Stock Analysis - How To Do Profitable Stock Investment Research

Stock analysis is a tedious job but understand how to analyze them can prevent you from losing money in stock market. These two methods will do exactly that.

Fundamental Stock Analysis

Fundamental analysis used to discover stock's fundamental values. How the business is doing, how competitive are they and what is going to happen in the future are some of the questions need to be answered. The objective is to reveal stock's profitability and management efficiency.

How do you know if the stock is profitable?

How do you know if the board of management is efficient?

You will find answers to both questions in annual reports.

Balance sheet, income statement and cash flow statement is the most critical part in any corporate annual reports. Mathematical formulas or known as key financial ratios will help you to identify if the stock is worth investing. Besides, these financial ratios can be used to value stocks as well.

Once you know value of the stocks, you can stockstackup.com" title="make money">make money by buying undervalued stocks and sell them if the stocks are overvalued. This approach also known as value investing, made popular by Warren Buffet and his Gurus.

Technical Stock Analysis

Technical analysis, on the other hand, focus on market sentiment. The idea is to study market behaviour and take advantage from other investor's greed and fear. Seasoned technical analyst can tell you how the market is doing now and what the stock price will be tomorrow.

They make money out of human's emotion.

But how they did that?

The secret lies in the stock price.

Expert stock traders use several of technical indicators to understand market behaviour; Relative Price Index (RSI), Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) to name few. They also use trading chart to visualize the price patterns such as Japanese Candlestick.

Either you are prefer swing trading, trend trading or momentum trading, combining fundamental analysis with your trading style will only make you rich faster.

Find out more information on fundamental analysis and technical analysis at http://www.Stock-Investment-Made-Easy.com/
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