Multifactorial analysis of the Forex market
Multifactorial analysis of the Forex market is a multifaceted analysis approach that studies the relationships between significant variables that affect a particular financial asset.
Conventionally, all approaches to the analysis of the financial market are divided into technical and fundamental.
The technical approach is based on the signals and patterns of indicators and directly depends on the price chart, so called computer analysis.
The fundamental is aimed at analyzing the statistical data of the economy and the statements of various kinds of officials who can influence the market.
With all the differences, these approaches are very often intertwined in attempts to take into account different signals of different approaches. At the same time, even the most vehement fans of both approaches agree on the statement that “The Price takes into account everything!”.
“The price takes into account everything!”
In fact, it can be said that the price chart is a graphical interpretation of known and unknown variables that have a direct impact on a financial instrument over a certain period of time.
To say easier in means that the actual price is the result of many fundamental and technical factors. This actually confirms the inalienability of technical and fundamental market analysis approaches.
Multi-factor analysis of the Forex market involves combining these approaches and even a little more. But, due to the comprehensiveness of the analysis, the question of expediency arises. Since it is virtually never possible to take into account all factors due to the huge amount or lack of data.
So, armed with an army of analysts and journalists, there is no guarantee that they will take everything into account and find out. Also, with a variety of approaches and various kinds of signals, a high degree of uncertainty will arise when the signals of different analysis systems will give conflicting signals.
Therefore, there is no real value in studying and analyzing little influencing factors on the market. The value of this approach is to take all the most important from the approaches and combine it. In turn, this should give a positive result.
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