Editing 2101: Technical Analysis

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*{{w|Technical analysis}} is more appropriate for traders seeking to benefit off short-term fluctuations in stock prices, by attempting to look for trends, momentum, patterns etc. in the stock prices.
 
*{{w|Technical analysis}} is more appropriate for traders seeking to benefit off short-term fluctuations in stock prices, by attempting to look for trends, momentum, patterns etc. in the stock prices.
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*{{w|Fundamental analysis}} is more appropriate for investors seeking to benefit off long-term fluctuations in stock prices, by attempting to guess future earnings based on some fundamental factor about the stock. Investors can choose to look for good Price/Earnings ratio or other indications that a stock may be a solid investment.
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*{{w|Fundamental analysis}} is more appropriate for investors seeking to benefit off long-term fluctuations in stock prices, by attempting to guess future earnings based on some fundamental factor about the stock. Investors can choose to look for high alpha, low beta, good Price/earnings ratio or other indications that a stock may be a solid investment.
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[http://www.investopedia.com/terms/r/randomwalktheory.asp Random Walk theory] suggests that neither of these methods are particularly useful at predicting the future of the stock market (see link for a funny story about dart throwing monkeys).
 
  
 
The theoretical value of a stock is its [https://en.wikipedia.org/wiki/Net_present_value net present value] which is the sum of all its future earnings, with earnings in the future discounted appropriately to account for the {{w|time value of money}}. Because these earnings are never fully predictable, traders may have different ideas about the true value of a stock, and buy the stock if they believe the currently offered prices are particularly low, or sell it when the prices are high.
 
The theoretical value of a stock is its [https://en.wikipedia.org/wiki/Net_present_value net present value] which is the sum of all its future earnings, with earnings in the future discounted appropriately to account for the {{w|time value of money}}. Because these earnings are never fully predictable, traders may have different ideas about the true value of a stock, and buy the stock if they believe the currently offered prices are particularly low, or sell it when the prices are high.

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