Understanding Fundamental and Technical Analysis

September 27th, 2008

Whether you’ve been investing for a long time or you’ve just started, there is always something to learn and improve on. Practicing virtual stock trading is crucial, but improving your investing and trading knowledge is as important to improving your stock picking skills.

In general, there are two different concepts for analyzing a stock. The first one is the fundamental analyses, which focus on fundamental parameters of the company such as its financial strength, earning growth prospects, quality of management, products or services, and other. This method is based on the underlying assumption that price follows value, which means that the price of the stock will eventually represent the true value of the business.

The other method, technical analysis, on the other hand, examines technical properties of the stock, such as its price fluctuations, changes in volume, and other issues. This method assumes that past behavior of the stock can be used to predict what will happen in the future if similar patterns are repeated.

More explanations of fundamental analysis and technical analysis are available in our blog. It would take me far too long to explain these concepts in more detail. So, let’s let the nice instructors from zecco explain these issues further.

Fundamental Analysis

Technical Analysis

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Entry Filed under: Stock Investing Ideas