How do traders perform analysis on stocks? Is it different from FX analysis?

Category: share-faq

Broadly speaking, there are two main types of market analysis, technical and fundamental. 

Technical Analysis

Technical analysis is simply the study of price action on the chart. Technical analysts do not concern themselves with geopolitical news, economic data, or anything else other than what the chart itself says.

Fundamental Analysis

Fundamental analysis does differ between asset classes because you’re dealing with the fundamentals of supply and demand, as well as the economic inputs and broader conditions that influence a specific asset’s value. For FX this may be interest rates and other economic data, for crude oil it tends to be inventories and new wells. In the case of shares, traders pore over the financial statements of the companies they are trading, which those companies are obliged to provide.