Fundamental analysis and technical analysis are two primary methods used in financial trading to evaluate assets and make informed decisions.

Fundamental analysis involves examining the intrinsic value of a security by analyzing economic, financial, and qualitative factors. This includes reviewing company earnings, financial statements, management performance, industry conditions, and broader economic indicators. Investors using this approach aim to determine whether an asset is overvalued or undervalued based on its actual worth.

In contrast, technical analysis focuses on historical price movements and trading volumes. It uses charts, patterns, and indicators (like moving averages, RSI, and MACD) to forecast future price trends. Technical analysts believe that all relevant information is already reflected in the price, and that market patterns tend to repeat over time.

In essence, fundamental analysis is value-based and long-term, while technical analysis is price-based and often short- to medium-term. Many traders use a combination of both to enhance decision-making.