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.

1 comments:

Mandeep January 29, 2009 at 3:53 PM  

nice stuff pallavi....u started sharing ur learning in a really good way to help others...its ur first blog n ur experience n words about forex really gonna help me here....im new to forex ...hve spent jus a few days but things are gettin cooler quite easily ....thanks pallavi for the valuable input posting here...i hope i wud start sharing my lil knowledge abt forex wid ppl here very soon...
thanks n regards

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