Greetings to all fans of trading! Today we will discuss about market analysis which types exist and how to choose the specific kind of analysis. You have to understand that the market is treacherous and volatile environment.
He is today one, and tomorrow his character really changing. To always be on the crest of a wave, You will need to adapt to new market conditions, otherwise not be able to achieve positive results.
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The market doesn’t always behave logically, as the experience of many skilled traders even their impressive knowledge does not always help to clearly define the particular market trend.
Of course, they are also wrong, because very often, the market may move contrary to any predictions, so it works and cannot be changed. The great minds of this world are constantly trying to develop new concepts of forecasting, which will allow to properly assess the situation on the market, getting a profit.
Even a new trader after a short period of time, begins to realize that to achieve stable success in the market, it is necessary to develop his concept of market analysis, that is, to create their own trading system.
Everything here is just random trading will lead You exclusively to serious losses, of course, to talk about some positive shifts in this case is not necessary. You must understand that today there are plenty of methods of market analysis. And specifically to You and Your preference depends on which method of market analysis will You choose!
Now, let’s consider what methods of market forecasting are the most common and popular!
Fundamental analysis of the market. This approach simultaneously assesses the political and economic situation within a country and around the world as a whole. Take into account the following micro and macroeconomic performance: statement of the heads of the Central Bank, the sanctions of the States, the military operations, the statements of the heads of state and so on.
On the date of publication of these indicators You can learn from the economic calendar. But You should know what the fundamental factors are divided into the foreseen and unforeseen! Roughly speaking, the publication of the foreseen factors, we can know beforehand.
With regard to unforeseen factors, they are force-majeure circumstances anticipate that at all unrealistic. For example, in some country there was a technological disaster, of course, it is a negative factor that will affect the value of the national currency and the value of the shares.
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But nobody could know in advance that this could happen, consequently, these phenomena are a kind of spontaneous nature, provoking in terms of the market panic.
Technical analysis. Is the most common and popular method of forecasting. In this case, the most commonly used graphical models, which help assess the situation on the market.
Speaking roughly, using technical analysis, we are trying through the prism of the past to predict the possible trends of the future! As we know, history tends to be reflected in the future.
Many traders are extremely successful using this trading method, and it is most common among ordinary traders. In General, technical analysis is very extensive and has a huge number of branches.
Candlestick analysis. In this case, the trader uses the so-called candlestick formation that can indicate reversal or continuation of the current trend of the market. In General, this market analysis is often referred to a unit of the technical analysis but in my opinion, it’s a completely different approach.
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Of course, you use tools from classical analysis, but technical analysis is quite original and has the right to independent existence.
Technical analysis of. This method was developed by Elliot, and the basic idea is that the market moves mainly by waves. In theory, if the trader will be able to clearly define what a wave is developing on the market, he will be able to make a correct forecast about the future movement of the market.
This method of market analysis in popularity is seriously inferior to the previous one, but there are many traders who successfully used it.