Chapter 4. Conventional Analysis
If you make your own investment decisions, you need to understand the methods available, especially those that have worked in the past, even if they go against your intuition.
Fundamental Versus Technical Methods
The two basic methods of analyzing stocks are fundamental and technical. Fundamental analysis is based on attempting to predict a security’s price outcome from capital and sales trends, and technical analysis is based on reacting to a security’s price behavior. Their philosophies differ in many other ways. For example, the technical approach is not interested in the security’s underlying value, whereas the fundamental analyst is obsessed with it. The fundamentalists believe that if they can determine what ...
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