Fundamental analysis is a strategy for picking stocks. In this you learn everything you can about a given company. This includes their income, growth, CEO, ect. It has been known to be an extremely profitable way of trading, which is why so many large institutions use Fundamental Analysis to make a profit in the stock market.

The only problem with Fundamental Analysis is that it favors the large companies. These companies that can afford to hire people to keep track of all new events that happen in the company. These companies may even visit head CEO's of the companies they are considering buying. Because of this fundamental Analysis is unfair to the average investor. With all these disadvantages how can the little guy invest?

Technical Analysis is the easiest and fastest way for average investors to make money in the stock market. So, how does this work? Instead of reading company statement like Fundamental Analysis, Technical Analysis perfects the art of reading chart movements.

How can you do this you ask? Well let me give you a crash course in stock patterns. First up is support. Support is an imaginary bottom of a stock. Each time the stock hits this support level it will normally bounce off of it and go up. Let's say a stock we are watching goes down to $45 every now and then, than bounces off and goes up. In this case $45 would be our support level.

Now let's learn about resistance. Resistance is an imaginary top of a stock. Say that same stock that keeps bouncing off $45 also will hit the level $55. Every time it hits $55 this stock heads down. In this case $55 would be our resistance level.

Also every once in a while a breakout will occur. A breakout is when a stock fails to bounce on either support or resistance. In this case it would most likely continue to make either a new high or a new low.

So, how can we use this? Well a couple ways. A Technical trader called a swing trader would try and buy the stock every time it hits $45 and sell it when it gets at or near $55. A technical trader called a breakout trader would wait until the stock breaks above $55 and buy it. This way he can take advantage of the new high it would probable make.

For more information on how to trade the stock market visit http://www.stocks-simplified.com/