Technical analysis and fundamental analysis are the two different thought in the financial markets. Technical analysis looks at the price movement of a security and uses historical data to predict its future price movements. Fundamental analysis, on the other hand, looks at EIC (Economical, Industry and Company) factors known as fundamentals.
Basic differences:
1. Charts vs. Financial Statements
By looking at the balance sheet, cash flow statement and income statement, a fundamental analyst tries to determine a company's intrinsic value. While Technical traders, believe there is no reason to analyze a company's fundamentals because these are all accounted for in the stock's price.
2. Time Horizon
Fundamental analysis takes a relatively long-term approach to analyzing the market compared to technical analysis. While technical analysis can be used on a timeframe of weeks, days or even minutes, fundamental analysis often looks at data over a number of years.
3. Trading Versus Investing
In general, technical analysis is used for a trade, whereas fundamental analysis is used to make an investment