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The Indispensable Guide to Fundamental Analysis and Technical
Analysis
Fundamental analysis and technical analysis are two of the most frequent
methodologies used by investors to assess the advantages and dangers of long-term
stock market investing.
Fundamental Analysis or Technical Analysis
1. What is Fundamental Analysis and Technical Analysis?
1.1 What is Fundamental Analysis?
What is Fundamental Analysis?
Fundamental analysis is used to assess stocks by attempting to calculate their
intrinsic worth. Fundamental analysts research everything from the broader
economy and industry circumstances to particular firms’ financial soundness and
management. Fundamental analysts scrutinize earnings, costs, assets, and liabilities.
Related Course: Macro Fundamentals Trading Course
1.2 What are the Different Types of Fundamental Analysis?
Fundamental analysis is classified into two types: qualitative and quantitative. The
qualitative approach is influenced by goodwill, market circumstances, brand value,
and corporate performance. Quantitative analysis, on the other hand, is based on
statistics.
1.3 What is Technical Analysis?
What is Technical Analysis?
Technical analysis varies from fundamental analysis in that traders seek to spot
opportunities by examining statistical trends such as price and volume changes in a
stock. The underlying premise is that all known fundamentals are priced in, hence
there is no need to pay careful attention to them. Technical analysts do not attempt
to calculate the inherent worth of a securities. Instead, they utilize stock charts to
spot patterns and trends that indicate how a stock will perform in the future.
1.4 What are the Different Types of Technical Analysis?
Technical analysis charts are classified into three types: candlestick, bar, and line
charts. They’re all made using the same pricing data but present it in different ways.
1.5 What is the difference between Fundamental Analysis and Technical
Analysis?
What is the difference between Fundamental Analysis and Technical Analysis
As shown in the table below, Fundamental Analysis and Technical Analysis differ
greatly:
2.Which is better: Fundamental Analysis or Technical Analysis?
In trading and investing, neither Fundamental Analysis nor Technical Analysis is
completely reliable. Both traders and investors must study these two methodologies
based on their advantages and disadvantages to determine which is the most
appropriate for them.
3. How to Integrate Fundamental and Technical Analytics in
Your Trading Strategy?
How to Integrate Fundamental and Technical Analytics in Your Trading Strategy
Fundamental and technical analysis can be combined in a variety of ways. The
following are two instances of how three distinct technical analysis methodologies
may be used with fundamental analysis to generate better insights:
• Using range bound trading in conjunction with fundamental analysis
• Using oscillators in conjunction with basic analysis
3.1 How to use range bound trading in conjunction with fundamental
analysis?
In a strong up trending market, traders want to enter or purchase at the lowest
feasible price to maximize their profits. News developments, on the other hand, can
destabilize a range-bound market. In this situation, the trader would avoid open
deals near the time of the news announcement (due to low retail sales’ and ‘durable
goods orders’ data). The chart clearly demonstrates this disturbance, following which
the price level recovers to previous range bound levels.
How to use range bound trading in conjunction with fundamental analysis
3.2 How to use oscillators in conjunction with basic analysis?
Oscillators are often used as technical instruments for detecting short-term
overbought/oversold circumstances. There is an example of employing an RSI
indicator (technical indicator) in conjunction with a Non-farm Payroll (fundamental
indicator) data release, one of the most important fundamental indicators in US
history, in the chart below.
How to use oscillators in conjunction with basic analysis
4. To sum up: Key points about Fundamental Analysis and
Technical Analysis.
• Fundamental analysis is a process of studying securities in order to determine
their inherent worth for long-term investment prospects.
• While fundamental analysis seeks to determine the stock’s actual intrinsic
value, technical analysis is used to determine the best timing to enter or exit
the market.
• Decisions in fundamental analysis are based on the information provided and
the statistics examined.
• Fundamental analysis considers both past and present data, whereas
technical analysis solely considers historic data.
• Fundamental analysis is founded on financial statements, whereas technical
analysis is founded on price movement charts.
• There are two typical ways to combine fundamental analysis and technical
analysis:
• Using range bound trading in conjunction with fundamental analysis
• Using oscillators in conjunction with basic analysis
Source: https://libraryoftrader.net/fundamental-analysis-and-technical-analysis

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The Indispensable Guide to Fundamental Analysis and Technical Analysis.pdf

  • 1. The Indispensable Guide to Fundamental Analysis and Technical Analysis Fundamental analysis and technical analysis are two of the most frequent methodologies used by investors to assess the advantages and dangers of long-term stock market investing. Fundamental Analysis or Technical Analysis 1. What is Fundamental Analysis and Technical Analysis? 1.1 What is Fundamental Analysis?
  • 2. What is Fundamental Analysis? Fundamental analysis is used to assess stocks by attempting to calculate their intrinsic worth. Fundamental analysts research everything from the broader economy and industry circumstances to particular firms’ financial soundness and management. Fundamental analysts scrutinize earnings, costs, assets, and liabilities. Related Course: Macro Fundamentals Trading Course 1.2 What are the Different Types of Fundamental Analysis? Fundamental analysis is classified into two types: qualitative and quantitative. The qualitative approach is influenced by goodwill, market circumstances, brand value, and corporate performance. Quantitative analysis, on the other hand, is based on statistics. 1.3 What is Technical Analysis?
  • 3. What is Technical Analysis? Technical analysis varies from fundamental analysis in that traders seek to spot opportunities by examining statistical trends such as price and volume changes in a stock. The underlying premise is that all known fundamentals are priced in, hence there is no need to pay careful attention to them. Technical analysts do not attempt to calculate the inherent worth of a securities. Instead, they utilize stock charts to spot patterns and trends that indicate how a stock will perform in the future. 1.4 What are the Different Types of Technical Analysis? Technical analysis charts are classified into three types: candlestick, bar, and line charts. They’re all made using the same pricing data but present it in different ways. 1.5 What is the difference between Fundamental Analysis and Technical Analysis?
  • 4. What is the difference between Fundamental Analysis and Technical Analysis As shown in the table below, Fundamental Analysis and Technical Analysis differ greatly: 2.Which is better: Fundamental Analysis or Technical Analysis? In trading and investing, neither Fundamental Analysis nor Technical Analysis is completely reliable. Both traders and investors must study these two methodologies based on their advantages and disadvantages to determine which is the most appropriate for them. 3. How to Integrate Fundamental and Technical Analytics in Your Trading Strategy?
  • 5. How to Integrate Fundamental and Technical Analytics in Your Trading Strategy Fundamental and technical analysis can be combined in a variety of ways. The following are two instances of how three distinct technical analysis methodologies may be used with fundamental analysis to generate better insights: • Using range bound trading in conjunction with fundamental analysis • Using oscillators in conjunction with basic analysis 3.1 How to use range bound trading in conjunction with fundamental analysis? In a strong up trending market, traders want to enter or purchase at the lowest feasible price to maximize their profits. News developments, on the other hand, can destabilize a range-bound market. In this situation, the trader would avoid open deals near the time of the news announcement (due to low retail sales’ and ‘durable goods orders’ data). The chart clearly demonstrates this disturbance, following which the price level recovers to previous range bound levels.
  • 6. How to use range bound trading in conjunction with fundamental analysis 3.2 How to use oscillators in conjunction with basic analysis? Oscillators are often used as technical instruments for detecting short-term overbought/oversold circumstances. There is an example of employing an RSI indicator (technical indicator) in conjunction with a Non-farm Payroll (fundamental indicator) data release, one of the most important fundamental indicators in US history, in the chart below.
  • 7. How to use oscillators in conjunction with basic analysis 4. To sum up: Key points about Fundamental Analysis and Technical Analysis. • Fundamental analysis is a process of studying securities in order to determine their inherent worth for long-term investment prospects. • While fundamental analysis seeks to determine the stock’s actual intrinsic value, technical analysis is used to determine the best timing to enter or exit the market. • Decisions in fundamental analysis are based on the information provided and the statistics examined. • Fundamental analysis considers both past and present data, whereas technical analysis solely considers historic data. • Fundamental analysis is founded on financial statements, whereas technical analysis is founded on price movement charts. • There are two typical ways to combine fundamental analysis and technical analysis:
  • 8. • Using range bound trading in conjunction with fundamental analysis • Using oscillators in conjunction with basic analysis Source: https://libraryoftrader.net/fundamental-analysis-and-technical-analysis