1, no one can fully and timely grasp the fundamental situation. Fundamentals include many factors, such as supply and demand of commodities, domestic and global economic conditions, policies, politics, military and security, as well as weather and natural disasters. It can be said that not only no individual or even no organization can fully understand the fundamental situation, but only know more and know less, let alone know in time. There are always fundamental conditions in the market that affect prices and traders don't know, so the fundamental information that traders have will never be comprehensive. Incomplete and untimely information is imperfect information for trading, because the information held by traders may not bring profits to traders, but what traders don't know will often hurt traders. There are often incomprehensible quotes in the market, indicating that there have been new changes in the market that traders don't know. There is always something in the market that traders don't know.
2. The fundamentals themselves are dynamic, not static. Future changes in fundamentals are as unpredictable as market prices. The future market price is determined by the future fundamental situation, not by the current fundamental situation, so traders cannot analyze and predict the future dynamic market with the static fundamental situation they have at present.
The change of fundamentals can never keep up with the change of market price. In fact, it's not that fundamental changes can't keep up with price changes, but that traders can't keep up with market price changes forever. The change of market trend is definitely caused by the fundamental change of supply and demand in the market itself or the whole economic cycle, and the operation of funds cannot change the market trend. However, whenever there is a trend change in the market, the fundamentals that traders can know are still in the original trend direction, and the market has changed its running direction, but traders still regard it as an adjustment because the fundamentals have not changed!
These are the shortcomings of fundamental analysis, or the disadvantages caused by improper use of fundamentals by traders. In fact, fundamental analysis has its own advantages, that is, the fundamental situation will not change easily. Once the market forms a certain trend, the trend will not end easily, and it will run for a long time, that is to say, the nature of the fundamentals is relatively stable and will not change every day like the market price. Because any upward trend must be caused by the bullish bear potential. As long as the fundamental changes lead to the beginning of a new trend, we can think that the trend will continue. At this time, if we cooperate with some simple technical tools, we can make good use of fundamental research results and form real trading profits, which is the most valuable place for fundamental analysis.
In fact, the main function of fundamental analysis is to make traders know and understand the current situation of the market more clearly, so that traders can better keep up with the pace of market operation, make trading strategies that adapt to the market, and adjust traders' trading plans according to the new situation, rather than predicting the future of the market. In trading, traders must trade on the basis of price and take the market as the center, but not on the basis of fundamental data and their own judgment, because the fundamental data mastered by traders are definitely not comprehensive and timely, so traders must check whether the analysis is correct through market prices. Fundamental analysis is like a comprehensive understanding of a person's family background, work situation, age, social relations and so on. And judge the future development direction, prospect and space of this person through this research. And technical analysis is to make friends with the market. I don't care if this friend is rich or poor, as long as he has the same temper, he is a good friend. If you can really make friends with the market, you can understand the trading signals of the market. Technical analysis is trading by reading market signals.
The role of fundamental and technical analysis is actually to let traders better understand the market and keep up with the pace of market progress, so as to formulate trading strategies that adapt to the current market situation, rather than predicting the future of the market. Therefore, in essence, fundamental analysis and technical analysis are exactly the same, neither of which has the function of predicting the market. Its essence is to let traders track the market more effectively by understanding the market.