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  • Essay / The merits of technical versus fundamental approaches to...

    Investing and trading have existed in various forms since the invention of money, but for the purposes of this article I would like to examine narrower, purpose-specific definitions for these terms. In the financial sector, investment is generally understood as a long-term duration of 1 to 10 years. But trading can last from a few milliseconds to more. The goal of investing and trading is the same: to make money or to hedge risks. The question this article wishes to investigate concerns the merits of technical versus fundamental approaches. Fundamental Investing (FA) Investopedia defines fundamental investing as: “A method of evaluating a security that involves attempting to measure its intrinsic value by examining associated economic, financial, and financial factors. other qualitative and quantitative factors. Fundamental analysts attempt to study anything that can affect the stock's value, including macroeconomic factors (such as the overall economy and industry conditions) and company-specific factors (such as financial condition and management ). The end goal of fundamental analysis is to produce value. which an investor can compare with the current price of the security, in order to determine what type of position to take with that security (undervalued = buy, overvalued = sell or sell short). This method of stock analysis is considered the opposite of technical analysis. such as past prices and volume. Technical analysts do not attempt to measure the intrinsic value of a security, but rather use a cha...... middle of paper...... dice are rolled or the wheel is spun. But over a large number of bets, wins and losses average to an outcome that can be predicted, even if the outcome of a particular bet cannot be predicted (Fig. 3.8). Casino operators ensure that the odds are equal. 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 throws of the dice or 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 results are something that can be predicted. This is why classical laws work for large systems. But when the universe is very small, like it was near the big bang, there are only a small number of dice rolls, and the uncertainty principle is very important..”