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Fundamental and Technical analysis are two major schools of thought when it comes to approaching the markets, yet are at opposite ends of the spectrum.
Fundamental analysis evaluates stocks by attempting to measure their intrinsic value. Fundamental analysts try to determine a company’s value by looking at its income statement, balance sheet and cash flow statement.
Technical analysis differs from fundamental analysis, in that traders attempt to identify opportunities by looking at statistical trends, such as movements in a stock’s price and volume.
Technical analysts focus on scrutinizing the chart itself for patterns to predict future price movements.