These three schools are trying to solve the same problem, that is, to predict the direction of price changes, but only pay attention to differences. Basic analysis studies the antecedents of market movement, and technical analysis school studies its results. Of course, technical schools think that "results" are necessary information, and the reasons and reasons are not important. Basic schools must dig out their roots. Emotional analysis usually studies people's pessimism and optimism, looking for clues about price changes.
Many traders say they are technocrats, or they are basic. In fact, many people have both hands. Most basic analysts have a practical understanding of the basic position of chart analysis, and most technical analysts should always pay attention to the basic knowledge of economy. However, some technical analysts refuse to know any economic information, which is called "technomania". As for emotional analysis, they often use emotional indicators to establish the outlook for the market outlook.
Technical analysis
Technical analysis is to predict the future trend of market price changes, and to study market behavior with charts as the main means. Technical analysts usually ignore the reasons for the price increase. At the initial stage of price trend formation or when the market is at an important turning point, no one correctly understands why the market is so strange. It is at this important moment that technical analysts often open their own paths. Therefore, with the rich market experience, the ability of "market behavior is inclusive and digests everything" is getting stronger and stronger.
Naturally, since all the factors that affect the market price will eventually be reflected through the market price, it is enough to study the price. In fact, the technical analyst only shows the most possible trend by studying the price chart and a large number of auxiliary technical indicators, rather than the analyst "conquering" the market through his shrewdness. All technical tools are only auxiliary means of market analysis. Technical schools certainly know that there are reasons for the ups and downs of the market, but they think that these reasons have nothing to do with analysis and prediction.
Fundamental Analysis
Technical analysis mainly studies market behavior, and basic analysis focuses on the relationship between supply and demand with flat price rise and fall. Fundamental analysts need to consider all relevant factors that affect prices to determine the intrinsic value of certain assets. Intrinsic value refers to the actual value of assets determined according to the law of supply and demand, which is the basic concept of basic analysts. If the intrinsic value of an asset is higher than the market price, it is called high price, then it should be sold. If the market price is lower than the intrinsic value, it is called low price.