The tools that investors will use in order to create and maximize their profits, is up to them. Neither the Fundamental nor the Technical Analysis guarantee a 100% success rate. Risk is taken for granted no matter which technique we use. Experimenting with the tools that each methodology provides is necessary for selecting the style that each investor will adopt in the long run.
Also, the philosophy of each investor and their views on how the markets are moving and what are the mechanisms that activate them are vital factors for success, since above all, the investors should believe in what they are doing - if they want to do it well. It is said that those who embrace the view that Fundamental Analysis is the appropriate way to evaluate an investment, believe that markets are moving at 80% in a logic-based manner and the remaining 20% is driven by psychology (enthusiasm, fear, greed, mimetism, etc.). On the other hand, those who embrace the view that Technical Analysis is the appropriate way to evaluate an investment, believe that market movements are due 80% for psychological reasons and 20% based on logic.
In conclusion, the two approaches oppose each other but most of the time they need to work complementarily, in order to ensure greater risk spreading and hence greater efficiency and profitability of our investments.
It is necessary to learn to combine different techniques, to obtain multiple signals and confirmations from different sources, in order to increase the chances of success of our trades. It takes a balance between the analysis’ insight and the determination to enter at the right time.
"The Policy of Being Too Cautious is the Greatest Risk of All."
Jawaharlal Nehru
