| Stock analysis is a tedious job but understand | | | | sell them if the stocks are overvalued. This |
| how to analyze them can prevent you from | | | | approach also known as value investing, made |
| losing money in stock market. These two | | | | popular by Warren Buffet and his Gurus. |
| methods will do exactly that. | | | | Technical Stock Analysis |
| Fundamental Stock Analysis | | | | Technical analysis, on the other hand, focus on |
| Fundamental analysis used to discover stock's | | | | market sentiment. The idea is to study market |
| fundamental values. How the business is doing, | | | | behaviour and take advantage from other |
| how competitive are they and what is going to | | | | investor's greed and fear. Seasoned technical |
| happen in the future are some of the questions | | | | analyst can tell you how the market is doing now |
| need to be answered. The objective is to reveal | | | | and what the stock price will be tomorrow. |
| stock's profitability and management efficiency. | | | | They make money out of human's emotion. |
| How do you know if the stock is profitable? | | | | But how they did that? |
| How do you know if the board of management is | | | | The secret lies in the stock price. |
| efficient? | | | | Expert stock traders use several of technical |
| You will find answers to both questions in annual | | | | indicators to understand market behaviour; |
| reports. | | | | Relative Price Index (RSI), Moving Average |
| Balance sheet, income statement and cash flow | | | | Convergence Divergence (MACD) and Average |
| statement is the most critical part in any | | | | Directional Index (ADX) to name few. They also |
| corporate annual reports. Mathematical formulas | | | | use trading chart to visualize the price patterns |
| or known as key financial ratios will help you to | | | | such as Japanese Candlestick. |
| identify if the stock is worth investing. Besides, | | | | Either you are prefer swing trading, trend trading |
| these financial ratios can be used to value stocks | | | | or momentum trading, combining fundamental |
| as well. | | | | analysis with your trading style will only make you |
| Once you know value of the stocks, you can | | | | rich faster. |
| make money by buying undervalued stocks and | | | | |