There are two conventional methods for analyzing markets. Fundamental analysis relies on news data, political as well as economic. Statistics such as interest rates, GDP reports, non-farm payrolls, election results, and natural disasters are used to forecast mid-term and long-term movements. Technical analysis includes all types of chart analysis, looking at moving averages and other such indicators. Technical analysts employ various strategies for analyzing the data, and their conclusions often differ. Neither method, fundamental nor technical, is superior to the other, and traders can combine and customize them based on their preferences.
- Although there exists an array of analytical techniques applicable to the stock market, two of them remain the most popular.
- These two techniques are fundamental and technical analysis. Chart analysis, as one example, falls under the general umbrella of technical analysis.
- Fundamental analysis makes use of all sorts of breaking news, with an emphasis on economic news, such as interest rate hikes and GPD data.
“Based on the preliminary statistics, analysis can be carried out and a forecast made about the behavior of the trading instrument after the publication of certain news.”