Difference Between Fundamental And Technical Analysis Pdf

difference between fundamental and technical analysis pdf

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Both Technical and Fundamental analysis are techniques used by investors globally to make stock related decisions. They are however different in several ways; fundamental analysis seeks to determine the intrinsic value of stocks using relevant data while fundamental analysis uses the historic market activities and trends to predict future price expectations. This technique can be used to analyze several trading instruments including shares, indices, currency rate and commodities.

When you decide upon Investing in the stock market, it is quite obvious you would be told to research and be prepared as much as you can, right? While you will be engrossed in the technicalities of this market, you will definitely come across two terms — fundamental analysis and Technical Analysis.

Technical Analysis vs Fundamental Analysis In The FX Market

The two main schools of thought when it comes to market analysis is fundamental analysis and technical analysis. Though they are not mutually exclusive, most traders will fall into one category or the other. From the analysis standpoint, both fundamental and technical analysis provide their unique advantages and drawbacks. In this lesson, we will discuss the pros and cons of each of these analytical approaches. So, what is technical analysis? Technical analysis is a method of forecasting that is based on the study of past price movements.

Fundamental vs. Technical Analysis: What's the Difference?

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Fundamental Analysis studies all those factors which have an impact on the stock price of the company in future, such as financial statement, management process, industry, etc. It analyzes the intrinsic value of the firm to identify whether the stock is under-priced or over-priced. On the other hand, technical analysis uses past charts, patterns and trends to forecast the price movements of the entity in the coming time. Stock prices change every minute, and so every investor is keen to know the future price trends of the stocks of a company, so as to make investment decisions rationally. For this purpose fundamental analysis and technical analysis are used to research and forecast price trend of the stock in future. Basis for Comparison Fundamental Analysis Technical Analysis Meaning Fundamental Analysis is a practice of analyzing securities by determining the intrinsic value of the stock. Technical analysis is a method of determining the future price of the stock using charts to identify the patterns and trends.

The following are some of the differences between fundamental and technical analysis. Fundamental Analysis : It seeks to forecast stock prices on the basis of economic, industry and company statistics. However, the most important variables considered in deciding stock prices are earnings and dividends. Technical Analysis : It mainly focuses on internal market data. Fundamental analysis : It seeks to predict long-term values of securities.


studies all those factors which have an impact on the stock price of the company in future, such as financial statement, management process, industry, etc. On the other hand.


Difference Between Fundamental and Technical Analysis

Fundamental and Technical analysis are terms used in the share market trading. The value of assets is affected by both macroeconomic and microeconomic factors. This value acts as a standard measure enabling the trader to understand whether the security is being undervalued or overvalued.

Investors use techniques of fundamental analysis or technical analysis or often both to make stock trading decisions. Fundamental analysis attempts to calculate the intrinsic value of a stock using data such as revenue, expenses, growth prospects and the competitive landscape, while technical analysis uses past market activity and stock price trends to predict activity in the future. Fundamental analysis takes a long-term approach to analyzing the market, considering data over a number of years.

Key Differences Between Fundamental and Technical Analysis

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Fundamental analysis is a methodology of stock valuation, which evaluates a stock based on its intrinsic value fair value.

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