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HOW TO PREDICT MARKET
TRENDS?
In all Spot/Cash & CFD Markets, trading decisions are made
through fundamental or technical analysis, although many traders use a
combination of both.
Fundamental
analysis is the study of all factors that influence supply and demand.
For the Spot/Cash Markets, the fundamental factors include weathers and
geopolitical events in producing countries - outside forces that influence price
action. For the Spot Forex and Spot Index Markets, factors such as Federal
Reserve actions and economic reports are among fundamental forces affecting
prices.
Technical
analysis is based strictly on inside market forces. It involves
tracking various price patterns that occurred in the markets in the past.
Analysts focus on a variety of time frames, and trading decisions are based on
past tendencies with the idea these price patterns tend to repeat themselves.
Technical analysis involves a wide range of techniques, and a variety of market
indicators are studied including volume, open interest, and momentum. Each
individual analyst has his favorite approach - technical analysis is just as
much art as it is science.
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