By the way, what is fundamental analysis?
Fundamental analysis is another approach to study and invest in the markets. By and large, it assesses a company’s financial condition. Proponents of this theory read and interpret balance sheets, income and cash flow statements and other financial and statistical ratios in order to anticipate future earnings and ultimately price appreciation or depreciation. While we are not opposing the role and influence of fundamental analysis and openly admit that it can and does affect market behavior, we believe that all the relevant information for efficient trading is already included in the daily prices and all the news plus the financial indicators are perfectly reflected in the day-to-day price movement. The news makes the price and the price makes the news. We, as pure chartists, are strictly interested in where on the chart the price is at this very moment, where it can take us and where we can get on and off board profitably. Technical analysis provides us with quick answers.
Related Questions
- I have been investing in stocks using fundamental analysis, how would technical analysis help me in taking better decisions as compared to fundamental analysis ?
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