Focuses statistics


Most traders operating in the market FOREX, preferred methods of technical analysis. This is perfectly justified, in the case of intra-speculation - fluctuations in exchange rates on 100-200 points in one direction or another are often completely random and unrelated to the fundamental trends. But it is quite another thing, if you're a strategic player, open a position in the direction of the main trend for several months, if not years ...

Fundamental vs. Technical

Your task is to create long-term investment portfolio consisting of bonds denominated in different currencies. Without an analysis of the fundamental factors in this case, you can not do, though, and methods of technical analysis should not be forgotten. Unlike intraday jumps, long-term trends in the international currency market is always evolving in line with the macroeconomic realities, but that they sometimes end very suddenly, and to predict the time of the fundamental methods of fracture is very difficult.

So it was during the Mexican crisis of 1995, when the real state of affairs in the U.S. economy could not foretell disaster. It happened in the autumn of 1998, when very few people could have predicted that a default in Russia will one of the biggest bankruptcies in the U.S. financial sector and trigger mass repatriation of capital in Europe and Japan.

In such cases, when the fundamental reason for beginning a sharp move unclear, should come to the rescue just chart analysis, and that the techniques should become a priority. But in a calm situation, only fundamental analysis can suggest the right direction long game, which then visually confirm schedules. On some methodological aspects of fundamental analysis of business cycles and I would like in this article.

The collapse of the fundamentals?

If a technical analyst basic input information are the prices and volumes, which are built on the basis of various indicators and charts are drawn, the fundamental analysis of the source material - a company's balance sheet (unless we are dealing with stocks), macroeconomic statistics (if we analyze the economy) and various market indicators (the structure of interest rates, spreads, etc.). Needless to explain that the quality of the starting material and the final result depends. The accuracy and completeness of input data should not, by definition, be no doubt, otherwise assess the value of the company or to forecast the economic trends is almost impossible. This year will go down in the history of the financial markets as the year of corporate exposures that result in question was posed basis of functioning of markets - confidence. Disaster Enron and WorldCom, and a number of smaller scandals led investors to think about what lies behind the figures of financial statements. The findings were very bleak. There is no doubt the mass character of the phenomenon of distortion of accounting data. There is no doubt in the fact that the concept of the market many companies are far from reality and, therefore, new shocks are inevitable. However, investors have put up with this bleak conclusion. Possible new scandals already included in the price of the stock market. Correction begins not only the principles of corporate governance, and approaches to the evaluation of companies, which will be already based on more conservative assumptions.