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Charts
that
talk can help improve your trading
If
you’re short on time, but still need
to know exactly what the chart is saying, I recommend you watch the
video below on a new Talking Chart system.
A
patent is pending on this technology and the
users of the Talking Charts have flooded the company with emails and
phone calls of praise. The technology reads and analyzes the details of
the chart, then dictates the analysis right to you. As an added bonus
you’ll hear from 3 different HUMAN voices! No robots here.
Just great chart analysis to go along with very powerful charts.
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FUNDAMENTAL ANALYSIS
When trading futures and options, money is made by buying low and
selling high, or vice-versa. If you could predict prices perfectly,
then making money in futures and options would be terribly easy.
Unfortunately, predicting futures prices has proven to be anything but
easy. While most futures traders admit that it is impossible to predict
prices perfectly, most nevertheless believe that they can improve their
chances beyond a "pure guess". How they go about this differs from
trader to trader. Some use fundamental analysis, others rely on
technical considerations, while still others base their trading on gut
instinct or seemingly totally unrelated events such as celestial
movements. By far, the most commonly used methods of price prediction
can be grouped into either fundamental analysis or technical analysis.
ADVANTAGES
OF FUNDAMENTAL ANALYSIS
Intuitive Appeal:
Most of us accept the precept that one thing causes another. Using
fundamental analysis to predict futures prices has that precept as its
foundation, and attempts to identify the "causing" factors. In this
sense, the approach is intuitively appealing.
Objectivity:
Fundamental analysis is objective in that relationships are tested by
sound mathematical and statistical methods. Those that fail are
discarded, while those that pass are perceived as being credible. There
is no room for personal predilection or bias. The reliance on
objectivity is desired by many traders who hold little confidence in
their ability to predict prices purely by discretion.
Attempting to predict variables through fundamental analysis is not
exclusive to the futures trader. Companies attempt to predict sales,
governments attempt to predict unemployment and meteorologists attempt
to predict the weather. With all of these industries attempting to
harness the power of fundamental analysis, one benefit is a refinement
and improvement in the pool of fundamental analytic techniques
available. For instance, if a good technique is developed to predict
the weather, it can be applied to futures prices and, hopefully, yield
satisfactory results as well. This is exactly how Chaos Theory, a
particular type of fundamental analysis, moved into the realm of the
futures trader.
DISADVANTAGES
OF FUNDAMENTAL ANALYSIS
Data Intensive:
Fundamental analysis relies on a considerable amount of data to test
the significance of variables. Such data are often not easy to acquire
and, moreover, are seldom available without charge. As well, data are
often contaminated with reporting errors which must first be identified
and corrected.
Labor Intensive:
Fundamental analysis also requires a considerable amount of human labor
- time and energy. As well, methods have become so complex that few
individuals short of a trained economist can properly apply the
available technology. As an example, large banks often employ teams of
economists for formulating their in-house prediction models.
It is often difficult, even when data, time and energy are available,
to determine a relationship which is robust and which enables
satisfactory price prediction. This may be, in part, because so many
variables are linked together, each effecting the other, that it is
difficult to identify causal relationships. You may well spend a lot of
time, money and energy looking for a causal relationship, and never
find one.
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TRADING
EDUCATION
FREE VIDEOS from INO TV!
Click
Here |
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Did you
know?....
One of the
reasons why
futures were created was so that the retail trader could participate in
exciting commodities, some of which have made incredible gains, like
the stock market indices, the grains, gold, oil, and even orange juice.
Others are doing it...
Some are
dentists,
others teachers, still others are construction workers or stay-at-home
moms or dads. Some have university degrees while others, only a
high-school diploma.
Why learn about commodities?...
Because the
commodity
markets hold tremendous opportunity for profit. But there is also
significant risk of loss. Beginners must educate themselves and
determine if commodity trading is suitable for them.
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