Fundamental analysis vs Technical analysis

[ioshean]

why Fundamental analysis is not better then Technical analysis?
What is the advantages an dis-advantages in Fundamental analysis
What is the advantages an dis-advantages in technical analysis

any one suggest for Fundamental analysis sofware or website


welcome for comments

 

[Placebo]

Hi ioshean. First of all technical analysis is not better than fundamental analysis and neither is fundamental analysis better than technical analysis .They are tools used for forecasting data. The stock market displays information in numbers and to get a nibble at the pot of money just waiting to be grabbed needs astute understanding of numbers ,which means decoding the numbers back into information in order to make sound financial decisions.

Why compare the two and try to determine which is better than the other ? Its just a matter of how skilled and passionate you are in the analytical tool used by you. At times fundamentals will forecast prices before technical charts support the view and vice versa.

The only subtle difference i can point out is that fundamentals are not of much use when it comes to day trading (perhaps i could be wrong because of lack of adequate skill in analyzing Free Cash Flows). On the other hand technical analysis can be put to good use for day trading.

Cheers

 

[SwingKing]

why Fundamental analysis is not better then Technical analysis?
What is the advantages an dis-advantages in Fundamental analysis
What is the advantages an dis-advantages in technical analysis

any one suggest for Fundamental analysis sofware or website


welcome for comments

It completely depends on what you are looking for, what is your time frame and what is your perspective of participation (trading, investing or speculating)

1. Fundamental Analysis - This is basically analyzing a company by using a suitable valuation approach (DCF, Relative valuation or contingent claim valuation) or by following methodological analysis (top down approach etc ). What you get out of this is whether a stock is trading at a cheap or expensive valuation. Comparing these with its historical levels, one can argue to Buy/Sell the stock. However, this approach is not suitable for trading or speculating. This is most suitable when a participant is looking to invest in the stock (1-5 Years)

2. Technical Analysis - This is basically trying to gauge the market sentiment and study current price action to forecast what lies ahead for the stock. Under this an analyst mainly studies price patterns, reversal patterns, indicator values, price behavior and other valuable data to decide on whether to buy/sell the stock. This is suitable for trading, investing and to some extent speculating (that is if you are an informed speculator).

3. Technical Vs Fundamental - Well, every analyst would have a different perspective on this. My take on this is that both are best when they are put together. This is something that works for me. However, it might be exactly opposite for you. Hence, use and understand both and then decide which method suites your trading style the best.

Take Care.

 

[trader.trends]

After doing all the fundamental analysis and technical analysis, you have to do the harder job - mental analysis to make money consistently in the markets.

 

[sudoku1]

After doing all the fundamental analysis and technical analysis, you have to do the harder job - mental analysis to make money consistently in the markets.

& this requires the cutting edge....DISICIPLINE !

 

[linkon7]

almost a year back, i was very intrigued by the FA vrs TA thing. even started a thread on that...
http://www.traderji.com/fundamental...med-traders-how-they-make-their-judgment.html

Today to me, FA doesnt matter much. All i know is how a few indicators work and where to put the SL... I just trade the index and options and combination of the two.
Rest everything is just G.K. for tea time argument with fellow traders...

 

[supremo]

this is a way-way different approach. but traders/investors can use both at the same time depends on thier systems and strategies.

 

[Saifee]

Fundametal Analysis Technical Analysis

1) What to buy ? 1)When to buy ?
2) Works in larger frame of time. 2)Works in relatively n smaller frame of time.
3) Quite predictable 3)Less predictable

 

[stockwatch871]

actually we cant choose one..becoz both have their own importance.....we can predict the market by fundamenteal as well as technical....

 

[rvm123]

fa is analysis of the fundamentals of the company like eps, pe ratio, book value, etc., which are real figures. whereas ta is analysis of the trend expecting some future price movements. hence in my view, fa is more scientific and dependable than ta (particularly in the long term investment decisions)