Being an investor means monitoring the trading market several times a day. Stock analysis is an important task for investors to find potentially profitable stocks. Do you know what do investors require for stock analysis? It is technical and fundamental analysis. Many of you are already aware of what technical and fundamental analysis is. But for the sake of the beginners who have just begun in this platform, we will give you a brief overview.
Table of Contents
Technical analysis is the study of the market theoretically. It means to study all the theories and technical sectors of the market. If you are a medical student then you will have to study some terms and acquire some knowledge that the civilians don’t need to learn. Without this knowledge, you might not be able to pursue a career in the medical sector.
Similarly, for investors, technical analysis is a matter that helps them to pursue a career in the trading market. There are several technical tools and terms that the investors need to know about to accommodate in this market easily. A medical student requires to know how a stethoscope pr a scalpel works. In that manner, one needs to know how a chart or a trend line works in the trading platform.
If you are unable to identify a trend in the market then you will not be able to know the perfect timings to enter a trade. That is why every investor needs to have a thorough technical study of the market. They must get familiar with the market as it helps a lot with the trading sentiments of the investors.
Similar to technical analysis, the fundamental analysis consists of a major portion of importance in the career of a trader. Now, even though you will need technical analysis to read the market, the market always doesn’t follow the numbers. Even though your speculation indicates a rise in trend, the market may fall overnight and start moving in the complete opposite direction. So, if you dig deep inside the market, you will see that some factors worked behind changing this market in the reverse direction.
News events usually take place at a specific time and so maintaining an economic calendar is very helpful when you are trying to avoid intense volatility. You will never regret looking at these events as they can help you speculate the market better. Take a look at the top Singaporean traders’ post. Visit company website of Saxo and learn about the impact of fundamental factors. Once you develop the skills to analyze the news event, you will never trade major stock without evaluating the news.
Price to earnings ratio
Price to earnings ratio is one of the most common ways to evaluate the stock market. Its calculation is done by dividing the per-share value by earning per share in the stock market. Comparison between the ratios in the market helps the investors to understand a better trading opportunity. A low ratio is considered a favorable condition for the investor to invest in some share.
Earnings per share
This is another indicator to analyze the stocks in the market. This is a great way to see how effectively the revenue of the company is flowing towards the investors. The higher the earning per share ratio, the better for the investors in their trade when this ratio is higher, it means, it is worth investing in the trades of that company.
Book value is a great way to determine the undervalued but high-growth companies that have a higher chance of earning per share. This way is helpful for the investors as they look for low competition with a high-profit value.
These indicators are frequently used by many stock market participants to have better speculation of the stock market and this has given them a better outlook in the trading market than ever.