ArticlesBase.com - Free Articles Directory
Free Online Articles Directory
10.10.2008 Sign In Register Hello Guest
Email:
Password:
Remember Me 
forgot your password?


Technical or Fundamental Analysis (forecasting)

Author: Mostafa Soleimanzadeh Author Ranking Blue | Posted: 03-07-2007 | Comments: 0 | Views: 46 | Rating:  (71) Article Popularity - Blue (?) Got a Question? Ask.
Sign Up Now!

In this article I compare these two methods of forecasting in the stock market. I give the reasoning that why technical analysis is superior to fundamental analysis.

As you know, technical analysis concentrates on the study of market action, and fundamental analysis concentrates on the economic forces of supply and demand that cause price movements.

Fundamentalists try to determine the intrinsic value of the stocks. They examine all factors that affect on price. If the intrinsic value is under the current price, fundamentalist sells the stock because stock is over priced. If price is below the intrinsic value then market is undervalued and should be bought.

Fundamentalists study the cause of market movements, but reasons of movements aren't important for technicians. Technicians believe that the price reflects the effect of all events that make change in price. Therefore study of price action is all that they require.

Most people use both technical and fundamental analysis to trade. Many technicians have basic knowledge on fundamental approach and many fundamentalists have basic knowledge on technical analysis. But, most people have more interest on one method.

Why Technical Analysis

Fundamentalists must find the reasons of price movement. Sometimes this act is very complicated; there are so many factors that make change on price such as political, psychotically events and so on. To trade the fundamentalist must study and research tremendous amount of data that takes so much time and effort.

Technical analysis is Flexible and Adaptable

You can apply technical rules to every market either stocks or futures or any other market. The technician easily can follow many markets in the same time. This is a great strength because you can catch big movements in each market.

Trading in different Time Dimensions

You can use technical rules for daytrading, swingtrading, long term trading and etc. rules are the same you only change time of charts. Some people say technical analysis is only suitable for short term trading, but it is not true. Using weekly and monthly charts that refer to several years has proven the strength of technical analysis for long term trading.

Rate this Article: Current: 0 / 5 stars - 0 vote(s).

Article Tags:

Article Source: http://www.articlesbase.com/investing-articles/technical-or-fundamental-analysis-forecasting-174288.html

Print this Article Print article   Email to a Friend Send to friend   Publish this Article on your Website Publish this Article   Send Author Feedback Author feedback  
Mostafa SoleimanzadehAbout the Author:

By Mostafa Soleimanzadeh. Stock Market Tips, Learn Stock Market Technical Analysis and Fundamental Analysis in his website.

Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Comment on this article Comment on this article
Your Name
Your Email:
Comment Body
Enter Validation Code: Captcha


Got a Question? Ask.

Ask the community a question about this article:

Q&A Powered by:
Powered by Yedda 

Latest Investing Articles

Investors Guide To Bulgaria
By: Karl Hopkins | 10/10/2008
Bulgarian country guide providing useful information, history and property investment tips.

An Investors Guide To Canada
By: Karl Hopkins | 10/10/2008
Canadian country guide providing useful information, history and property investment tips.

Bloodletting
By: MTnews | 10/10/2008
Daily Market Commentary for October 10, 2008 Written for day traders, active traders and investors. A review of the market activity for the day, economic data plus, world news from Millennium-Traders.Com

Understanding The Investment Power Of OTC Stocks
By: Nir Dotan | 10/10/2008
For someone who is not very well-versed with financial terms and jargon, trying to jump into investing in OTC stocks is a hard thing. You will have to deal with a lot of different terms and principles which might be confusing in the beginning, but as you get the hang of it, it will be easier and more manageable.

What Should I Do If I Intend To Invest In Penny Stocks?
By: Nir Dotan | 10/10/2008
Many kinds of stocks are traded on stock exchanges. The price, market capitalization, and the stock exchanges where these stocks are traded vary. Penny stocks are stocks with a low value and a low market capitalization.

SEC Filings To Check When Choosing Small Cap Stocks
By: Nir Dotan | 10/10/2008
Companies are obliged to produce and made publicize, fundamental information and statistics for their shareholders and prospective investors. This will eventually provide them with essential facts and information that may guide them in investing.

Are You Investing 401(k) Money in Real Estate?
By: Gordon Hall | 10/10/2008
First of all, What is a 401(k)? I will try and give you a shortened version. A 401(k) is an employer sponsored retirement plan run under section 401(k) of the Internal Revenue Code. A 401(k) lets an employee save for retirement and at the same time defers taxes on his savings and the earnings associated with them until he retires.

A Simple Guide To Buying OTC Stocks
By: Nir Dotan | 10/10/2008
OTC Stocks or over the counter stocks are usually offered by startup companies who have not yet met the requirements needed to be publicly listed in registered stock exchange companies. OTC stocks are offered through Pink Sheets or Over the Counter Bulletin Board or OTCBB.

More from Mostafa Soleimanzadeh

8 Basic Tips on Choosing Best Forex Broker
By: Mostafa Soleimanzadeh | 01/11/2007 | Finance
There are some basic notices that you should consider when you want choosing online forex broker.

Technical or Fundamental Analysis (forecasting) – Part 2
By: Mostafa Soleimanzadeh | 17/10/2007 | Finance
In part one of this article, I noticed some advantages of technical analysis and emphasized that technical analysis is superior to fundamental analysis. At the end of this article, I've put the link to part one.

Who is the Best Trader?
By: Mostafa Soleimanzadeh | 27/08/2007 | Investing
Learn about successful trader's characteristics to become successful.

Why Do People Choose Day Trading?
By: Mostafa Soleimanzadeh | 15/06/2007 | Investing
"Day trading" means that a trader tries to make money buying and selling stocks during the day taking advantage of the daily price movement. Day traders end the day flat (with no open positions).

Technical Analysis: Elliott Wave Theory Basics
By: Mostafa Soleimanzadeh | 23/03/2007 | Investing
Elliott Wave Technical Analysis rules and guidelines applied to the charts, and will help you trade and invest successfully through a better understanding of the market to maximize opportunity and minimize risk.

Fibonacci Sequences in Technical Analysis
By: Mostafa Soleimanzadeh | 23/03/2007 | Investing
Fibonacci is known for discovering a series of numbers that was called after him the Fibonacci numbers or the Fibonacci sequence.

10 Tips on Choosing Best Discount Stock Broker
By: Mostafa Soleimanzadeh | 23/03/2007 | Investing
Discount stock brokers are ideal for those who know the trade industry well and do not need extensive information about the market. Since an investor can obtain high discounts, these brokering services are very significant.

Trading Environments: Good and Bad Aspects of Trading Markets
By: Mostafa Soleimanzadeh | 12/02/2007 | Investing
It is important to know that markets environment isn't like other social environment in your every day life. To become successful in markets environment you require a very high degree of self-control and self-trust.

Article Categories






Give Feedback

Sign up for our email newsletter

Receive updates, enter your email below