What is the difference between technical analysis and principal analysis (bitcoin forex gold stock trading)

    In financial market analysis, there are two approaches commonly used to determine transactions. It is either stock trading or stock trading. Foreign currency trading or foreign exchange. The analysis is Fundamental Analysis or what is usually abbreviated as FA and Technical Analysis which is usually abbreviated as TA.

(bitcoin forex gold stock trading)

    This article describes FA and TA. What's the difference between the two? Also, which method is better? The first thing I want to talk about is FA. What is Fundamental Analysis? Well, as its name suggests, FA is an analytical approach that evaluates an object such as a firm, currency, or community based on two aspects.

    The first is its intrinsic value and the second is the influence of the external environment on the object. So what do we mean by intrinsic value? Well, it's easier to imagine if you explain it in context first, so this time I'll explain it in the context of stocks. Fundamentally, buying stock in a company is like buying a company that you believe will continue to grow. That means you have a clear reason for wanting to buy the stock.

    Because we believe in the business model and the competence of the management team. Therefore, we believe the company has intrinsic value that will allow us to grow rapidly and one day we will be able to sell our shares at a higher price. Basically, what we want from FA is a good deal. Companies whose management is trusted to make good business decisions and execute business plans effectively manage their resources.

    Companies with healthy cash flow, high profit margins and reasonable debt ratios. All of these are reflected in various gauges. For example, a financial report displayed every three months. These financial reports tell us whether the company has good management skills. Can you win big? What is your debt ratio?

    healthy or not? And so on, it's from the performance side of the company. On the other hand, you can also see the impact of the external environment on your business. For example, from business competitive conditions. What about industry? It also explains how market conditions may develop in the future. For example, can you see the trends towards the pervasiveness of the internet and everything that is now all digital, will it benefit your business or is it a threat to your business?

    Because I also know there are a lot of businesses out there that are actually doing pretty well. However, its unwillingness to accept new innovations and business competition led its stock price to eventually fall. Fundamentally, we judge stock valuations based on a company's performance and ability to adapt to changes in the external environment.

    In fact, the same principle applies to other financial markets. For example, when buying foreign exchange, certain commodities, and even cryptocurrencies. For example, in the context of investing in foreign currencies, those who take the fundamentals approach are actually analyzing the country's trade balance. And they firmly believe in the country's economic growth potential.

    Based on this analysis, they buy the country's currency. Similarly, in the fundamental analysis of the cryptocurrency world, for example, who was buying bitcoin while the price was still below 500,000. They perused the white paper and really believed in the concepts presented. That's my explanation about FA. Now you can imagine how the principle works.

    Oh yeah, there are actually several FA indicators that we have discussed in this article. I'll post the link in the description later. Now let's move on to technical analysis. What is technical analysis? So TA is really a way of estimating the direction of price movement reflected in charts and trading volumes using a particular indicator.

    So you may have seen stock and forex traders happily working with screens displaying graphs like these, but what do they actually mean? ? The story goes something like this: In financial markets, millions of sellers and buyers transact every day, every minute and even every second.

    So these sellers and buyers are actually competing on online prices. Now, for example, in a stock X trade, he has two groups, a buyer group and a seller group. The buy pool offered a price of IDR 1,000 per share for company X shares, while the sell side offered a price of IDR 1,050 per share. At some point, there must be someone, be it the buyer or the seller, who will be unforgiving to change the offer.

    For example, we meet at a price of Rp, and this price will be the stock price benchmark for subsequent trades. Now think of the world of online trading as a huge marketplace with hundreds of thousands or even millions of people. Part of the World Price fluctuations seem to continue every day, every hour, even every minute, forming patterns that can be learned. Where the patterns form actually represents the psychology of the traders who continue to compete on price decisions every day.

    This price movement pattern is ultimately studied and used as a basis for analysis using indicators based on a specific formulation. What is your goal? Of course, so that we can predict at which price level the price will reverse from the previous one. At some point the level goes down and eventually goes up again.

    Now, these reversal points are what are usually known as support and resistance points. Basically, traders using the TA approach rely on signals from technical indicators that they believe can predict turning points. to make buying or selling decisions. Therefore, you can buy certain stocks or commodities at a relatively low price and sell them at a higher price. Well, there are many technical indicators that are usually used to predict price movements. For example, trend lines, moving average candlestick patterns, relative strength indices, Fibonacci retracements, and more. Now, I'm sure many of you are still unfamiliar with these terms. It's okay. Please relax. I promise to explain these indicators in detail in the next few videos. Another interesting thing about this TA is that it's fairly universal. This means that the application of technical analysis can be used in various financial markets related to stock trading, forex, cryptocurrencies, etc.

    So although the term is knowledge, it can be used in all financial markets. Well, I hope you have a better understanding of what technical analysis is. The question now is which one is better? Fundamental analysis or technical analysis? answer? Basically we are talking about the basic method or the technical method, so you can choose which one you think is more suitable for you.

    We have characters who are very investigative, like digging through financial reports, reading the daily news, and watching the economy. Such people are better suited to apply the fundamental analysis approach. Those who use the FA approach are typically good at finding good business prospects and raw materials that many will need in the future.Uniquely, they are more patient and less in a rush for short-term profits . Yes, because they believe in the prospects and potential of the companies and products they invest in. Also, people who use FA are usually looking for long-term investments and don't really care about short-term price fluctuations. On the other hand, technical approaches are best suited for those who are sensitive to short-term price movement patterns. People who fit the TA are usually very disciplined. Because doing TA requires developing sophisticated trading plans and measurable funding and risk management. Therefore, the most important skills when it comes to technical analysis are discipline, consistency, and the ability to commit to your own designed trading plan.

    So if FAs are long-term oriented, if these techies usually focus on short-term trading, they usually don't really look at the fundamental aspects of what they're trading, but only on patterns of price action. Focused. Those are the qualities that set them apart. Who is compatible with FA, who is compatible with TA, what is the difference between FA and TA? Leave your comment now in the comments section. Which method is better? Fundamentally or technically? Well, I hope my discussion is helpful. See you in the next article. There are endless ways to talk about money, so try to stay with articles that talk about money!

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