In a high volatile market like DSE/CSE, it is always a difficult job to predict the movement of the market because so many factors are involved which drive this movement. For example, a new strict directive from SEC or any strict circular from Bangladesh Bank can significantly drive the market to a certain direction. There is no mechanism to identify this before it happens. But there are certain things which can predict stock specific behavior. These tools and techniques help avoid unwanted movement of stocks and also help earn good profit from the market.
Two types of techniques are widely used to track and predict the behavior stocks. One is fundamental and the other one is technical type of technique. But even we see in DSE/CSE people are using some techniques like wild guess, naive investment or even some random pick. It is true that to start investment in DSE/CSE it is not necessary to learn fundamental or technical analysis as we see most of the people go for "invest in what brokers suggest" and also they are making profit on an average basis. But the question is where an educated investor can earn hefty profit only by knowing some tools and techniques, what is the reason to earn less? Even smart people doubled (may be more than that) their money assuming moderate risk within a year! So it is time to stop avoiding fundamental or technical analysis while investing in DSE/CSE.
Now the million dollar question comes "Should I use fundamental or technical analysis?" The straight answer is the best way is to use both in a blended manner. If you are thinking of engaging stock market for a long time, even as your prime business, there is no reason to believe one single technique can offer good return year after year. However it is true that often fundamental themes can be predicted (not with absolute precision) by technical movement of stocks whereas it is not possible to trace technical movement from fundamental analysis. That is why technical analysis is much more popular in DSE/CSE. Nevertheless it is very necessary to understand basic terms of fundamental and technical analysis and also their application before starting such kind of business. These don't need you to be a university graduate or even don't force you to learn English first, you better watch some learning videos or ask any expert who you think is helpful. Hope you understand the message.
0 comments:
Post a Comment