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As we assess fundamental analysis on decision-making, we must look at quantitative versus qualitative data. Now considering the distinction between the two types of data, we typically define them by referring to data as quantitative, if it is numerical in form, and qualitative when the data has a more theoretical basis. Now, why is that the case? Well, qualitative data is more concerned with understanding human behaviour, from the informants perspective, and the informant is simply ourselves. As economic agents and traders, it assumes a dynamic and negotiated reality, so there’s a level of discretion to understanding. Our qualitative approach, in contrast, quantitative data, is concerned with discovering facts about social phenomena. It assumes a fixed and measurable reality; in other words, the fixed and measurable reality is the raw data, the numbers that we try to derive a social phenomena and extract thought from that.
With the methods data is collected through Participation, observation in interviews, Data are analysed by themes from descriptions by informants. Again that’s simply us and reported in the language of the informant.
In contrast their quantitative data, or collective, through measuring things. Data is analysed through numerical comparisons, statistical inferences, and data is reported through that statistical analysis. So we use with quantitative data, the raw data to formulate charts and graphs, to give us an overall picture statistically, and to look for social phenomena which obviously help trading decisions. Fundamental trading is considered to be more a qualitative approach! Qualitative research is multi-method in focus involving an interpretive naturalistic approach! This means qualitative researchers study things in their natural settings, attempting to make sense of or interpret phenomena in terms of the meanings. People bring to them research following a qualitative approaches, exploit exploratory, and seek to explain how and why a particular market is behaving. Therefore, fundamental traders often based their trade decisions on a question of value, what does that mean for our trade decisions? Well if research shows that an asset is undervalued, these traders will look for buying opportunities, if on the other hand, research suggests an asset is overvalued, these traders will look for selling opportunities.
Technical trading, on the other hand, is considered to be more a quantitative approach! Quantitative research collects data in numerical form, which is then subjected to statistical analysis. The data is then measured to construct graphs and charts, to physically represent patterns or ideas that provide statistical reasoning. As the research is used to test a theory, it aims to ultimately support or reject the hypothesis! So as this approach tests raw data, it can be applied to many different environments, and that’s a huge advantage to using this quantitative approach. Actually deriving reasoning from the raw data across many different fields, or industries data analysis, helps us turn statistical data into useful information to help with decision making. Therefore quantitative research is more focused on our objectivity, and that would certainly be the main reason why we would say quantitative approach or quantitative trading, it has more of an essence of technical trading. As technical traders, we want to become very objective, if we look towards our technical indicators, take Bollinger Bands as an example, it uses a statistical model across a variation from the mean. It follows price action to look for objective trading decisions as such. Technical trading is considered to be much more of a quantitative approach.
