Fundamental or Technical Analysis?

What matters more Chart Analysis or Market Fundamentals? This is a tricky question.  They are both important. But it is very hard to congregate all the news that has to do with one commodity and then determine a direction. Often, we don’t know if the news are factored into the price or not and that is the second challenge.

On the other hand, technical analysis, does not require fundamentals. It is not predicative by nature and often lagging, but at times it can show support and resistance levels established, break of trend or continuation of a trend.  Most of the time price will get into a range which is either narrow or wide, and the “war” between the buyers and sellers will determine a winner and established a new direction.

Although we at our brokerage don’t live in a bubble and understand the nature of news and events, we prefer to make our decisions based on what the charts show and oppose to the “tips” coming from the news media. Often they write what has happened already and you just can’t trade on that.

In our decision making process we prefer to educate about the technical indicators and why we choose to go long and short the market. The news will always be there………

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