One of the biggest mistakes made in the financial markets is to unknowingly invest in projects or companies whose objectives you do not know, at the wrong time and from the wrong buying points. In our current article, we will first discuss what fundamental and technical analysis are, and then what are the benefits of knowing them.
Fundamental analysis in financial markets is the evaluation of an asset through economic, social, sectoral and other quantitative or qualitative dimensions. In order to perform fundamental analysis of an asset, you need to follow global developments, political events, wars, in short, a lot of news developing in the world and in Turkey, as well as macro and micro economic data. For example, someone who predicts that artificial intelligence projects will emerge in the energy and chip sectors can make huge profits by investing in these projects.
It is possible to give many similar examples. Also, you need to follow the news flow within the companies themselves. For example, you should track many things like who the company’s management team consists of, whether there have been any incidents of corruption or tax evasion related to the company, which companies it has contracts with, whether Which tenders it participates in and the projects it will undertake. All of these can be examined within a fundamental analysis.
Questions are to be answered.
Apart from all these in the context of cryptocurrencies, you should also follow the data of the token economy of the projects and the current trends. “What purpose is the respective project used for?”, “How much is the supply?”, “How are distribution strategies and unlocking performed?”, “Does supply and token inflation control?” What are the burn mechanisms and strategies used to attract other customers? trend). Is it?” You should find answers to many questions like.
Technical analysis is trying to predict the future price of an asset by examining past price movements and trading volume. Technical analysis is basically based on the assumption that history will repeat itself and similar structures seen in the past will work in the future. As I mentioned in my previous articles, there are many technical analysis methods from “price action” to “footprint”. In its simplest form, technical analysis involves drawing trend lines and determining support and resistance levels. Similarly, we can calculate technical indicators such as moving averages, relative strength index (RSI), formations and volume averages.
Do support and resistance levels really work?
The reason technical analysis is meaningful to people is because they try to understand the charts they see. As humans, we don’t like uncertainty and things we can’t control because such situations make us feel threatened and in a risky environment. The easiest way to eliminate this is to take steps that eliminate the current uncertainty and create a sense of control, at least a little. What I have mentioned should not be taken to mean that technical analysis is useless. In contrast, many people and organizations like you take action through technical analysis. The points we call support and resistance levels actually work (even if they don’t work, we see that they can at least cause a price reaction). Hence, technical analysis appears to be a strength in your hands and it is very important to learn it. Instead of trading haphazardly in an environment of complete uncertainty (not everything goes up just because you think it will), having a little control over your investment will encourage, manage risk. And psychological flexibility will increase. You can make your purchases by setting specific levels, take profits at specific levels, and reduce your risk with stops. On the other hand, a person who is not familiar with any technical analysis makes random purchases based on his emotions and waits for the price to rise without knowing when to sell.
Being able to make investment decisions based on data, not randomness.
In addition, you can make more accurate investment decisions through fundamental and technical analysis by determining whether the price is cheap or expensive, determining which asset you should prefer ( For example, periods of war in gold or the energy sector may increase), relative control by analyzing your market behavior (emotional state), instead of making random decisions, you can take action based on data. And most importantly, you depend on others to make decisions Instead of making your own financial investment decisions individually (everything else seems right. Environment where you don’t know anything).
However, it should not be forgotten that these two methods alone are not enough. If that were the case, we would expect human-written codes and artificial intelligence to make much better financial decisions (considering that the things you read and learn on the Internet are already available in databases). At this time On becoming a businessman Going back to our article, we can say that psychology forms a large part of business, and that there are many different situations such as entering into a transaction, continuing a transaction, and making a profit from a transaction. To be able To summarize, fundamental and technical analysis will strengthen your hand and enable you to make sound investment decisions, manage your psychology and adjust your risk.
This article does not contain investment advice or recommendations. Every investment and trading venture involves risk, and readers should do their own research when making decisions.
