How to analyse the financial markets?

Modified on Thu, 22 Aug at 12:43 PM

As with any other type of investment or project you want to undertake, when investing in the financial markets, it is crucial to carry out a preliminary study that allows clients to decide with the most possible reliability to try to achieve success in said project.

What types of analytics exist in financial markets?

When investing in financial markets, each investor must conduct a prior study of the instrument to find out the situation and try to determine where the price can go. To do this, there are two basic types of analysis:

Technical analysis
Fundamental analysis

What is technical analysis?

Technical analysis is a method of studying financial markets that tries to anticipate or forecast the direction that prices will take based on the historical behaviour of the price of said asset.

Therefore, technical analysis will focus on analysing price action for chart patterns in the past and looking at how the asset performed at that time to try to determine the direction of the price at this time, given that one of the premises of the basics of this type of analysis is that history repeats itself.

In addition, technical analysis is also closely related to the use of technical indicators based on statistical calculations to determine the trend and strength of the price.

What is fundamental analysis?

If the technical analysis focuses on the study of the price over time, the fundamental analysis focuses on the general state of the economy based on the evolution of the macroeconomic and geopolitical data that affect both the financial markets and the economic policies of different countries and organizations affecting the trends of financial markets.

If investors focus on the stock market, the fundamental analysis will focus on quarterly and annual results data, income obtained, debt levels, dividend distribution, capital increases, acquisitions, mergers, etc., since these data can affect the performance of a share, so the final objective of fundamental analysis is to try to determine the actual value of an asset and therefore see if it is overvalued or undervalued since the listing price of a specific asset can differ from its actual price.

What tools do Admirals offer to analyse the financial markets?

We offer our clients various analysis and information tools in Admirals to support them in making investing decisions. For this, we have:

In addition, you can also access all our educational programs, among which you can find our webinars where current market situations will be analysed live.