Investors and traders need to be constantly connected to the financial world in order to know which trades to make. Access to educational materials, up to the minute financial news, historical price and trends, and current economic conditions are essential to creating a profitable trade and to developing a successful strategy. So, where can you find all of this (and more)? Well, there are many outlets you can use to find the information you need in order to make good investment decisions. Following are some popular options.
No man is an island. And nowhere is this statement truer than in the trading world. Traders need to be connected to the financial world in order to make good trades. Access to up to the minute financial news, historical price and trends, and current economic conditions is essential to creating a profitable trade. Why? Because this information forms the backbone of investment research.
There are two types of investment analysis that investors and traders perform when playing the markets: fundamental and technical. Fundamental analysis is considered the standard approach taken by long term investors and by many, but not all, financial experts as it requires you to take a look at many different factors that can influence the value of an investment. Some of those things include:
The main idea behind fundamental analysis is that there are many different forces at work when it comes to the valuation of an investment vehicle. Fundamental analysts get a good look at the big picture by evaluating a lot of factors of an investment that pertain to the asset's value.
Technical analysis, on the other hand, takes a different approach when determining which way an investment will go. Those who subscribe to the technical analysis strategy rely on historical pricing, trends, and basic supply and demand to determine the future movement of an investment. Technical analysts are known as chartists in the financial world as they rely heavily upon charting to visualize movement. Technical analysis relies upon three basic principles:
The main criticism to technical analysis is that it does not take into account any factors that may affect stock prices other than past performance. But, technical analysts assume that past stock prices are a representation of all of the factors that could have affected that investment at that time.
Regardless of which style of analysis you choose, doing some sort of analysis is the only way to have a chance at making a profit by trading in the markets. You have to have a solid understanding of what you are investing in and why. While fundamental analysis seems like a lot of work, it is critical to making sure that you are making the best, most informed decision you can make when it comes to investing your money and making a profit. Technical analysis is also labor intensive, however for people who enjoy crunching numbers and locating patterns, it can be a great way to predict the future of an investment. The good news is that there are websites out there that will help you take the bite out of doing either type of research. These sites offer stock trading tools that will aid you in gathering the information you need to conduct your analysis, saving you hours of valuable time in research and organization -- time that could be used to take advantage of hot market trends and creating a profit instead.