When it comes to trading, it is widely accepted that there are two main approaches to your analysis of potential trades: fundamental analysis and technical analysis.
Technical analysis is widely used by private traders and is becoming more and more popular. It involves the study of a financial product’s actual price to form an opinion on the likely future direction in which the price will move.
Fundamental analysis involves assessing the broader economy and what may specifically impact the financial product or asset you are going to trade. It is most heavily used by traditional stockbrokers and fund managers.
One of the things underpinning the effectiveness of fundamental analysis is that all market participants act rationally. Therefore, the value of indices, commodities, and currencies will track a reasonable expectation based on fundamental influences.Read More