Financial Markets Analysis
January 26th, 2012 | 
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There are two main methods used by investors to predict the movements of the prices in the financial markets: financial and technical. The financial analysis method is based on the economical and political events of the countries. This method has a global and outside overview of the situation that causes the certain changes and movements of the financial markets.
Due to high competition between the traders in the financial markets, for the last few years Investors are forced to turn to the technical analysis. This method is based on such techniques as a construction of candle charts, trend lines, analyzing the historical prices and movements and trying to predict the future direction by searching for the certain graphs’ patters in the charts.
According to the recent researches of the leading world experts of the technical analysis, the interest in technical analysis increased for the last few years due to the high number of big investors in Asian markets. These markets are too complex and as fundamental analysis is misleading and doesn’t supply investors with enough information about the financial markets, the Asian investors tend to use the technical analysis more often. The results of the traditional fundamental analysis and technical charting on Asian markets are very different.
Thus more and more investors are concentrating on the technical analysis of the financial markets rather than the fundamental one. But fundamental analysis also has found its place. Now it is mostly applied to analyze marginal revenue, industry trends, etc. Technical analysis gives the traders more detailed information about the market’s direction and involves the use of levels and patters in the graphs. Traders who use the technical analysis know how to interpret the market psychology by using its visual display on the charts.
As the world economy experiences many changes it becomes very difficult to predict the movement of the financial markets. That’s why the expert of markets’ analysis try to combine technical and fundamental analysis and decrease the differences between them.
There is nothing new in a wish to predict the future prices on Forex market. Even one hundred years ago traders used the technical analysis for the Asian markets trying to predict the prices for rice. Today we have a lot of different techniques and strategies for the technical analysis: Fibonacci levels, Elliot Waves, etc. Thought there is no single strategy that can guarantee you high level of probability. That’s why the opinions of the traders are very different as well. Some of them believe in technical analysis, some of them focus only on the fundamental analysis, some do both.
According to the recent researches, technical analysis is gaining its popularity. Most of the financial market’s studies are based on the candlestick charts, pins, tweezers, saucers and other terms that are specific for the technical method of markets’ analysis. In order to understand the laws that move the market, most traders will always refer to charts, formulas and indicators that reflect the market’s psychology and directions. Whatever method is dominant, the proponents of fundamental and technical methods will always blame each other for mistakes that they made in their own forecasts.
Source: http://www.hicow.com
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