Learn Investing: Use Technicals & Fundamentals Together

You don’t have to choose between technical analysis and fundamentals. The best investors use both — fundamentals tell you what to buy, technicals help decide when to act.

How to Use Technicals & Fundamentals Together

Why smart investors don’t choose between them — they combine both.

"Charts show the timing. Fundamentals show the reason. Together, they give you the edge."

Use Technicals & Fundamentals Together When Investing

Why It’s a Mistake to Pick Just One

Some investors are die-hard fundamentalists. Others swear by the chart and ignore the balance sheet.

But the truth? Each side is missing half the picture.

Fundamentals help you identify quality businesses and long-term value
Technicals help you navigate price action, sentiment, and entry/exit timing

When you combine both, you:

Avoid buying strong companies at the wrong time
Avoid trading setups in weak businesses with no staying power
Add confidence to your decisions — both logical and tactical

What Fundamentals Tell You

Revenue, profit, and cash flow trends
Management quality and vision
Competitive advantage and long-term potential
Valuation (P/E, FCF, etc.) and margin of safety

These help you decide: Is this business worth owning?

What Technicals Tell You

Where key support/resistance levels are
Whether the stock is overbought or oversold
How volume confirms (or contradicts) the move
Short-term momentum and trader sentiment

These help you decide: Is now a smart time to act?

Simple Ways to Combine Both in Practice

1. Fundamentals First, Technicals Second

Start with a watchlist of strong businesses
Wait for the chart to align — a pullback to support, a breakout with volume, a moving average bounce

2. Chart First, Then Validate the Business

If a chart looks great, check the story behind it
Don’t buy a great pattern on a bad company
A breakout is more powerful when the business is fundamentally improving

3. Use Technicals for Scaling In or Out

Fundamentals might tell you to hold for years
But charts can help you:
- Add on pullbacks
- Trim into strength
- Avoid buying into parabolic spikes

Common Mistakes to Avoid

Relying only on the chart without understanding the company
Holding a company too long based only on fundamentals, even when price breaks down technically
Using technicals to justify chasing hype or bad businesses

📚 Analogy: Think of fundamentals as picking the right road trip vehicle — and technicals as checking the traffic before you hit the gas.

Quote to Remember

"Fundamentals tell you what to buy. Technicals tell you when to buy it. Both matter."