While technical analysis focuses on the study of market trends, fundamental analysis focuses on the economic forces of supply and demand leading to price changes. The fundamental approach analyzes all relevant factors that affect the price of a financial instrument to determine the intrinsic value of this instrument. The intrinsic value is the price that the fundamentals indicate that this instrument is really worth, based on the law of supply and demand.
If the intrinsic value is below the current value, then the market is overvalued. If the intrinsic value is above the current value, then it is undervalued. Both approaches aim to solve the same problem: predict the direction that the price could take in the future. They simply have a different approach. While the fundamentalist study the causes, technical analysts study their consequences.
Most market operators are classified as fundamental or technical, but in reality tend to agree on many common analytical aspects. Most fundamentalists have at least a working knowledge of graphic analysis, while technical analysts remain aware of the fundamentals. The problem is that the charts and fundamentals often seem opposed.
Sometimes, at the beginning of major changes in trends, fundamentals do not seem to explain what the market is doing. It is at this stage that the two approaches are distanced and contradict more. As the movement develops in price, technical approach tend to converge again as shown by the Trade Alert Scanner.
The technical analyst is considered to have an advantage over the fundamental analyst, since according to the principles of technical analysis, studying the price action indirectly reveals fundamentals.
Application range
One of the great strengths of technical analysis lies in the fact that it can adapt to any financial instrument and time dimension. There is no area within the financial markets in which the principles of technical analysis associated with the Trade Alert Scanner are not applicable.
The technical analyst can simultaneously track as many markets as you want , using the same principles with minor adaptations according to the behavior of each. Similarly, the theory is applied in much the same way for any graphics from the very long-term, such as monthly or bi until intraday graphs. Asian option is a type of option with which the exercise price is determined on the basis of the average value of the underlying asset for a specific period of time.
Typically, these options are linked to commodities, stock indices, exchange rates and interest rates. Asian options are popular in markets with high volatility of the underlying assets (oil, non-ferrous metals, etc.).
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