## How Fundamental Analysis Works in Practice

Have you ever stopped to think about what really determines whether an asset is expensive or cheap? The answer lies in Fundamental Analysis (FA). Unlike just looking at charts, this method examines everything it can — from the quality of management and the company's reputation to macroeconomic factors and market capitalization. It's like doing a deep evaluation before paying for something.

## The Real Purpose of FA

Fundamental Analysis operates with a simple logic: the future price of an asset should not depend solely on what has happened in the past. It takes into account both microeconomic and macroeconomic aspects that can impact a specific market. In practice, this means investigating factors that are not immediately apparent — such as a company's leadership and its history in other businesses.

The real objective? To find a quantitative price that can be compared with the actual market price. In other words, to determine if something is truly overvalued or undervalued.

## FA is not just for actions

Although historically used to evaluate stocks, Fundamental Analysis is applicable to practically any type of asset — including cryptocurrencies. It seeks to better understand the specific market of a sector and the future potential of a product or service in that space.

## FA vs TA: Why Not Choose One or the Other?

Here comes the interesting question: while Fundamental Analysis observes broadly around the price of an asset, Technical Analysis (TA) is strictly focused on historical data and market charts.

FA tries to ascertain the real value of an asset, while TA is a tool for predicting price action based on trading volume and past trends. They seem opposing, right? But they are not.

## Balance is the Key

Most traders and investors today recognize that both FA and TA are valuable in their own way. Instead of getting stuck in a single approach, combining both in a balanced and contextualized manner makes much more sense. While FA tells you *why* to buy, TA helps you determine *when* to buy.