How can Technical Analysis work in Long term better than Fundamental Analysis?

How can Technical Analysis work in Long term better than Fundamental Analysis?

The answer to it is simple — market works on discounting mechanism.

Technical analysis isn't just related to price action or short term trading. It may work better than fundamental in the long run. Lets take an example- you may sell a xyz stock cause its financials were not good and it might make a loss the next year , now the market knows this , that the financials of a company are bad and it might make a loss and this thing is already adjusted in the price of stock. The market knows every information and its impact is reflected in its stock price. If Financials of a company will be bad after 1 year we will see its impact now in its price. like Tata Motors saw a correction after trump announced some tariff on Ev Components , why did that happen now — because the market knows that it will impact the operations of company in future. Everything , Every Information about the stock is reflected in its Price. Technical Analysis in a way is bigger than fundamental analysis because it accounts for it.

Now why it might be better than fundamental?

Each stock follows a pattern which are not same but similar. As said by Mark Twain — “History rhymes, it does not repeat”. so if we are successful enough to understand the pattern of stock or structure of price we may even be successful in making money out of it in long run.

Whereas for Fundamental Analysis its not possible to understand the impact a certain thing can bring. For example — Tata Motors announces that it will eventually by 2030 only produce E.V Vehicles , let's for a minute assume its a great news but how can you measure the impact it will bring for the company , even if you know its good you dont know how good . you may think why i want to measure how good it is , its good i will take my position but there is no certainty by how much the stock can go up. suppose you thought its great and put all your investments into it only to know it was not that good. whereas for technical analysis you dont care about reasons , you just see the charts and make calculations and take your position.

Thank You.