how to do technical and fundamental analysis?

<p id="isPasted">In fundamental analysis, companies are examined to see if they offer strong growth potential at a good price, as well as the industry and economic conditions at the time. The fundamental analysis is commonly used by investors to identify longer-term investments, using metrics like earnings per share, price-to-earnings ratio, price-to-earnings-growth, and dividend yield.</p><p>Technical analysis, on the other hand, ignores the fundamentals of the underlying company, looking instead for patterns on charts that might indicate the future price and volume movements. The reasoning here is that stock prices already reflect all the publicly available information about a company, so it makes little sense to examine its balance sheet. With a focus on volume and price moves, short-term traders typically use technical analysis.&nbsp;</p><p>Fundamental analysis and technical analysis usually aim to achieve different goals. Technical analysts look for many short- and medium-term trades where a stock can be flipped, while fundamental analysts focus on a stock's underlying business. A good way to conceptualize the difference is to compare it to someone who is buying a home for potential flipping to someone who is buying a home for long-term habitation.&nbsp;</p><p>According to fundamental analysis, investors purchase stocks when the market price is less than the intrinsic value of the stock. On the other hand, in technical analysis, the stock is bought by traders when they expect that it can be sold for a higher price.</p>

<p>Traders have traditionally used fundamental analysis for longer-term trades, relying on metrics such as price-to-earnings ratio, price-to-earnings growth, and dividend yield. On the other hand, technical analysis, bypasses the underlying company’s fundamentals and instead looks for statistical patterns on stock charts that might foretell future price and volume moves.</p>

<p id="isPasted">Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect currency prices.</p><p>Technical analysis involves pattern recognition on a price chart. Technical traders look for price patterns such as triangles, flags, and double bottoms.&nbsp;</p><p>As well to using charts to study market prices, technical traders also use technical indicators, such as Moving Averages Relative Strength Index (RSI), and Bollinger Bands, to develop their technical trading tactics.</p>

<p>Technical analysis is very important to keep focus on the market’s behaviour, however it certainly does not explain the reasons it's behaving this way. Behavioural finance and Behavioural economics are the fundamental field of interest that should be studied to trade on the financial markets.</p>

<p id="isPasted">The debate over technical and fundamental analysis is contentious. It is common for proponents of either form of analysis to disregard the alternative, but they fail to understand that they can both be effective. Technical analysis and fundamental analysis are most useful for short-term trading and market timing, respectively. They can also be combined for medium and long-term planning and investment execution.&nbsp;</p><p>Supply and demand determine short-term price movements, which are in turn influenced by far more than what is considered fundamental. Price and volume data are the only ways to analyze market sentiment and the impact of emotion on market activity. Similarly, charts can't determine if a stock is undervalued or overvalued, or what it may be worth years from now. Charts reflect past events and their value diminishes over time.</p>