What is Technical Analysis?
Technical analysis is a method used by traders to forecast future price movements of stocks by analysing past trading activity. Chart patterns and statistical numbers are used extensively by technical analysts.
Fundamental analysis believes that the market value of a stock may not always match the true value of the stock. As a result, fundamental analysts try to calculate the intrinsic value of a stock and benefit by investing in undervalued stocks.
On the other hand, technical analysts believe that the fundamental elements of a stock’s value are already represented in the stock price. In addition, they believe that stock prices move in identifiable trends over a period of time.
As a result, they evaluate the past price patterns of stocks in order to find out how the stock price moves in the future.
Comments
Post a Comment