This is one of those questions that sounds simple on the surface but gets more interesting the longer you sit with it. And I think the reason so many traders struggle to answer it is that they are looking for the right answer when there is not one.

Technical or fundamental analysis? The honest answer is: it depends. On what you trade, how you trade it, what your goals are, how your brain works, and what you actually enjoy doing. Both approaches have merit. Neither is universally superior. And the only way to know which one is right for you is to spend real time with both and let the data — and your own experience — tell you.

What I can do is share how I came to my answer, because this is genuinely something I worked out over years. Not from reading about it. From journaling, backtesting, and paying the market for the lessons.

What Is Technical Analysis?

Technical analysis is the study of price. It looks at charts — how price has moved, where it has stalled, where it has reversed, what the volume looks like, what patterns have formed — and uses all of that to make probabilistic decisions about where price might go next.

Technical traders believe that everything worth knowing is already reflected in price. That the fundamentals, the news, the sentiment — all of it has already been priced in by the time most traders hear about it. So instead of trying to predict what earnings will look like or whether the Fed will raise rates, a technical trader simply reads what price itself is telling them.

It is a discipline that rewards pattern recognition, consistency, and the willingness to follow rules even when your gut wants to override them. The signals are clear. The data is testable. You can run it backward and forward and see what actually works.

What Is Fundamental Analysis?

Fundamental analysis looks at the underlying value of what you are trading. For stocks, that means earnings, revenue, debt levels, management quality, competitive positioning, industry trends. For currencies, it means interest rates, inflation data, employment figures, central bank policy. For commodities, supply and demand, geopolitical factors, weather patterns.

Fundamental traders are trying to understand what something is actually worth, and then capitalize on the gap between that true value and what the market is currently pricing it at. They tend to think in longer timeframes. They read earnings reports and central bank statements and economic calendars. They build theses about where things are headed and hold positions patiently until the thesis plays out — or until the evidence changes.

This is genuinely powerful analysis for the right kind of trader. It is how some of the greatest investors in the world operate. But it requires a different relationship with time, with uncertainty, and with the daily noise of price movement.

How They Work Together

Many professional traders use both — and there is a strong argument for doing so. Fundamentals can tell you the direction. Technicals can tell you the timing. If you believe an asset is fundamentally undervalued and the technical picture is also showing a bottoming pattern with volume confirmation, you have confluence. And confluence is one of the most powerful things in trading.

For example, a swing trader might identify a stock that is fundamentally strong — growing earnings, healthy margins, sector tailwinds — and then use technical analysis to find the right entry point rather than just buying blindly at any price. They get the best of both: the fundamental story gives them confidence to hold through noise, and the technical entry keeps them from overpaying.

This combined approach can work extremely well. But it also requires fluency in both disciplines, which takes time to develop. If you are early in your trading journey, trying to master both at once can lead to paralysis. Sometimes it is better to go deep on one and add the other later.

Why I Use Technical Analysis Only

I trade Futures primarily. ES, NQ, CL. These are short-term, intraday and swing plays where the technical picture moves fast and precision matters. For what I do, technical analysis is not just a preference — it is genuinely the more suitable tool.

But the reasons I landed here go beyond just the instrument. They go deeper into how my mind works and what I discovered about myself through years of journaling.

Fundamentals, for me personally, feel unpredictable in a way that makes it hard for me to build confidence around a decision. Price already has its own agenda. A company can beat earnings by a wide margin and the stock drops. A central bank can raise rates exactly as expected and the currency moves the opposite direction. The relationship between fundamental data and actual price behavior is not always clean. That ambiguity is something I found genuinely difficult to trade around.

Technical analysis gives me control. It gives me a framework that is fully defined, fully testable, and fully mine. My entries are rules-based. My exits are rules-based. My risk parameters are set before I ever take a trade. I know exactly what the setup needs to look like, and I know exactly what I will do in every scenario once I am in.

That level of clarity is what allows me to trade with discipline. It removes the ambiguity that used to trigger my worst psychological patterns. When you know exactly what you are looking for, waiting for it becomes patience. When you do not know what you are looking for, waiting just feels like anxiety.

The Backtesting Argument

One of the biggest reasons I stick to technical analysis is that it is so much more straightforward to backtest. You can pull up any chart, go back five years, and apply your technical rules systematically. You can measure your win rate, your average risk-to-reward, your maximum drawdown, your recovery time. You can see exactly how the strategy performs in trending markets versus choppy markets, in high-volatility environments versus quiet ones.

This data collection is invaluable. It is what gives you real conviction when you are in a drawdown — not just the emotional reassurance that you think you have an edge, but the documented evidence that the edge is real and that the drawdown is within the expected range of normal variation.

Fundamentals are much harder to backtest cleanly. The variables are more complex, the cause-and-effect chains are longer and less direct, and the data is often noisy in ways that make it difficult to isolate what is actually driving results. It can be done, but it requires a different kind of methodology and a much longer time horizon to gather meaningful data.

For a trader who wants to build a clear, data-backed edge and test it rigorously, technical analysis offers a faster and more direct path to that kind of certainty.

How Do You Know What Is Right for You?

Honestly? You probably will not know until you have tried both. And that is okay. Trying both is not wasted time — it is necessary time. Every experience you have with either approach is data that helps you understand how your brain works in the market.

Here are some questions worth sitting with:

• Do you prefer short-term trades with defined entries and exits, or are you more comfortable holding positions for weeks or months?
• Do you enjoy reading financial news, earnings reports, and economic data — or does that kind of research feel draining?
• How do you handle ambiguity? Can you hold a position through noise and price volatility if your fundamental thesis is intact, or does every price move make you second-guess yourself?
• What markets are you most drawn to? Short-term Futures and Forex trading lend themselves to technical approaches. Long-term stock investing tends to reward fundamental research.

There are no right or wrong answers to these questions. They are just information about who you are as a trader. And the sooner you are honest with yourself about the answers, the sooner you can stop trying to trade like someone else and start building something that actually fits how you think.

Whichever You Choose, Backtest It

This is non-negotiable regardless of which approach you take. You have to know what your strategy actually does before you put real money behind it. Not what you think it does. Not what the person who sold it to you says it does. What it actually does, measured against real historical data, tested across different market conditions.

If you choose technical analysis, backtest your specific setup. Chart after chart. Hundreds of examples. Build your data. Know your numbers.

If you choose fundamental analysis, develop a clear hypothesis, track your decision-making process, and measure your results against the thesis over time. Be honest with yourself about what is working and what is not.

And in both cases — journal. Write about what you are learning. Write about what you are struggling with. Write about what the market is showing you about yourself. Because at the end of the day, whether you are a technical trader or a fundamental trader, the common thread is always the same thing: the quality of your decisions, and the discipline with which you execute them.

That is the edge that outlasts any particular method.

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Jodie Leung is the founder of Gold Dragon Trades. All content is for educational purposes only and does not constitute financial advice.