Fundamental Analysis vs Technical Analysis

Fundamental Analysis

is the evaluating of a market to measure its actual value, by examining related financial, political and other economic factors. Fundamental analysis studies anything that can affect the markets value. The end goal of it is to produce a point of view that an investor can use in the decision making process.

for example in cryptocurrency — fundamental analysis determines the health and performance of an underlying currency/coin by looking at key numbers and economic indicators, such as adoption rate. The purpose is to identify fundamentally strong indications at the projected growth/decline and usage in order to gauge a sense of potential direction in value. Investors go long on the Crypto’s that are strong, and short the Crypto’s that are weak.

Fundamental analysis uses real, public data in the evaluation. Although most analysts use fundamental analysis to value stocks, this method of analysis can be used for just about any type of financial market.

Technical Analysis

is the forecasting of future price movements based on an analysis and examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is likely to happen to prices over time, based on the potential of history repeating itself, or the use of self-fulfilling prophecies. Technical analysis uses a wide variety of charts that show price over time.

Technical analysis is applicable to Cryptocurrency, Forex, commodities, stocks or any tradable instrument where the price is influenced by the forces of supply and demand. Price refers to any combination of the open, high, low, close, volume, or open interest for a given market over a specific timeframe. The timeframe can be based on intraday (1-minute, 5-minutes, 10-minutes, 15-minutes, 30-minutes or hourly), daily, weekly or monthly price data and last a few hours or many years.

In my opinion, technical analysis is more useful than fundamental analysis and deserves more focus, but the two should be combined

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