In an effort to forecast whether a market or stock price will go down or up, people have availed themselves of a wide collection of tools and methods which fall in
three different categories:
Fundamental Analysis (FA)
FA uses financial accounting methods and tools, and a thorough understanding of a company's business model to establish the value of a company and the price of a share. It looks at a large collection of factors which may impact the present value of a share. Some of the professionals in this group are Cody Willard, Jim Cramer, James Altucher, Chris Edmonds, Arne Alsin, Tero Kuytinen. Many people in this group see TA as voodoo analysis because they don't understand it.
Technical Analysis (TA)
TA in its purest form completely ignores FA because it assumes that at a given time it would be impossible to know all the relevant factors determining the value of a share. Instead, TA looks at the footprints that the share price has left in a graph against various units of time such as weekly, daily, hourly, etc. To validate the movements in price, TA looks at volume of transactions at various price levels. Also, TA seeks to identify recognizable patterns such as Cup-and-Handle, Head-and-Shoulders, Bull-Flags, etc in the price charts which indicate likely movement and a
particular direction. Some patterns such as the formation of triangles in price channels may indicate forthcoming price volatility in either direction. Some of the professional in this group are Gary Smith, James de Porre, Dick Arms, Ken Wolff, Chris Schumaker, Alan Farley, Dan Fitzpatrick, and Jeff Cooper.
Indicator Analysis (IA)
IA is based on a large collection of measures deemed relevant as indicators of direction for various market indices, market sectors, and ETFs. Some of these measures are the number of stocks making new highs/lows, overbought/oversold oscillators, the Arms Index, the put/call ratio, and the VIX. Many indicators are used to complement TA thus many of the professionals in this group also use TA, including Dick Arms, Helene Meisler, and Richard Suttmeir-
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2 comments:
This topics and everything connected to them. I really appreciate it. .Please Give ur opinion about technical analysis in share market tips ?
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