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Trading Strategies
There are no right or wrong answers when it comes to making a trading decision, and the number of forces and influencing factors to take into consideration when carrying out a fundamental analysis could seem endless and overwhelming.

Investors often try and get an overall feel for a market and also rely on the forecast of other analysts whom they trust before they develop a view on whether a market’s price will go up or down - and if they should buy or sell it.

Which trading information sources can I trust?

Information and expert opinions on the markets are readily available in financial magazines and newspapers, and on the TV and internet. But it can take time for you to develop the skills and instinct to spot information that’s important and influential, and the information that’s just hype.

Forming your own opinions

So what are the types of things you might want to think about when forming an opinion of your own?

Let’s look at an example concerning oil:

  • What is the situation regarding supply and demand?
  • What might be creating a rise in demand or lack of demand?
  • What are the key supply considerations?
  • Who are the big oil producers and the big oil consumers?
  • Does the weather have an influence? Take the US for example, a big importer/consumer of oil. Is the country experiencing an unusual cold spell resulting in greater consumption of oil and a rise in prices?
  • Is there surplus oil stock available to meet the extra demand, therefore prices will not be affected? How might a political situation, e.g. war, in an oil exporting country, have an influence on how much they can supply and therefore affect prices?
  • Will the bombing of an oil rig, or accidental spillage in the sea cause people to panic about supply and cause prices to rise?
  • What factors have influenced oil prices in the past?
  • When will prices come down? Or will prices continue to rise?