Market Analysis: Main Types

• economic indicators: inflation rate, unemployment, GDP;
• financial indicators of a company: profit, revenue, profitability;
• conditions of a specific industry;
• political events.

Fundamental analysis allows for the assessment of the long-term development prospects of a company or industry, as well as the identification of potential risks and opportunities.

Useful tools for conducting fundamental analysis include economic calendars, statistical resources, and stock scanners.

Economic calendars are instruments that provide information about the timing when important economic indicators were released, their values (current, expected, and past), and sometimes relevant comments, descriptions, and assessments of their impact importance.

Statistical resources provide current and historical data on key economic indicators such as inflation rates, unemployment levels, GDP, interest rates, and other relevant information.

• providing insights into the long-term development prospects of a company or industry;
• identifying potential risks and opportunities;
• being grounded in objective data;
• applicability for long-term investment strategies.

• potential complexity and time-consuming nature;
• requirement for specific knowledge and skills;
• inability to guarantee 100% accuracy in forecasts.

Principles of technical analysis:  

• a price chart takes into account all available information;
• prices move in trends;
• history tends to repeat itself.

• RSI indicator – identifies impulses, overbought/oversold zones;
• Mirror levels principle activates when the previously broken support begins to act as resistance.

• providing insights into the long-term development prospects of a company or industry;
• identifying potential risks and opportunities;
• being grounded in objective data;
• applicability for long-term investment strategies.

• Relies on historical data that may not correspond to current market conditions;
• may produce false signals.

• The price of the financial asset (measured in monetary units, such as dollars);
• trading volumes (measured in the number of contracts traded per unit of time);
• time (you can choose the desired timeframe, for example, a 5-minute interval).

Analyzing this interaction enables you to assess the balance of forces between buyers and sellers in the current market situation. This operates on the law of supply and demand, expressed by the intersections of demand and supply curves on the axes of time and volume, as shown in the screenshot below.

Example. Let’s explore how volume analysis can be beneficial in the context of the futures chart for the Nasdaq stock market index.

1. Buyers make efforts to break through the resistance level. However, the upper shadows on the candles are long. The price drops to the levels where the efforts began – a sign of weak progress.
2. A new attempt by buyers. But judging by the delta indicator, their pressure has noticeably decreased compared to the first attempt.
3. Sellers promptly took advantage of demand exhaustion – this is evident in the increase in market sells.

From a technical analysis perspective, this is a double top pattern. However, the delta indicator provides a much more timely and reliable signal than classical technical analysis tools, such as moving averages. 

• it helps confirm or refute signals obtained from fundamental and/or technical analysis;
• it enables assessing the demand and supply balance on any market and timeframe, which can be useful for forecasting future prices in both short and long terms;
• it aids in identifying market fraud and manipulation.

• it can be complex and time-consuming as it requires analyzing a large volume of data;
• it does not always provide precise results, as trading volumes can be influenced by external factors such as news and exchange events.

• Indicators. ATAS offers tick-level granularity, enabling volume analysis with maximum accuracy. Some of the most useful indicators include: Cluster Search, Big Trades, and Speed of Tape.
• Cluster charts (footprints). By accessing information inside candlesticks, you can make more informed decisions compared to traders who only see 1-minute candlesticks. Additionally, you can experiment with timeframes.
• Working with the Tape and the DOM. Useful ATAS tools for working with Level II and Order Flow include Smart DOM, DOM levels, Smart Tape. Do not forget the indispensable tool for scalpers — DOM Trader.
• Beginner-friendly. The blog, YouTube channel, and Knowledge Base provide specific instructions on setting up and working with charts, applying indicators, developing strategies, and other valuable information for traders employing volume analysis. Additionally, ATAS platform users can rely on responsive customer support.
• Market Replay. You can set up a market simulator to replay historical data, practice analyzing available tools and trade on a demo account as if in real time. 

It is worth mentioning the capability to develop custom tools — indicators and automated trading strategies that can be connected via API. Thus, ATAS eliminates any limitations for analyzing cluster charts.

• fundamental analysis;
• technical analysis;
• volume analysis can be considered a branch of technical analysis, that has evolved into a separate and self-sufficient direction.

Each type of analysis has its advantages and disadvantages. No matter which approach you lean towards, it cannot guarantee a 100% profit.

• Be prepared for markets to behave differently than expected;
• Try combining various timeframes, types of analysis, and approaches;
• Use the ATAS platform, which helps you form your independent judgment about the current balance of supply and demand forces in the market, enabling you to make more informed trading decisions.

Download ATAS. It is free. During the trial period, you will get full access to the platform’s tools to experiment with market analysis. Moreover, you can continue using the program for free even after the 14-day trial period is over.

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