Fundamental Analysis

There were times when fundamental analysis was considered the only sure way of analysis and decision making. It's hard to believe now, but once the technical analysis is not recognized by Wall Street and most of the rest funds and financial institutions, it was then something of a discharge fiction. Now, of course, everything is absolutely on the contrary, almost all experienced traders use technical analysis for the formation of their trading strategies for exception of units – net of fundamentalists. What is the reason such a big change? I'm sure all the guess that the answer is very simple: Money! The fact that trading decisions based solely on the fundamental analysis, makes it very difficult to extract the permanent gains. For those who are not very familiar with fundamental analysis, I will explain.

Fundamental analysis includes all factors that may affect the demand and proposal on the financial markets, using mathematical models that measure the impact of a factor on which the analyst draws conclusions about the price moves in the direction or the yoke. Problem lies in the fact that the factors influencing the price of one and the same time very much, and mathematical models are applicable to them often. Expectations of people who make the price move in either direction are not mathematical model. In addition, the model with its logical projection, based on all possible variables does not represent great value for the trader if he does not know it thoroughly, or does not trust her. In addition, large market participants, the so-called market makers who are able to move rates in either direction for your interest, do not ask how supply and demand factors were to affect the price at a certain time, ie Traders who are able to affect the price, do not operate under the fundamental analysis. Thus, using fundamental analysis, the analyst can make the correct prediction that the level at which Price will be located at a certain time in the future, but meanwhile, quotes can be so volatile that it can be very difficult or even impossible to remain on the market to achieve the target level.