By 
Investing success, making money in stocks and accumulating wealth is everyone’s main goal. Reaching that ultimate retirement security goal requires an investment strategy that will make your money work hard for you while avoiding undue risks, setbacks, and losses. Technical analysis and fundamental analysis are the two key points for financial success, but they vary greatly in their investment approach.
Fundamental analysis focuses on the financial statements, the actual data, of the company being evaluated. To assess the value of a stock, fundamental analysis uses earnings, earnings, future growth, return on equity, profit margins, and other data to determine a company’s underlying value and future growth potential. Although fundamental analysis is important, most investors do not have the experience, desire, or time to examine a company’s finances in an effort to determine whether or not it would be a good investment. And with the accounting shenanigans that some companies have put in to cook the books, the fundamentals can seem pointless.
Technical analysis, on the other hand, is a method of evaluating values by analyzing statistics generated by market activity, such as past prices and volume. Some technical analysts do not attempt to measure the intrinsic value of a company, but instead use charts and other tools to identify patterns that may suggest future price movements. Technical analysis was introduced more than 100 years ago by Charles H. Dow from a series of Wall Street Journal editorials he wrote himself, which later became known as The Dow Theory. The basic factors of his theory have been valid for more than a century and are the basis of current technical analysis. Dow believed that the market discounts everything and this information shows up in price movements not only for the market as a whole, but also for individual stocks. Instant access to news in today’s world solidifies the fact that everything really is discounted in the price of a stock and the movement of the market.
However, the smart investor must always take a two-pronged approach to be successful. In other words, use some common sense. The basic and known fundamentals of a company are readily available and are revealed in the price-earnings ratio (PE) and earnings per share (EPS). To avoid companies that spend the night with no real profit, make sure the EPS and PE ratio are in line before putting your hard-earned money at risk. Then, with the proper knowledge of the Technical Analysis of the company and the market in general, a truly intelligent investment decision can be made.
There is an old saying: “If you want to know the truth, follow the money.”
It’s true; graphics are the mark of money. Technical analysis of charts not only reveals a stock’s current and past performance, but price action also gives the chartist a clear view of market sentiment and valuable information on future direction. All the necessary information is displayed on the graph. The price, volume, support, resistance, trends and much more. It is simply a matter of knowing how to correctly interpret the information. Thus, the informed investor can limit risk and invest at the most opportune moments avoiding falls, corrections and bear markets. By using time-tested analysis, readily available fundamentals, and some common sense, the individual investor can be successful in any market.