Investing and Financial Markets

How does technical analysis differ from the fundamental analysis?


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2010-10-01 10:26:47
2010-10-01 10:26:47
Technical vs. fundamental analysisThe primary difference can be summed up in terms of both the underlying philosophy, and the data studied.

Fundemental analysis is concerned chiefly with discovering asset values. The data relied upon includes off exchange sources such as balance sheets, income statements and supply and demand statistics.

Technical analysis on the other hand, is concerned chiefly with the timing of buy and sell decisions. The data studied is generated exclusively by the exchanges.

Where does investor sentiment fall within these two definitions? If the sentiment data is derived from options data, then it would fit the definition of technical analysis. If on the other hand the data was generated by opinion polls, then it would not fit the definition of technical analysis. Nor would it be considered fundamental analysis either. It would more properly and simply be defined as "sentiment analysis."

While there is some debate over whether off-exchange data (e.g. astrological data, dividends, opinion polls, etc.) properly belong under the definition of technical analysis, none of the main organizing bodies for technical analysis have ever rendered an official, public opinion on this question.

According to noted technical analyst Daniel Chesler, CMT --

"Technical analysis is the forecasting of markets through the study and analysis of data generated exclusively from the buying and selling of financial instruments. It is part science and part formalization of trader intuition and experience. Any market for which there is a regular, transparent transaction history is a candidate for technical analysis. Planetary cycles, opinion polls, fundamental, monetary and economic data as well as any data not specifically generated from the buying and selling process, are not a part of orthodox technical analysis."


Related Questions

Fundamental analysis refers to analyzing the company's products, its market share, its management, its strategy, its financial and other related information. Technical analysis only looks at the financial charts of the company's stock and not its underlying fundamentals.

Fundamental analysis is the art of looking at a company business history such as earnings, dividends, bisness sector, etc to try to predict the future direction of the company's stock. Technical analysis is looking at the chart of the company's stock and trying to predict the direction of future movement based on technical analysis without regard to the fundamentals or business of the company.

There are many sites that give you technical and fundamental analysis on the forex markets.

Forex strategies are used to make a profit from trading currencies on the forex market. Mostly they are divided into 2 categories: strategies based on technical analysis and strategies based on fundamental analysis. Technical analysis involves trading charts while fundamental analysis is used by traders who want to base their trades on the events that happen in the global economy.

Fundamental and technical analysis are two different methods used to evaluate the merits for purchasing the stock of a company. Fundamental analysis includes analyzing a company's financial statements including the balance sheet, income statement, and cash flow statement. Potential investors in a stock will also look at fundamental factors such as the company's market share, competitive advantages, quality of management, sales trends, projected earnings per share growth, and macro economic factors affecting the industry that the company operates in.Technical analysis involves looking at stock chart patterns to discern the future movement of a stock's price. Proponents of technical analysis argue that fundamental factors are already reflected in a stock's chart pattern. Both methods of stock analysis have merit and many analysts combine both techniques when evaluating the investment merits of a particular company.

Forex fundamental analysis is about identifying and measuring the factors that affect the fundamental worth of financial instruments.

Fundamental in the long term, technical in the short term.

Whereas the TWhereas the Trend, Overbought/Oversold, and Volatility gauges are based on Technical and Fundamental analysis, the Market Sentiment indicator is unique in that is it is based solely on sentiment or what other traders 'feel' about the market.rend, Overbought/Oversold, and Volatility gauges are based on Technical and Fundamental analysis, the Market Sentiment indicator is unique in that is it is based solely on sentiment or what other traders 'feel' about the market.

Concerning investing fundamental analysis is a method of evaluating a security by attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. More on fundamental analysis can be found at

Top down: you look at the market as a whole (principal economic factors and data) them you narrow down until your industry etc. etc.Fundamental: you look at the principal ratios of a company compared to the industry. You look at the level of debt, profitability etc. etc. Basically you look at how the company performs in terms of financial performance. Fundamental analysis is the opposite of technical analysis which is just looking at trends and mathematical expression to forecast what is going to happen with a stock.Top down fundamental analysis is just the 2 combined.hope this will help !Cheers,

Technical Analysis is not a game. It is the scientific way to win Stock Market.Meet TAKIT Professional, the ultimate technical analysis software for Day trading. It does all the analysis job for you and show the best opportunities to trade on intraday.

Stock fundamental analysis is insight on the opportunities of a potential stock. It is an in depth examination of a companies profile. Stock fundamental analysis can be beneficial due to the fact that it can give potential investors a better informed decision in their stocks.

TAKIT Professional, the ultimate technical analysis software for Day trading. It does all the analysis job for you and show the best opportunities to trade on intraday.

A Forex technical analysis can be found at Investopedia, Dailyfx, and Forex Cycle. These places can provide both an analysis as well as basic information.

A website you can use to get a grasp on stock technical analysis is Read the FAQ to get an understanding of the site's layout.

The simple answer? To make money. Speculators in the stock market try to predict price movements of common stocks so as to profit from them. Speculators primarily rely on Technical Analysis on their buy and sell orders. Investors, differentiated from speculators, primarily use Fundamental Analysis.

When investors analyze their equity investments they tend to complete one or another type of analyses. These two different kinds of analysis are called technical analysis and fundamental analysis. Some investors rely solely on one or the other type, while some do a bit of both and hope to come out on top by employing technical trading tools and a sound fundamental analysis of the financial position of the underlying company. In this post I’d like to talk a little bit about technical analysis. Technical analysts relay heavily on charts and graphs. In the past, they used to be called “chartists” because of their seeming over-reliance on market charts and graphs. It’s true that a lot of charts and graphs go into technical analysis, but it’s more than just looking for patterns in chaos. Underneath the hood of technical analysis lies four main assumptions that actually lend it some credence. 1. Market prices for assets are determined by supply and demand. 2. All thought about the pricing of an asset, both rational thought and irrational thought, are already reflected in the asset price – including that of the fundamental analysts who study the financial statements of the underlying company. 3. In general, asset prices move in trends. 4. Trends will shift due to shifts in supply and demand and these shifts themselves are detectable in the market. Technical analysts rely on tools with arcane names like momentum oscillators, support and resistance lines, Bollinger bands, moving averages, candlestick charts, and trading volume levels; all of which use these four assumptions as their underpinning. There are, of course, those who claim that the only way to truly analyze an equity asset is to perform a thorough fundamental analysis of a company’s financial statements and use financial modeling techniques. These contrarians argue that technical analysts are wasting their time looking for patterns in the chaos, like someone seeing the Virgin Mary in their breakfast toast. The question of which camp is correct will probably continue to be one of the ongoing debates in the financial field for some time.

Audience analysis is a task that is often performed by technical writers in a project's early stages.

A place where a person can find a technical analysis of the stock market is at the website StockCharts. Other places to look is the website DecisionPoint, StockTA, and LiberatedStockTrader.

Stock Fundamental Analysis (SFA) is when you use your funds to analyze the stocks. You can buy and sell small companies to see how they are doing, then move onto the bigger companies with the information you have learned.

The bottom line, how much money an investor makes, is the sole value of a stock fundamental analyst. The best tool you can use is stock fundamental analysis. Many investors use this tool as their sole analysis for their investment. Benefits are wide open to anyone that can advise an investor on this tool alone and the investor makes money.

Technical feasibility is a measure of the practically of a technical solution and the availability of technical resources and expertise. Normally, technical feasibility addresses three major issues

I would say technical architects...


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