When it comes to stock trading and investing, people usually make use of certain methods that they think will help them find stocks that are worth investing. In general, there are two methods that most people use determine attractive stocks. They may either use fundamental analysis or technical analysis to look for good stocks in the market to invest in.

These two methods in determining good stocks in the market are different in terms of how they evaluate stocks to trade and invest in. getting to understand them will enable you to further assess just what method works best to your own means in determining good stocks.

Fundamental Analysis

Fundamental analysis is a method that involves evaluation of a certain stock by means of estimating its value through analyzing the characteristics of a company. Fundamental analysis delves heavily in evaluating the company behind the stocks. They look into whether the company that a certain stock represents is considered financially strong and stable.

Technical Analysis

Technical analysis, on the other hand focuses more on the price movements of a certain stock in the market in order to determine its value. This method doesn’t try to look into the inherent value of the company that the stock represents. Looking at the price movement of the stock in the market and analyzing the trends would be enough to determine value.

Main Differences

Fundamental analysis looks more into the stability of a certain company to determine which stocks are worth investing in. People who use technical analysis , on the other hand believes that the value of a company may already be reflected in the stock price and how it moves in the market. Its price movement may be enough to determine the worth of the stock and whether it may be good enough to invest into.