This section deals with two main analysis – Fundamental analysis and Technical analysis . Fundamental analysis is done by those who are experts and who want a detailed background of the company they are investing . they deal with qualitative and quantitative aspects . Input data required for fundamental analysis is type of company, number of employees, number of clients, new acquisitions, profits ,competition, R&D plan. Technical analysis involves following the market . It uses charts and other tools to identify patterns that can suggest future activity. Technical analysis really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. It attempts to understand the emotions in the market by studying the market itself, as opposed to its components.
Technical analysis is based on demand and supply, which can be derived from traded Price and Volume.
We then read about three main charts where data can be easily represented and read .
Line charts can be misleading as it cannot be foretold whether for a particular period it is positive or negative . Nothing can be foretold from the points .
In bar charts , it can be easily represented as positive or negative .
Candlestick charts show a proper graphical representation . Large amount of traders use this .
, , Basics of Analysis, Bar chart, Candlestick chart, fundamental analysis, price change, technical analysis, types of charts - line chart
Hi,
Answering to the question 1 :: What are the benefits of penny stocks?
There is no benefits, Penny stock is basically attractive but we recommend to stay with penny stocks.
Answering to the question 2 :: Should fundamental analysis be made compulsory from future?
Fundamental analysis is superior to Technical analysis to valuate the company but Fundamental analysis needs interactive data from the company, only previous date is not enough.