There are 2 methods of trading in a particular stock. And these methods are known as fundamental analysis and technical analysis.
There is a wide difference between fundamental analyst and technical analyst.
Fundamental analysis investors are those people who take the pains to do certain research about the stock. And then take decision whether to invest or not in a particular stock.
Technical analysis investors are the people who try to evaluate a particular stock and then take decision whether to buy a particular stock or not. They try to find a brief history of the stock and then only they take a decision of investing in a particular stock.
It must be noted that both the methods have their own advantages. Technical analysis investors would but those stocks in which a huge investment is done by other thinking that in future the value of these stocks would go high. These are the investors who follow the crowd and don't take pains to take their own decisions.
On the other hand fundamental analysis investors would take pains to do a brief research about a particular stock and then only they would take the decisions of buying that stock.
Some investor can become a specialist in any one the methods. They try to gain specialize knowledge of any one method. The investors who specialize in technical method are considered to be reliable tool. On the other hand fundamental investors consider this method to be superior to any other method.
Since the technical investors try to find he brief history of the stock so they able to predict the future price of the particular stock. This is the most important advantage of technical analysis. And this method is beneficial for short term and day traders. Where as fundamental analysis is beneficial to long term traders.
According to technical analyst a brief history of the particular stock gives the brief idea about its future performance. But according to IPO or mutual fund the history of the particular stock is not the best way to predict its future. Technical investor take look at the brief history of the performance of the stock but do not consider the other factors that might change the situation in the future.
Fundamental analysts are the investors who take care of factors that might change the price of the stock in future. One should try to gain the latest knowledge about a stock that he is willing to invest in.
Dr. Joshua Geralds is a successful Investment Specialist with over twenty years experience increasing the income of people world wide. For a limited time get his free Money Management to a Million Dollars e-course here: http://www.pipsalot.com
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