In any Stock Market in the world there are two types of analysis; typically the fundamental and the technical analysis. As the title of this website tells you, I’m a technical trader. There are no stronger or no correct believes in which trader has a better profit returns, nor there will be textbooks to teach you on either ways to achieve a better results. The truth lies in yourself, whether you believes in which types of analysis and that will do just fine.
Let me do a brief explanation what are the difference between fundamental and technical analysis:
Fundamental Analysis
These are people who believes in the company’s balance sheet. The first thing for fundamental traders are to look at the numbers, whether are they P/L looks good, whether P/E ratio is high, whether their gearing are high, comparing these data and much more with similar companies in the same industries. Once indentified, analyst will next use the price-to-book value and compare to the current stock price, anytime if the stock price falls below its book value is considered a good buy in the Market.
Technical Analysis
These are people who believes in stock prices. The first thing for technical traders are to pull out a historical price chart for that company, the purpose of the historical price chart is to compare and analysis the price movement and predict the future movement. This statement already tells you that technical traders believes past price pattern will project it again in the future. Another believes by technical traders will be the stock price moves ahead of the news, therefore by catching the price trend, the news which will come later is a confirmation of what they already predicted before.
