Do you know what is the different between gambling and trading? Gambling is about luck, guesses and taking UNCALCULATED risk (although certain gamblers may claim that they do take calculated risk); whereas trading is about taking calculated risk with sufficient analysis (like using technical analysis) to make informed decision and profit from the market.
There are 2 types of market analysis:-
1) Technical analysis
2) Fundamental Analysis
Technical Analysis
Technical analysis is the study of the market trend based on historical data and the movement in the price to make some prediction on the upcoming trend. Charting will form the bulk of technical analysis.
Fundamental Analysis
Fundamental analysis is different from technical analysis as fundamental analysis will need to analyze those factors affecting the price of the equity or futures, especially on economic statistics. The rationale behind for analyzing the fundamental is economic rationale dominates price movements.
