What is the difference between technical and fundamental analysis ?
What is the difference between technical and fundamental analysis ?
Many investors are confused between two terms - technical analysis and fundamental analysis.
Fundamental analysis of a company seeks to make a studied guess on the cash flows of a company based on how the economy, industry and the company will perform. Once this is done, the investor gets an idea of what the company/stock is actually worth.
Technical analysis, on the other hand, is very different. It focusses on internal market data such as price and trade volume. The focus of technical analysis 
is on identifying patterns and trends that will repeat so that the trader can capitalize on them.
is on identifying patterns and trends that will repeat so that the trader can capitalize on them.
Here is a table enumerating the key differences.
Factor
|
Fundamental analysis
|
Technical analysis
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· What is
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· Calculate stock real value
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· Predict future price movement
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· Done with the use of
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· Financial data, company and sector information
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· Price, trading volume data
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· Time horizon for analysis
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· Long term
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· Short term
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· Suitable for
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· Investors
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· Traders
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