When it comes to analyzing individual trading instruments, whether they are stocks, indices, commodities or Forex, there are two basic ways you can go:

  • fundamental analysis

  • technical analysis 

Fundamental analysis

It is based on the assumption that price (for example, the shares of a particular company) does not necessarily reflect the true intrinsic value of the underlying business. Fundamental analysts use valuation metrics and other information to determine if a stock has an attractive price. It is intended primarily for investors who are looking for long-term returns.

Technical analysis

It generally assumes that the share price reflects all available information and that prices generally follow trends. In other words, by analyzing a stock's price history, you can predict its future pricing behavior. In practice, it is about working with graphs, which is quite demanding and requires sufficient knowledge and experience. If you've ever seen someone try to identify patterns in stock charts or discuss moving averages, talk about technical analysis.


One of the important differences in these two analyzes is that the fundamental analysis is intended to find long-term investment opportunities, while the technical analysis usually focuses on short-term price fluctuations.

Listen to the experts

Many investors also use the recommendations of financial analysts to analyze stocks. Don't be afraid to keep track of what experts say from different companies. This will help you better understand the amount of information that is available and understand the way they look at the market. And ultimately, it will help your business in particular to find the method that best suits your financial goals.