HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Technical and Fundamental analysis


Technical analysis complements fundamental analysis by focusing more on numbers, patterns, and statistics, instead of the intrinsic value of an asset. Traders employ technical analysis to try to estimate future price behavior based on past trading performance and price movements rather than fundamental health, and typically do so by referring to patterns on an asset’s price chart. The idea behind technical analysis is that price trends themselves are a catalyst for future price trajectory, because history tends to repeat itself.

Technical Trends


Any underlying asset that is sensitive to changes in supply and demand can be forecasted with technical analysis. Stocks, bonds, commodities and currencies are all the focus of technical analysts, who believe that price changes are never random, and that the reason for any small or large movement can be identified with the proper strategy.

Some popular technical indicators used for this trading methodology are found below:

Fundamental analysis


Of the two main types of analysis that traders engage in to inform their strategies, fundamental analysis takes a more qualitative approach as opposed to technical analysis. The goal of fundamental analysis is to find the intrinsic value of an asset, such as a stock, which can be attempted by looking at the company’s financial disclosures and other economic reports. This helps a trader determine the true health and sustainability of the company, regardless of what the charts look like.

Why Use Fundamental Analysis?


The point of fundamental analysis is to determine if a company is weak or strong within its industry and in general. If you determine from its key reports and other economic indicators that it is weak, considering a short position may be a smart strategy. The opposite is also true for fundamentally strong companies. Remember that fundamental analysis can be used to gauge the health of almost any underlying asset, not just stocks.

For instance, a trader can conduct fundamental analysis on a commodity by examining the economic conditions in those countries that represent its biggest source of production. Bond traders might look at broader economic components, interest rates and the credit rating of the bond issuer.

However, fundamental analysis is commonly associated with trading in the equity and foreign exchange markets. Traders have a lot of publicly available documents and other reports to analyze, including quarterly reports, debt, profits and revenues, future growth estimates and more, to try and get a picture of a company’s overall health.

Once a stock, currency, commodity, or index has been effectively analyzed, the idea is to arrive at its intrinsic, or true, value. If the intrinsic value of an asset is below the current market price, investors may opt to short the asset with the expectation that prices may fall to the intrinsic value with the passage of time. Similarly, if the intrinsic value of an asset exceeds the current market price, investors may elect to open a long position in anticipation of the asset rising in value.

#source


RELATED

Trading terminal MetaTrader 4: features and capabilities

Trading terminal MetaTrader 4 is the most popular software solution for financial market trading today. The platform boasts user-friendly interface, easy...

Choosing the right trading account

The forex market is no longer a space reserved solely for banks, financial institutions, money managers or hedge funds. Instead, individual traders also have the ability...

What should you know about cryptocurrencies?

eXcentral is expanding the number of assets and markets available for traders to invest in every month. One of the highest growing markets, if not the highest...

Everything You Need to Know About Margin Trading

Margin trading is a popular method used by traders all over the world. It can offer attractive opportunities, but as with any form of trading there are no guarantees and the level of risk must be taken...

What is a Limit Order?

A limit order is a buy or sell order of a digital asset at a specific price. A buy limit order can only be executed at or below the limit price, while a sell limit order can only be executed at or above the limit price...

What is Risk Management in Forex?

A trade may be closed profitably or at a loss. Trading, as a whole, may become profitable or lead to losses. Risk management in Forex is about reducing the loss factors.

Crypto and NFTs: The New Age of Art

Crypto and NFT art can be an even more promising pair for the future of art as a whole. Fiat currencies and art have both been around for a long time. We are equally...

Top Trading Picks 2024: Mastering the Financial Markets for Optimal Success

As we step into 2024, the financial markets offer a kaleidoscope of opportunities for both novice and seasoned traders. With an overwhelming array of advice on financial planning and investment strategies...

Mastering Gold CFD Trading: Your Comprehensive Guide

Few assets hold the allure of gold. It serves various roles – a hedge against inflation, economic fragility, or a counter to the US dollar's influence. Regardless of its driving force...

Why Choosing The Right Broker Is Critical

Forex trading is an equal opportunity vertical. There are no exams, no prerequisites, no prior experience needed to start trading. All you have to possess...

Spread, swap, quotes and other scary words

How to make money in Forex? This is the most common question asked by all newcomers to the world of finance. If you're serious about starting to trade on a stock exchange...

Five Types of Stocks to Trade

Stock markets cater to a wide range of investing styles. Both traders and long-term investors have access to various types of stocks, based on their investing horizon or risk appetite...

Best Online Forex Trading Tips for Beginners

As a forex trader you must have come across lots of information about trading forex. One of the biggest challenges is finding the right information for you...

Cent and standard accounts: differences and similarities

Trading on the Forex market always starts with creating a trading account. At FBS, this process is simple: you choose an account to your liking, register, and verify it...

How to Trade CFDs on Gold and Silver

Gold and silver have been chosen by traders for hundreds of years now. These metals are always in demand, especially from manufacturers of jewellery or other sectors such as the electronics...

How to Spot a Bull or Bear Market?

There are two important terms in financial markets that can help investors understand and react to certain situations. Both bull and bear markets describe how markets...

Top Forex Trading Tips For Beginners

Want to know the best trading tips today to use to your advantage in the Forex market? This article will break down good trading tips you should consider using...

What is a Bear Market? A Complete Guide

Sometimes, during market cycles, the stock markets may plunge, and prices could fall. It may be for a short period of weeks or months, or even drag on for years...

Intraday Trading: The Complete Guide

The advent of online trading available to anyone with a smartphone or tablet has opened up financial markets like never before. Modern technology, 24-hour news, and minimum...

Forex vs. CFD: Which One is Better?

Probably, every trader has faced the abbreviation CFD. But if you ask what this means, in most cases, the answer is: it's something similar to Forex, only for stocks...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.