The Difference Between Fundamental and Technical Analysis

in #crypto6 years ago

Technical examination takes a look at the value development of a investment securities and use this information to anticipate future value developments.

Fundamental examination rather takes a look at monetary and money related elements that impact a business or the currency.

These two methodologies vary, the feedback against technical examination, and how fundamental and basic investigation can be utilized together.

Fundamental analysis is the long term approach to reading charts. Comparing that to the short term approach which is taken by technical analysis. Charts can be determined by weeks, days, or even minutes, fundamental analysis looks over data from the months, quarters or even years.

Fundamentally focused traders often wait for currency or business to be out for a while to judge the company's intrinsic value is reflected in the market. Part of the reason that fundamental analysts use a long term timeframe, is because the data they use is to analyze a cryptos on a long term scale comes at a slower pace, because a company or crypto cant create a new product or emerge with a new strategy over night to improve itself.

Technical analysis and fundamental analysis have different goals. Technical analysts focus on identifying short to medium term traders where they can a flip on.

Now the big question is can both of these co-exist? The two methods of trading are often seen as opposing approaches to analyze. Because a fundamental trader would at times undervalue the crypto to find a entry point. This often works best when coins are oversold.

Technical traders look at charts, candlesticks, trends, patterns etc... to see where market prices are heading.

Here's a topic for discussion.
Which do you use? both? What sort of indicators or signs do you take into account?

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I think that both schools of thinking are very important. I am 26 years old and have been using technical analysis to trade and invest since I was 19. But over the last year or so, I have gained a deeper appreciation for fundamental analysis. I have gotten better at fundamental analysis recently; and combining that with my technical analysis knowledge has significantly improved my trading.

Traders and investors can do well with just one or the other. But I believe the best thing to do is to get really good with one of the two (I prefer TA), then start to develope your skills in the other (in my case FA).

For example, I post daily charts on semiconductor stocks and cryptocurrencies because I am fundamentally bullish on them. But I use the charts to pinpoint my buy areas when they go down in price. So that is an example of how I am using both schools of thought.

If properly applied from both schools one can gain a sort of security when buying. Great response. I'm glad people are educating themselves and getting more involved with thier trades instead of blindly buying.

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