Question

How does technical analysis compare to fundamental analysis?

Answer 1

DIFFERENCE BETWEEN FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS

1. Fundamental analysis is long term in nature Technical analysis is short term in nature
2. Fundamental analysis considers total gain from equity investment consist of current yield by way of dividends and long term gains by way of capital appreciation Technical analysis does not distinguish between current income and capital gains. It is interested in short term profit.
3. Fundamental analysis uses tools of financial analysis, ratios and statistical forecasting techniques. Technical analysis mainly changes of financial variables besides some quantitative tools such as charting etc..
4. Fundamental analysis is designed to answer what to invest in? Technical analysis is designed to answer when to invest in ?
5. A fundamental analysis starts with the financial statements A technical analyst approaches a security from the charts.
6. Fundamental analysis tries to establish long term values. Technical analysis mainly seeks to predict short term price movement appealing the short term traders.
7. Fundamental analysis is used to make an investment Technical analysis is used for a trade.
8. Fundamental analysis is based on information external to market Technical analysis is based on information internal to market.