Topic > Merits of the technical versus fundamental approach to…

Investing and trading have existed in various forms since money was invented, but for the purposes of this article, I would like to look at narrower definitions and specific goals for these terms. In the financial sector, investment is commonly understood as a long-term investment, from 1 to 10 years. But trading could last milliseconds and up. The goal of investing and trading is the same: make money or hedge risk. The question this article would like to investigate concerns the merits of technical approaches versus fundamental ones. Fundamental Investing (FA) Investopedia defines fundamental investing as: “A method of evaluating a security that involves attempting to measure its intrinsic value by examining its economic, financial conditions, and other qualitative and quantitative factors. Fundamental analysts attempt to study anything that can affect the value of the stock, including macroeconomic factors (such as the general economy and industry conditions) and company-specific factors (such as financial conditions and management's ultimate goal of execution). fundamental analysis is to produce a value that an investor can compare with the current price of the security, with the aim of understanding what type of position to take with that security (underpriced = buy, overvalued = sell or short). is considered the opposite of technical analysis."(http://www.investopedia.com/terms/f/fundamentalanalysis.asp)Technical Analysis (TA)Investopedia defines technical analysis as:"A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure the intrinsic value of a stock, but instead use cha... in the center of the card... you roll the dice or spin the wheel. But over a large number of bets, the gains and losses average out until they reach an outcome that can be predicted, even if the outcome of any particular bet cannot be predicted (Fig. 3 .8). Casino operators make sure that the odds are stacked in their favor. This is why casino operators are so rich. The only chance you have of winning against them is to bet all your money on a few rolls of the dice or a few spins of the wheel. It's the same with the universe. When the universe is large, as it is today, there are a very large number of dice rolls and the average of the results corresponds to something that can be predicted. This is why classical laws work for large systems. But when the universe is very small, as it was near the big bang, the number of dice rolls is limited and the uncertainty principle is very important.”