There are two kind of basic approaches used to invest in stock market: technical analysis and fundamental analysis. Both of them seem to be functional depending on the time factor.
In fact, in trading, we can decide to invest both in the short term ( few minutes ), both in the medium term ( days or weeks ), both in the medium to long term ( weeks or months ). For long term investment we must use fundamental analysis, thanks to this approach we can define the market at the macroeconomic level, and so, we can predict possible scenarios that need more time than the ones that occur in a week or in a few hours.
TECHNICAL APPROACH ADVANTAGES
The advantages of the technical analysis are numerous, the most important is connected to being able to follow a trend market at the beginning of its formation, in fact, in technical analysis, the market can’t be predicted, just followed. The multiple indicators that can be used in technical analysis give the possibility to the trader to invest obtaining the odds in favor.
FUNDAMENTAL ANALYSIS ADVANTAGES
Fundamental analysis allows us to be able to predict economic scenarios that we can’t obtain or at least explain thanks to technical analysis. The fundamental approach can explain price movements when they result moved by major macroeconomic data.
Both approaches result to be functional, some traders believe that the technical approach is more secure than the fundamental one, but both of them can give very satisfactory results, used synergistically