The Blurred Line Between Fundamentals and Technicals

   

Let's look straight. Before making your first deal you should conduct some sort of analysis, right? In the world of online trading, there are two kinds of the financial market analysis: Fundamental and Technical.

   Fundamental analysis deals with the study of the world monetary and financial groups, political and economic situation in different countries and international community as a whole. The main purpose of this method of analysis is definition of events that may have an impact on the financial market, as it will change prices of the actives. Therefore, everything including operations of large companies, interest rates of central banks, political and economic events, confirmed by the media, and even rumors should be taken into account. Now it's not difficult to track all these news, you can just go through couple websites like Bloomberg, Investing.com and others.

As you probably heard, financial market is usually represented in different kinds of graphs. So technical analysis is graphical and mathematical (computer) studying of graphs on different platforms, provided by a broker. It is based on the nature of the market, which consists of alternating periods of growth and decline. Price movement is subject to trends. There are lots of indicators and strategies that can help you to build your own forecast and make a decision about the opening of the position. Everything about technical analysis you can read in amazing book “Technical Analysis ofthe Financial Markets: A Comprehensive Guide to Trading Methods andApplications” written by John J. Murphy.

  The assessment of the financial markets, in overall, has to combine both kinds of analysis. However, every trader chooses for himself what kind of analysis is preferable. The main thing is to decide what type of analysis you believe more, and strictly follow its’ instructions.