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Technical
vs. Fundamental Analysis
Analysis software basically comes in two different flavours, being:
Technical analysis involves the analysis of price and
volume data as well as other related market indicators to determine past trends that are
believed to be predictable into the future. Charts and
graphs are often utilized.
Fundamental Analysis is valuation of stocks based on
fundamental factors, such as company earnings, growth prospects, and so forth, to
determine a company's underlying worth and
potential for growth.
In regards to analysis software and data feeds, as you can
see from the table below, most focus historically has been placed on Technical Analysis.
The reason for this is that the input data requirements to perform technical analysis are
far simpler then the data required to carry out Fundamental Analysis.
Technical Analysis basically requires only five pieces of
data, these being the Open, High, Low, Close and Volume value of a stock for the trading
period. All key technical analysis indicators are mathematically then derived from this
basic input data.
In stark contrast, Fundamental Analysts can utilise the
many thousands of pieces of raw information on a company to undertake analysis on a
company. Disseminating this amount of raw data to traders has historically proven
technically challenging for data vendors. Products like Paritech's MetaMarket Plus use
three tier technologies to deliver this data to traders.
Click here
for a breakdown of software by Technical and Fundamental Analysis criteria.
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Securities Types
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