Is fundamental analysis useless when you’re trading instead of investing?

1. Fundamental Analysis in Trading

• 📅 Purpose: Focuses on a company’s long-term financial health (earnings, debt, etc.).
• 📰 When it’s useful for traders:
  • During news events like earnings reports, mergers, or product launches.
  • For understanding overall market trends (e.g., interest rate hikes, economic growth).
• 📊 Example: If a company reports strong earnings, its stock may rise in the short term, offering trading opportunities.

2. Why Fundamental Analysis Is Limited in Trading

• ⏱️ Timeframe:
  • Trading is short-term (minutes, hours, or days).
  • Fundamentals often affect the stock price in the long run, which isn’t relevant for traders.
• 🔄 Price Movements:
  • Traders care about short-term price fluctuations caused by demand and supply, not intrinsic value.

3. Technical Analysis Is Better for Trading

• 📈 Focus: Tracks price action, volume, and patterns.
• 🔍 Tools:
  • Support/Resistance
  • Moving Averages
  • Indicators (RSI, MACD)
• 🎯 Helps traders identify entry and exit points quickly.

4. Best of Both Worlds?

• Combine both for smarter trading:
  • Use fundamentals to avoid weak companies or pick stocks with strong catalysts (e.g., good earnings).
  • Rely on technicals for timing your trades and managing risk.

Verdict: Fundamental analysis isn’t useless for traders, but it’s more of a supporting tool than the main strategy. For trading, technical analysis is king! 👑📊