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Tuesday, December 28, 2010

Technical analysis vs Fundamental analysis

Technical analysis is the study of market action, primarily through the charts, with the aim to predict price trends.
An adequate technical analysis must comply and demonstrate these following three things:

1. Trends
2. Overbought / Oversold zone
3. What is done by a professional


Fundamental analysis is the most vital market analysis that should be done before you trade. Fundamentals drive the market prices that make the market react so as to produce charts. Fundamental analysis is basically classified into two main groups, namely the fundamental macro analysis (Include business cycles, Intermarket analysis), and micro fundamental analysis (covering several criteria such as P / E, EPS, divided yield, etc.)

Over the years there has been debate that does not go over the stronghold of technical analysis with stronghold of fundamental analysis. The best for you is to successfully master the way of analyzing the market as well as possible so that managed to find opportunities in all market conditions whenever you want. Concerning with it, we will not argue which technique is superior. Mindset of a professional trader will not make you choose which is more comfortable. You have to learn both of them!
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