Market Insight

Market analysis and insight are vital when it comes to determining when and which asset to trade. While the data is important, employing the type of market analysis is equally important as both technical and fundamental analyses have their share of advantages and benefits.

Technical Analysis
Technical analysis is a trading tool that looks at the price movement of an asset and uses this data to predict its future movements. It analyses statistics that are generated by market activity, such as past prices. This analysis is centred on three underlying assumptions, which are:
  • The market price reflects everything.
  • Price movements follow trends.
  • History will repeat itself.
Technical analysis focuses only on market prices, ignoring other factors that might affect the prices. Instead, it considers trends and patterns that are created by traders’ emotional response to price movements.
Fundamental Analysis

Fundamental analysis evaluates an asset’s value by examining related external data, such as economic, financial and other qualitative and quantitative factors. It takes a long-term approach in analysing the market, whereby it assumes that the short-term market is wrong and that the market price will correct itself in the long run.

Fundamental analysis is more commonly used by long-term traders as it helps them to select assets that will increase in value over time. The end goal of this analysis is to produce a quantitative value that a trader can compare with the asset’s current price, indicating whether the asset is undervalued or overvalued.