However, Investors must be prepared to wait for share prices to rise because the above process, although reliable, can take years to work. Traders use technical analysis to observe price activity and buy shares that are rising in price and sell shares that are falling in price. Chartist ignore factors that effect opinion but are prepared to work hard at observing price activity and usually monitor the stockmarket on a daily basis. Active Investors combine both fundamental and technical analysis to ensure that the entire process that drives share prices upwards is working. Active Investors spend approximately one hour per week checking their share portfolio.
Active investors use dynamic analysis.
Both of the shares shown below have excellent fundamentals but only one of them is going up. Active investors use technical analysis to test and measure the results of fundamental analysis in the same way that everyone else tests and measures the results of their work. Ask yourself whether you know any of the companies shown in the following charts. Then ask yourself if you own shares in any of these companies for the past year. Just hand in the course notes during the dinner break to obtain your refund.