| Which one is better. These are two different | | | | you will become. And because it deals with chart |
| theories about how the market works and how to | | | | patterns everyone who has a computer is on an |
| make money in them. Hard core Fundamentalist will | | | | equal playing field. |
| tell you Technical Traders can not possible make | | | | Now you may think chart patterns might not be able |
| money in the market. Hard core Technical traders will | | | | to help you, but you would be wrong. They have |
| tell you Fundamental Analysis isn't worth the effort. | | | | helped millions make money in the market. They also |
| So, who is right? Let us take a look at both of these | | | | make sense. |
| theories. | | | | If you see a stock bounce between $45 and $60 |
| We will start with fundamental analysis. This involves | | | | continuously and it is at $45 you would assume that |
| looking at individual companies. You must look at a | | | | it is going to go up. Why? Because it has always |
| company's financial statement. You must also be | | | | bounced off of $45 in the recent past. In fact every |
| aware of any news that comes from the company. | | | | time it gets to $45 most people consider the stock |
| The whole theory behind this is if you find high | | | | undervalued and buy it. Also where do you think the |
| quality companies and buy their stock it will eventually | | | | stock will most likely go? $60,right?Why? Because it |
| go up. After all if a company is a great company its | | | | always has in its recent past. |
| stock should go up. | | | | There are hundreds of chart patterns out there that |
| The problem with Fundamental Analysis is that it | | | | have been tested numerous times by numerous |
| favors the large investors. Think about it, if you are | | | | people to be true. |
| investing billions of dollars in a company you can | | | | Most technical traders do not concern themselves |
| afford to spend millions to find information about that | | | | with a company's fundamentals. This is because they |
| company. You can also talk directly to the CEO's of | | | | don't really need to. Most of their trades could only |
| the companies that they are thinking about investing | | | | last 1 or 2 months. Remember Fundamental Analysis |
| in. This gives large investors an unfair advantage. | | | | can find strong stocks that may eventually go up in |
| Technical analysis however does not give anyone an | | | | the long term. If you are only in a trade for 1 month |
| advantage. It is all about chart patterns. The more | | | | it may not be worth looking into. |
| you learn about chart patterns the better an investor | | | | |