Methods of financial markets analysis

Rigorous planning and weighed approach are necessary for a proper Digital contracts trade. For this purpose, there are various kinds of market analysis that have been proved to forecast the price movement. They are fundamental and technical methods.

A fundamental method involves the analysis of the international economic relations, political, trading and financial news release. The main propulsion force is usual news, published on official sites, and which influences on different assets base prices.

In addition, it is necessary to understand which effect one or another fundamental factor has on a trading asset. For example, the news about oil reserves in the USA increase will move the oil price down, and gold will get more expensive. There are even more factors influencing the currency pairs quotes. That is why, the approach must be complex and weighed. A technical method of market research is fully contrary to a fundamental one. It, as opposed to the first one, is subjective and based on historical quotes analysis of a certain asset with the subsequent extrapolation into a graphic interface.

In other words, it is recording by means of additional instruments of a price behavior and, on this evidence, forecasting future movement. Nowadays, there are a great variety of graphic indicators of technical analysis. The main of them – indicators of value (oscillators), indicators of movement direction (trend), and indicators of turn.

However, the main mistake of many beginning traders is chaotic and ill-conceived using a great many of indicators and fundamental news, that are bulked on a graph and, as a result, only disturb a trader, giving false signals and distracting.

Therefore, the optimum decision in Digital contracts trade is work according to time-proved, profitable and effective strategies, such as:

Trend trading

It is the oldest, but still applicable strategy. Trend is your friend – this proverb has for long been used by experienced traders and experts. It is rested on basic things - if a previous local maximum was higher than succeeding one, - then a trend is descending, i.e. a price is decreasing.

And vice versa – if a local minimum is higher than a previous one, - a trend is ascending.

A strategy of the turn trade

This strategy is more suitable for experienced traders who have already tried themselves in traditional methods and want to enlarge their set of trading approaches. This strategy also involves obtaining a confirmation for a market entry from two technical indicators that have already shown their effectiveness and are time-proved.