How to Analyze the Market

Introduction to Fundamental AnalysisFundamental Analysis consists the study of News, Events and Economic Data to determine trading opportunities. As any other kind of analysis, the fundamental analysis aims to forecast the future price movements to potentially profit from them.

For example, if you want to buy shares of a particular company, you may want to examine the financial performance of that company, the business concept and even its competition.

A fundamental analyst keeps a close eye on economic news and data that is released, to determine the direction in which the market could go. Even though fundamental analysis is a very popular method, widely used to predict the behavior of a financial instrument, it does no guarantee a success. Fundamental analysis may help you to anticipate and prepare yourself for significant Market events, however you should always remember that Forex/CFD Market is full of surprises, and sometimes even experienced analysts are not able to predict how a particular information will affect the price.

If you wish to apply fundamental analysis to your trades, you should pay close attention to Economic Calendar, which always informs you about the upcoming events.

To fully understand what is happening in the market, you may want to analyze information from External sources in order to make informed decisions. There are many factors that affect the market. Among those, the most important one is the law of Demand and Supply. To comprehend what the markets may do next, some traders perform Fundamental, Technical and Sentimental Analysis.

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Introduction to Technical AnalysisTechnical Analysis is a method that focuses on the historical data and chart patterns in order to predict future price movement. Analysts use charts and various indicators to understand historical prices and to try to identify patterns and trends that repeat over time. Even though technical analysis is a very popular method applied by traders, who wish to predict upcoming price movements, it does not guarantee a success. Technical analysis may help you to anticipate and prepare yourself for significant price movement, however you should always remember that the use of historical data does not guarantee nor constitute a safe forecast regarding the future performance of any Financial Instrument.

If you wish to apply technical analysis to your trades, please note that we provide our traders with a very flexible trading platform that can be customized for analysis as well as additional tools and various indicators used to investigate price movements. In addition to this, we can also provide you with a daily technical analysis delivered right to your inbox. If you wish to receive daily technical analysis from us, please subscribe to our newsletter. It can be performed on any tradable instrument which is influenced by supply and demand, including forex, stocks, futures and much more.

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Intoduction to Sentimental AnalysisAlthough, the understanding of the Technical and Fundamental Analysis is very important, if you are thinking of becoming a professional trader, you should also take under consideration the significance of the Sentimental Analysis. It aims to capture the overall emotion of the market’s participants. In other words, the goal of every sentimental analyst is to understand the prevailing emotion (market sentiment) and decide whether in the nearest future traders are more likely to go Bullish or Bearish.

The main purpose of the Sentimental Analysis is to understand how other traders think, what emotional logic they apply while carrying out their trades, and how to take advantage of it. There are a number of Indicators used to understand Market’s Sentiment, however the SSI (Speculative Sentiment Index) is considered to be the most popular one. Additional source that can help you to understand the Sentimental Analysis is a Survey done by the American Association of Individual Investors (AAII).

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