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Fundamental vs Technical Analysis - For Beginners

TrafficSwarm member since August 2010
Fundamental analysis is the study of a company, market or economy to evaluate it's history, current standing, and value. This may include studying financial reports, earnings, sales, assets, etc.. Most investors will say that they are fundamental analysts.

Technical analysis is the study of market data (market in this case could an individual stock like Apple or broad index like NYSE) from charts to evaluate a markets standing and potential direction. This may include studying trends, patterns, indicators, price, volume, etc.. Most traders will tell you that they are technical analysts.

Visit this link to get a more concise definition of the two:

As a trader, I major on technical analysis being that most trades are short term speculators (1 day, 1 week, 1 month). Investors are usually in for the long haul (years). But don't get me wrong, for a professional trader need to consider the fundamentals of whatever market he/she trades, i.e. not to or to trade around an earnings report or knowing which stocks were upgraded or downgraded. Fundamentals can affect short term results.

A successful investor still need to consider some technical analysis as well. For instance, he/she would want to buy a company of good value or undervalued (the fundamentals) yet, at a strong support level (the technicals).

So to conclude, both are important. To learn more about trading go to

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