wisely.

Both TA and FA tools can be used to draw conclusion based on trader’s specification. This way, as per the choice of the trader and trading techniques adopted, any of the approach can be used for stock analysis. Both fetches reliable results and opens new path to success.


Tips on online trading in Forex

Saturday, May 24, 2008

Earning huge profits in long run is not a easy task in Forex. Many people lose tons of money in this trading system. Foreign markets are very volatile. Therefore people engaged in this trading system should be very alert and updated with the market movements. Being an active trader, I am suggesting some profit mantras which I gained by my own experience.

Profit Mantras

  1. Knowledge is must: good knowledge is very essential before trading. Understanding of subject, terminology, financial market behavior, current trends, foreign news are must for the trader.
  2. Knowing currencies well: currencies are traded in pairs. So it is very important to understand the impact and relationship among both the currencies.
  3. Risk Management: take risk only when you are prepared. Risk and return are the two sides of coins. Better management of risk will fetch better results.
  4. Read, learn and trust trend charts: gaining information and following trend charts can help the trader to earn huge profit. It is always advisable to stick with the trends as the currencies mostly follow a similar pattern with minor fluctuations.
  5. Deal in common pairs of currency: for a beginner it is always safe to trade in common currencies as the proper information is available. Uncommon currencies are very volatile and sometimes do not follow the past trends.
  6. Learn from the past experiences: always try not to repeat the same mistake and remember the mistakes done in past. Experience will make trader confident and will help him to understand market well.
  7. Avoid unknown Forex trading strategies: trader should not involve in these strategies which he does not understand.

Thus, there is no full proof strategy to stop loses but by following the above mantras trader can certainly avoid some of the loss. So friends all the best........


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