- It analyses all the factors that can affect the stock price of a company in future like financial, management, industry etc.
- Fundamental approach is used for long term investments.
- It gathers data from financial statements of the company along with other economic news sources.
- It also uses various fundamental indicators for example, PE RATIO, PB ratio, Debt or equity ratio.
- It reads the past charts, patterns, and trends of the stock to predict its future price movement.
- Technical approach is used for short term investments.
- It gathers data from the stock charts.
- Various technical indicators that are commonly used are MACD, Simple Moving Average, EMA, RSI etc