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Fundamental and Technical Analysis Compared

Chart showing that life sucks less as time goes on. paper sitting on a wooden table with a silver ruler, gold pen and notecards in background

When you’re investing in the financial markets, it’s not possible to accurately predict what will happen in the future. Instead, investors rely on technical and fundamental analysis to make informed decisions.

Fundamental analysis involves looking at the economic and financial data, then using this information to estimate what will happen in the future. Technical analysis, on the other hand, relies on mathematical calculations to help the traders estimate how the price will move. This article will compare the two types of analysis.

Fundamental Analysis

A good way to explain fundamental analysis in forex is to give an example of two countries. Country A has a thriving economy with falling unemployment, increased productivity, and an improved manufacturing sector. Country B, however, is not doing well. Its unemployment rate is rising and the economy is slowing.  If you choose to invest in either of these two countries, you would probably prefer Country A. And if you invest there, the demand for its currency will go up, which will make its value rise.

In fundamental analysis, traders receive different types of economic information, and their role is to interpret how the it might affect the market. Examples of economic data that moves the market are employment numbers, manufacturing activities, inflation, and interest rates. Political news like an election or a change in key government ministers can also move markets.

Technical Analysis

This type of analysis relies on indicators that are derived from mathematical calculations. There are three main types of indicators. First, trend indicators are used to show the formation of a trend, or when a reversal is about to happen. Examples are moving averages, parabolic SAR, and Average Directional Index. Second, oscillators are used to identify the extremes of asset prices. Examples are the Relative Strength Index, Stochastics, and Relative Vigor Index. Third, volume indicators are used to measure the activity of the market. Examples are On Balance Volume, and Accumulation & Distribution. While these indicators are derived from complex mathematics, it is not necessary for a trader to understand the mathematics behind them.

Applying the Two

There are traders who believe in combining the two types of analysis and traders who prefer to use them separately. For example, Warren Buffet believes in using fundamental concepts when investing. His method is to buy good quality undervalued companies and hold them for a long time. He does not apply technical analysis. On the other hand, fund manager James Simmons, who manages more than $30 billion of assets, believes in technical analysis. The same is true with many other quantitative-focused traders.

Technical analysis is ideal for traders who are focused on the price and profiting for the short-term. Their goal is not to understand the fundamental details of the assets; instead, the technical analysis of the price. If the technical indicators show that an asset will move up, they buy and then exit once that goal is reached. However, even for them, it is important to have a brief understanding of what is going on in the wider market.

Fundamental analysis is also ideal for day traders, swing traders, and long-term traders. For example, a day trader can use the economic calendar to make a trading decision when the US Federal Reserve is releasing interest rates decision or when a company is releasing its earnings. Long-term traders on the other hand can use the economic data to determine whether a currency pair or asset will continue doing well.

Final Thoughts

It is important to understand these two types of analysis. Even if you just focused on price, understanding the fundamentals will help you avoid making simple trading mistakes. For example, it will help you avoid initiating a trade when a major data is about to be released. For long-term traders, having a good understanding of technical factors can be an asset, too.

Around the World in 80 Books: Bosnia Herzegovina

What an awesome reading challenge! I'm loving all the diverse books, and I loved The Tiger's Wife.

Welcome to the next installment in my Around the World in 80 Books Challenge! It’s exactly what it sounds like: I’m trying to read 80 books from 80 different countries/cultures around the world, and to add a frugal spin, I’m trying to do it all for under $20.

Here’s my running tally so far:

$0- Library books: Russia, Norway, Sweden, Mexico, Sierra Leone, Spain, Nigeria, New Zealand, China, Canada, Jamaica, Austria, Mali, Afghanistan, Persia
$2.75- Late fees on the book for Italy
$0- Free eBooks: Scotland, England, Portugal, Cyprus, Albania, Montenegro, Mongolia
$0- Gift: Turkey, Pakistan, Autism in the USA
$0- Won in a Giveaway: Jerusalem
$0- Reward for participating in Summer Reading Program: Black America
$1.99- eBook: Basque Country, Japan
$0- Paid review on an interesting read: Financial Inclusion at the Bottom of the Pyramid
______________________________________

Grand Total: $6.73

Today’s read was a library eBook from a few months ago. I thought I’d wait until I had two to present you with like I used to. That didn’t work out. While I have been reading books for work and personal development, I have been reading any that pertain directly to this challenge.

But onward I press, four years after setting the goal with an arbitrary deadline. I’d like to count this book for 2018, so I’m going to review it before the year closes!

Because I borrowed from the library, we’re still at $6.73. After today, I will have logged 32 books.

Bosnia Herzegovina

The Tiger’s Wife

bosnia herzegovina balkans book review

This is one of those reads that stays with you. Somewhere between historical fiction and folklore, author Tea Obreht takes you on a journey over much of the 20th century in the Balkans. The line between the realistic and the magical waivers as she weaves the story of the main character’s grandfather’s life and death.

With it she reflects on the difficult relationship between tradition and science, the shifting tides that can dramatically change lives and culture when power is exerted in the name of religion, and the underlying culture of fantasy and superstition that was shared by the people of the Balkans–regardless of which god they believed in or which ethnic group they belonged to.

She addresses shifting borders and how they affect the relationships of people who were once neighbors. She addresses the lasting effects of growing up in a country at war. This particular war narrative isn’t as intense as the autobiography from Sierra Leone.

It is more full of allegories and symbolism, much of which I didn’t completely understand the first time through. But that lack of understanding is no big deal. It gives me space to learn. To come back and read again, and appreciate the work in new ways.

I highly, highly recommend this one. Despite the fact that the pages were full of self-aware fantasy which occasionally jumped back into reality, I found myself questioning whether this was an autobiography throughout the read.

It was not. The Tiger’s Wife was just a beautifully told story that I’d suggest be read far and wide.

 

 

 

Have a recommendation for what I should read next? Leave it in the comments! Here’s what’s already in my queue:
Philippines: May Day Eve and Other Stories by Nick Joaquin recommended by Guiltless Reader
Iceland: Scarcity in Excess by Arna Mathiesen & Thomas Forget
Sudan: The Wedding of Zein by Tayeb Salih recommended by Kate Wilson
Ethiopia: The God Who Begat a Jakal by Nega Mezlekia recommended by Based On a True Story
French Antilles: Victoire: My Mother’s Mother by Maryse Conde recommended by Based on A True Story
Suriname: The Free Negress Elisabeth by Cynthia McLeod recommended by Based On A True Story
Germany: In the Garden of Beasts or Devil in the White City by Erik Larson recommended by Emi from AIP Around the World
Haiti: All Souls Rising by Madison Smartt Bell recommended by Tre from House of Tre
South Africa: Cry the Beloved Country by Alan Paton recommended by Emily from The John & Jane Doe Guide to Money & Investing
Australia: In a Sunburned Country by Bill Bryson recommended by Aaron from When Life Gives You Lemons, Add Vodka
Romania: Anything by Andre Codrescu recommended by Abigail from I Pick Up Pennies
Croatia: Girl at War by Sara Novi recommened by Erin from TexErin-In-Sydneyland
India: Malguid Days by R.K. Narayan recommended by Michael from Stretch a Dime
Vietnam: The Refugees by Viet Than Nyugen recommended by Nicole from Adventures of a Semper Fi Family

Why Seniors Are Starting to Prefer Retirement Villages and Communities

Today’s post, contributed by an outside writer, is brought to you by Lendlease.

Retirement communities are way hipper than we give them credit for. Showing to my mom.

Our popular culture has somehow managed to paint retirement villages or communities as undesirable places for only downtrodden seniors. This wrong impression, unfortunately, deters some people from exploring the benefits and opportunities of optimal living that can be attained at a certain stage of life.

If you’re considering to move to retirement villages on the central coast NSW, or anywhere for that matter, but are still unsure if you should pursue the option, then read on. We’ll explore the benefits and opportunities it offers.

No more stressful driving

Driving can become stressful as we age–as our driving abilities decline. Because of this, most residents choose to utilize the free transportation that’s offered by retirement communities. The time for relying on a car is over. If you still want to drive, parking is available for residents.

Tastier food

There are a lot of seniors that are used to living alone and aren’t eating right anymore. In retirement communities, residents don’t need to worry about meal preparation or groceries. As an alternative, they get to obtain a fine dining experience every day. The food is often better, alternative meals are typically offered and special diet needs are accommodated. Most new residents who had been eating poorly before moving in experience improvements in their health and well-being just from the new diet.

Feel normal again

Sometimes, living alone doesn’t allow us to participate in activities and games that we used to enjoy, which were both fun and helped keep our minds sharp. Senior communities offer different prospects to keep seniors happy and engaged. This typically include games like bridge, chess, engaging reading and fascinating lectures and classes on every imaginable topic.

Safety

Residents can rest easy because the entire community is secure. Additionally, residents relish the peace of mind from fast emergency response systems that can be found apartments, or even on the resident’s person as a pendant.

This system reduces fears about being trapped or falling–scenarios that are all too common for seniors residing alone, although there are seniors who are living alone and are just doing fine.

Stronger family relationships

Older folks commonly become reliant on their grown children, or sometimes other close family members, for aid of all kinds. Unusual role reversals can pressure relationships and foster harmful feelings of bitterness, both by parents and their children.

Younger family members become free from the role of being full-time caregivers and are able to guarantee that time with their older loved one is high-quality and significant. Older residents are often glad to go back to the role of a family matriarch or patriarch and usually happy that their grown children no longer have to “become the parent of the parent.”

New friends–and family

Many older adults who live alone can become isolated, which is harmful at any age. At retirement communities, there are normally activities that allow you to make friends and share a meal with one another. Conversely, those who are more withdrawn appreciate that their privacy is valued, but are still pleased to have folks around.

Of course, senior communities aren’t for everyone. However, it’s without a doubt that there are many seniors living alone in unsafe or unhealthy situations who would gain tremendous benefits from a retirement community. Check out the Lendlease Communities if you’re looking for retirement villages on the central coast NSW. The famed community offers scenic surrounds, first-class amenities and a friendly community that will ensure seniors a love coming home.

Financially Savvy Saturdays: 187th Edition

Welcome to Financially Savvy Saturdays, the best place to find awesome money related stories and opinions on the web! It’s created specifically for personal finance bloggers! We welcome all things money here. Whether you’ve written anything from best advice on how to sell your home to debt busting fails, you’re invited to link-up.

If it ties into personal finance, we want to read it!

FinSavSat Banner

Femme Frugality - Financially Savvy Saturdays with Broke Girl Rich and Disease Called Debt

Super excited to be hosting this week! This hop was started in a effort to build community in the personal finance space, and I’m so glad for the new friends and great bloggers I’ve met through it.

Tweet about it. You can use #finsavsat when tweeting about the party!

Concerns about SEO? Recently many bloggers have decided to stop participating in events such as Carnivals. If you’re worried about how participating in this link-up could effect your SEO, we’d encourage you to check out this article.

Interested in co-hosting? Co-hosting is fun AND easy. If you’re interested, you can email me via brokeGIRLrich(at)gmail(dot)com with any questions. Or if you’re ready to take the plunge, you can sign up on this Google doc.

If you’ve co-hosted before and enjoyed it, please consider doing it again! If you’re interested but nervous about getting involved, please email one of us, we love talking to new bloggers and would enjoy explaining how blog hops work and getting you more involved!

Feature of the Week

As this week’s visiting co-host, Femme has selected her favorite post from last week’s blog hop to be this week’s feature. Femme chose 6 Ways to Get Free Books by Jax at Project: Beach Life.

Click here to read her post!

Click here to read her post!

If you submit a post, you could be featured in next week’s party!

We do have a couple of rules for participation. Those who don’t follow the rules will have their link taken down and won’t have the chance to be featured.

1. Your post must be written in the past seven days, related to personal finance and not be solely a giveaway.

2. Be sure to include a link to one of your hosts by copying and pasting the html in one of the boxes below into your linked up post. You have the option of the button or a text link.

3. Follow your hosts. You can follow brokeGIRLrich on Google+, Facebook, Twitter, Pinterest, OR by subscribing to her RSS feed. Also, you can follow Femme Frugality on Twitter, Google+, Pinterest OR by subscribing to her RSS feed.

4. Comment on at least one post before and after you that have joined the party.

5. HAVE FUN!

Please copy and paste this button into the post you link up:

Disease Called Debt

OR copy and paste this code for a text link:

 <em>*Part of Financially Savvy Saturdays on <a href="http://brokegirlrich.com/financially-savvy-saturdays-187" rel="nofollow">brokeGIRLrich</a> and <a href="https://femmefrugality.com/finsavsat-187/" rel="nofollow">Femme Frugality</a>*</em>


Financially Savvy Saturdays 181st Edition

Welcome to Financially Savvy Saturdays, the best place to find awesome money related stories and opinions on the web! It’s created specifically for personal finance bloggers! We welcome all things money here. Whether you’ve written anything from advice on how to stay positive during your debt journey to the worst ways to earn extra money, you’re invited to link-up.

If it ties into personal finance, we want to read it!

FinSavSat Banner

Femme Frugality - Financially Savvy Saturdays with Broke Girl Rich and Disease Called Debt

Tweet about it. You can use #finsavsat when tweeting about the party!

Concerns about SEO? Recently many bloggers have decided to stop participating in events such as Carnivals. If you’re worried about how participating in this link-up could effect your SEO, we’d encourage you to check out this article.

Interested in co-hosting? Co-hosting is fun AND easy. If you’re interested, you can email me via brokeGIRLrich(at)gmail(dot)com with any questions. Or if you’re ready to take the plunge, you can sign up on this Google doc.

If you’ve co-hosted before and enjoyed it, please consider doing it again! If you’re interested but nervous about getting involved, please email one of us, we love talking to new bloggers and would enjoy explaining how blog hops work and getting you more involved!

Feature of the Week

As this week’s visiting co-host, I got to select my favorite post from last week’s blog hop to be this week’s feature. I chose Cable Without the Cable Price Tag: Our Sling Review by Emily at The John & Jane Doe Guide to Money & Investing! If you’re looking to cut cable while keeping sports programming, Sling TV appears to be the holy grail.

Click here to read her post!

Click here to read her post!

If you submit a post, you could be featured in next week’s party!

We do have a couple of rules for participation. Those who don’t follow the rules will have their link taken down and won’t have the chance to be featured.

1. Your post must be written in the past seven days, related to personal finance and not be solely a giveaway.

2. Be sure to include a link to one of your hosts by copying and pasting the html in one of the boxes below into your linked up post. You have the option of the button or a text link.

3. Follow your hosts. You can follow brokeGIRLrich on Google+, Facebook, Twitter, Pinterest, OR by subscribing to her RSS feed. Also, you can follow Femme Frugality on Twitter, Google+, Pinterest OR by subscribing to her RSS feed.

4. Comment on at least one post before and after you that have joined the party.

5. HAVE FUN!

Please copy and paste this button into the post you link up:

Disease Called Debt

OR copy and paste this code for a text link:

 <em>*Part of Financially Savvy Saturdays on <a href="http://brokegirlrich.com/financially-savvy-saturdays-181" rel="nofollow">brokeGIRLrich</a> and <a href="https://femmefrugality.com/financially-savvy-saturdays-181st-edition" rel="nofollow">Femme Frugality</a>*</em>