There are several types of prices on the market of raw materials, capital and currencies. All of them are published in periodic economic editions daily. These are the prices of futures and auction transactions, spot and forward prices for real activities.
For the participant of entrepreneurship, it is important to know how the price of stock exchange contracts is determined, since the pricing system in the latter is significantly different from those that I use with the forms of trade organization.
In order to become stock, the goods must comply with the following conditions:
by quantity: The amount of goods is determined in the agreement in natural units of measurement, the actual sale of goods is called the lots;
by Quality: The quality of goods in the agreement is determined by the standard and technical conditions, the terms of the contract, according to the preliminary inspection of the goods, as well as on samples. An outstanding factor in standard quality would be stockpool is the introduction of a basic variety as a single measure. It is the criterion on which they give a qualitative characteristic similar goods. For the price of the basic variety, the most common type of production of the CO character is adopted;
by liquidity: the goods must be absolutely liquid, that is, it can be bought and sell at any time;
by mass: the product participating in stock trading should be nonmonopoly, that is, mass
Reception of goods and their placement are negotiated by the rules of exchange trading. Members of the Exchange offer their goods after it is directly inspected by brokers in enterprises or on the basis of samples presented with samples or descriptions. The goods are entered into the bookkeeping book and the PM broker cards only in the case of a guaranteed amount of goods in stock exchanges, as the corresponding mark is made, or in the seller's warehouses. In the Avila Exile Trade Avila also approves the list of goods that are listed on the Burgher.
The sale of goods on the stock exchange consists of a stock exchange deal
. Exchange deal - This is a written document for the real goods with established deadlines Deliveries. The agreement is considered to be stock exchange if it is concluded between members of the Exchange on the goods allowed to appeal to the Exchange provided by the Exchange, the ATP in accordance with the term and order defined. Charter and. Exchange Trade Rules (an example of a exchange contract for a futures transaction is given in Appendix. N).
Agreements registered on the stock exchange are not subject to a notarized certificate, but are approved general meeting Exchange. The content of the stock exchange transaction (except for the name of the goods, quantity, prices, places and the factor of the execution) is not subject to disclosure. This information can be provided ?? only at the request of the consequences and court bodies. The agreement is considered concluded from the moment of its registration on the stock exchange. Exchange operations have the right to carry out only members of the Exchange or Brokercheri.
The view of the stock price is determined depending on the ratio of supply and supply at the moment of exchange trading. The stock exchanges are used on the stock concept: the price of the seller (suggestions), these and the buyer (demand), the price of the exchange agreement, the quotation price.
. Price of the Seller on stock goods-This, specified by the participant of exchange trading in the sales application (see Appendix. M), as well as named after him during trading in order to stimulate the sale
Under the price of the buyer, the prices specified by the Buyer in applications are understood (see Appendix. N) about buying, as well as those that he calls directly during trading, when discussing the proposal of the Seller
The price of the stock exchange transaction is the final of those who were named by the buyer (seller) and recorded by the stock exchange broker
As noted earlier, the price of exchange transactions (exchange goods) is the price for which transactions are carried out by the sale and sale of large batches of material and raw materials, production and technological products with the exhaust, agricultural products, consumer goods on commercial exchanges. Such a price is formed on the basis of exchange quotes (supply and demand) and allowances or discounts from it, depending on the quality of the goods, the distance of the goods from the delivery site, which are indicated in the stock contract. The agreement at the price concludes the one who first accepted the offer. To complete the operation, neither three parameters should be charged: the price, amount and delivery time.
The price of exchange transactions is one of the types of free prices, allowing to fully identify demand and supply to the goods on the scale of the region, the country and the world market both at the time of bidding and the future period. In the countries of S. market economy The prices of exchange quotes are regularly published in the periodical press and electronic information network.
the dependence of the type in the agreements concluded on the commodity exchange, there are two types of stock prices: prices for real goods and prices for futures, or urgent transactions. In turn, the prices of real products The separation is made on the price of spot ("Cash" -Delts) and forward contracts.
The price for a spot contract is the price of the existing standard product, which during the week after concluding the transaction is supplied to the certified stock exchange rate at the expense of the seller. Payment for this M contract must be carried out within two days after the conclusion of agreements.
In the practice of foreign market economy, the forward contracts occupy a certain place.
. Forward contracts - these are contractual obligations of individuals from over-the-counter turnover about the supply of goods in the future without a kind of official guarantor
The price for a forward contract is the price for the delivery of goods in the future (in a month, three, six or nine months). As with the spot contract, the payment for goods must be carried out within two days after the conclusion of the transaction. The feature of the transaction on the conditioner condition is the time difference between the conclusion of the transaction and the supply of goods to the buyer. Therefore, such transactions call more agreements with a delayed post of Economics. In the case of imprisonment of the forward transaction, the buyer is advantageous by the seller for the goods of certain qualitative characteristics, which it must work out and put at the set time. So, the agricultural goods of the OvrIbnik may sign a contract for the supply of grain of certain standards during the harvest period at a prerequisite price. Such a forward contract allows you to guarantee a favorable price for the buyer, and for the producer - to replenish cash To implement the production process. In addition, the advantage of the conclusion of such agreements is manifested in a significant cost savings for storing products. In m. Iru formation and development market relations In Ukraine, the volume of forward transactions will grow. In the trade of real goods forward transactions, as a rule, dominuutomine.
. Futures transactions concluded between the buyer and the seller in order to insure the possible increase in prices for it on real market. The goods can be implemented at different prices. Pricing system in financial. Fusion of the RAS Contracts is significantly different from those used in conventional commercial operations.
The price for a futures transaction is the price for a standard contract, which provides for the delivery in the future of certain amounts of a certain type of product certain qualitative characteristics. Futures transactions are standard typical contracts. The price of such a contract is determined in the public auction on stock trading. Unlike transactions for real goods on futures transactions, not real goods r, but only an agreement on its possible delivery in the future period. The conclusion of such agreements is not carried out in order to purchase real goods, but for insurance against possible adverse price changes. Practice shows that the overwhelming majority of futures transactions have a fictitious nature, since only 2% of transactions are completed by the supply of goods, and the rest - the pay difference in prices. According to the feathering transaction of the reinforcement between the price of the contract at the time of its conclusion and the real price of the contract for the end of the contract, pays or the buyer, or the seller. If during this period the price will grow, such ??, Nice pays the seller. To do this, he concludes an offset, or the oncoming (opposite) agreement providing for the purchase of the same batch of goods on a new, already a real price at the time of the expiration date of the futures transaction. The buyer also concludes an offset deal for the sale of the same batch of goods at a new price and receives a won difference. When the price is reduced, the action happens on the contrary. At the time of the conclusion of the offset transaction F "Futures Agreement liquidately).
In order to insure the possible losses due to changes, when carrying out contracts for the real goods of exchange operations, hedging is used - a counter commercial operation for the sale of goods of the relevant quality at the corresponding price.
From the price of the baseline variety, the term transactions concluded on a pre-agreed amount of goods, the supply of which is a stock exchange document containing clearly defined responsibilities of the parties of the price. Such transactions are called warranty.
On the trends of price changes on goods are judged by pricing in warrants
The order for the purchase or sale of goods comes directly to the exchange brokers in the trading room by phone or fax. A bargaining broker member of the exchange can come with a package of customer orders. Customer ki can accompany their orders to various instructions: an indication of the minimum or maximum price, the number of contracts for sale or purchase, guidelines for the replacement of contracts, etc. For a speech, the time of receipt of this document is indicated by a broker in the "pit" when entering the broker's transaction In a special form code number of your contract, when conclusion of the transaction, month of delivery, price volume of goods. These data are immediately transmitted to those present in each "pit", observers of the stock exchange and the computer accounting system. Information about prices is demonstrated on a special scoreboard of the trading room of the exchange, and is also transmitted to other stock exchanges and through the exchange services of information - the media.
Exchange quotes are outstanding prices of stock exchange transactions concluded on the standard number of standardized goods provided for by the Rules of Exchange Trade in the Exchange "Jama" on the official hours of RO. Owning stock exchange. The quotation price is the price determined by the exchange commission of the Exchange by analyzing the prices of exchange agreements, sellers prices, customer prices on the basis of uniform criteria and special techniques. They differ in quotes official and outside official.
The official quotes are carried out at the prices of exchange agreements on certain stock exchange group of standard quality products with a single supply basis for each exchange product. The definition process is official. The quotier of RUTOs prices provides an objective assessment of price fluctuations during the exchange day.
According to a certain day of a certain product, with a large number of transactions, the quotation price is calculated as mid-price Transactions
The market situation is determined on the basis of its three characteristics:
The ratio of supply and demand;
Trends in price movement during the exchange day;
The number of perfect transactions
Outdoor quotes (reference) is carried out on the basis of price analysis (demand, suggestions, agreements), taking into account the assessment of the Communal Commission of Sustainment Conjuncture and Proposal Suggestions for the Torma, Typical on the stock exchange for a specific period of time price on a specific view (group) of the goods (cat Iruvalna price of the stock exchange.
Reference, or quotation price is not a formal or firm price of the stock exchange, but only reflects the opinion of the quotation commission on the most typical price
The reference quote can be carried out on the basis of the results of several stock trading. These quotes cannot be appealed to members of the Exchange and changed by decision of the Exchange Committee. Controversial issues arising during the trading are considered by arbitration commissions.
Data official quotes are notified on the exchange of the next day after the bidding
By the decision of the exchange commission, the Exchange has the right to establish limit levels of price fluctuations on goods that are officially listed on the stock exchange, the deviation from which the basis for stopping the bargaining on this is the product ID.
Especially it should be noted among the agricultural stock exchange acting in Ukraine
. Agricultural exchange - This is a kind of commodity exchange. It employs the same participants, it has the same functions as in the commercial exchange. Trade agreements, the procedure for their conclusion and execution, trade technique, other issues of the organization of the anization and operation of commodity and agricultural exchanges are largely coincided.
Exchange trade in products agriculture as a specific and very important industry national economy It is carried out in accordance with the Rules of Exchange Trade, approved by the Order Minister of Agriculture and Food of Ukraine and. Ministry of Finance of Ukraine No. 103/44/62 from 3041996 p. This is the main document that regulates the procedure for the implementation of exchange operations regarding trading in agricultural products, establishes the rules for trading for trading participants, officials And Exchange workers, determines the content of the exchange agreements and provides guarantees of their implementation. Rules are mandatory for all exchanges. In addition, the stock exchanges can approve their rules only provided that they do not contradict typical. Rules. Rules are developed on the basis. The Law of Ukraine "On Commodity Exchange", other laws of the act Aktіv.
For each type of agricultural product prices, depending on the ratio of supply and supply at the moment of exchange trading. At Agro, the Exchange uses the same price concepts as in the commodity exchange: the price of the seller (suggestions), the price of the buyer (demand), the price of the exchange agreement, the price.
The level of prices for the purchase of agricultural products and food for state needs should be determined taking into account the weighted average prices based on the results of previous trading
. Questions and tasks
1. What is the main goal of the activities of the commodity exchange?
2. What is the meaning of stock prices in the global economy?
3. What requirements are presented to the exchange product?
4. What types of stock prices. Are you known?
5. Describe the procedure for the conclusion of stock exchange transactions.
6. What do the official and official quotation differ?
7. What are the features of the agricultural exchange in Ukraine?
Analysis of the exchange price approaches to the analysis of exchange prices Fundamental analysis The emergence of technical analysis from how people began to trade in various goods - grain, metals or shares, for example, merchants noted regularity in time spending, such as trends (trends) and models. Over time, the sayings were born like this: "
The Trend Is Your Friend "(" Trend is your friend "). What do they mean how true they are why people are generally learning graphics of stock price? Market participants try to get the maximum income from their investments and profits from their transactions. They study various methods. that would help reduce the risks of the loss of money and increase the chances of success in trading. Is it possible to determine the moment when it is profitable to buy, and when to sell securities profitable?
Trading participants are studying graphs and analytical tools to determine changes in the demand for securities and offer to them. It helps to predict the possible price movement and formulate strategies for all financial markets. To understand the theory of DoOU, it is necessary to study six major postulates with which most analysts are already familiar: 1. The price takes into account everything. According to the theory of DOU, any factor that can affect the demand anyway
or a proposal, invariably find its reflection in the price. Regardless of the nature and causes of events, they are instantly taken into account by the market and are reflected on the price dynamics. 2. There are three types of trends in the market. The definition of the trend that gives dough is as follows: with an upward trend, each subsequent peak and each subsequent decline above the previous one. That is, the upstream trend must have a curve form with consistently increasing
peaks and downsion. Accordingly, with a descending trend, each subsequent peak and a decline will be lower than the previous one. Such a definition of the trend is still fundamental and serves as a starting point in the trend analysis. Also, DW allocated three categories of trends: primary, secondary and small. He attached the greatest value primary, or the main one. The main trend lasts a few years and can be both a "bullish" and "bearish"
The movements of the second order lasts from a few weeks to several months and can go in the opposite of the main trend direction. Third-order movements are fluctuations with a period of several days. 3. The main trend has three phases. A market trend includes three phases. The first phase, or accumulation phase (accumulation), when the most far-sighted and informed market participants begin to buy first. The second phase occurs when investors are joined by price increases,
using technical methods following trends. Prices are rapidly increasing, and the perception of this market is becoming increasingly optimistic. Then the trend is included in its third, or the final phase, when the general public comes into action, and the market begins in the market, heated by the media. It is in this stage that informed investors who bought during the first phase when no one
i did not want to buy, begin to "distribute" (Distribute), that is, to sell, when everything, on the contrary, try to buy. 4. Indexes must confirm each other. In the original, DW meant industrial and railway indexes. In his opinion, any important signal to increase or decrease the course on the market should be held in the values \u200b\u200bof both indices. In other words, the beginning of an upward trend can be said only if
the values \u200b\u200bof both indexes blocked their previous intermediate peaks. If this happens only with one index, it means that we talk about the trend towards an increase in the market early. If indices show different dynamics, it means that the previous trend is still valid. Currently, this principle of theory of the DOU is expressed in the need to confirm the signs of a change in the trend with additional signals. 5. Trade volume must confirm the nature of the trend.
Trade volume, according to DOU, is extremely an important factor To confirm the signals obtained on price charts. If the main trend goes up, the volume increases in accordance with the increase in prices. And on the contrary, the volume decreases when prices fall. If the main trend is reduced, then everything happens exactly the opposite. In this case, the decline in prices is accompanied by an increase in volume, and with intermediate revitalization prices, the volume decreases. However, it is necessary to once again note that the volume is only secondary
indicator. Signals for buying and selling, on the theory of DOU, are based exclusively at closing prices. Volume indicators pursue one main goal - to determine in which direction the volume increases. And then this information is compared with the price dynamics. 6. The trend is valid until it serves explicit signals that it has changed.
This provision is essentially undergoing all analytical methods for the trend. It means that the trend that has begun movement will strive to continue it. Of course, to determine the signals of the trend fracture is not so easy. But analysis of support and resistance levels, price models, trend lines, moving averages - all this, among other technical instruments, will help you understand that in the dynamics of existing
the trends outlined a fracture. And with the help of oscillators, the signals that the trend loses force, can be obtained even earlier. The likelihood that the existing trend will continue, usually higher than the likelihood that it will change. Following this simple principle, you are more likely to be right than wrong. On the basis of the past, it is impossible to reliably predict the future. Technical analysis considers the likelihood that in this situation will be achieved
the result and in some cases this probability is very high. The first known case of recording the dynamics of prices with its subsequent analysis is attributed to the inventor of the method of "Japanese candles" Munekhis Homma (end of the 18th century). But the foundations of the classical technical analysis, its principles were first set out in the works of Charles Dow in the late 1890s. These works were published in newspaper articles only in 1900-1902
years. Dow worked on the New York Stock Exchange and used its methods for analyzing the American stock market. It was he who subsequently organized the Dow-Jones information service and the Wall Street Journal newspaper. Universal principles of technical analysis described by DOU make it possible to use it for a wide range of tools in almost all markets, graphics can be used to analyze for a period of time from minute to a year.
The principles of technical analysis are easy to learn, they are very logical. Modern technical analysis, built on the principles of Charles Dow, is a powerful tool for predicting the possible dynamics of prices in the future. From the time of Dow it was supplemented quantitative theory - Fibonacci numbers, Gunn Rays; Wave the theory of Elliota; technical indicators; Candle analysis; Methods
capital management and risk reduction and so on. But still his goal, like a hundred years ago, reduce the risks of the loss of money and increase the chances of success in trade. So - Teach Technical Analysis! The subject of the research of technical analysis is to change the dynamics of stock prices in the past to determine which it will be in the future, while the fundamental analysis studies the economic forces of supply and suggestions that cause fluctuations
prices and make them go up and down, or remain at the existing level. In the fundamental approach, all factors that affect the price of the goods are taken into account to determine the inner or valid cost (in the stock market, the goods are securities). The fundamental analysis claims that it is this actual value and reflects how much a particular product should actually cost. And if the actual value is lower than the market price of the goods, it means that
the goods need to be sold, as they give more than it really is. If the actual cost above the market price of the goods, then you need to buy, for it is cheaper than it really is. This proceeds solely from the laws of supply and demand. Both of these approaches to forecasting the dynamics of the market are trying to resolve the same problem, namely: to determine in what direction the prices will move.
But this is suitable for this problem from different ends. If the fundamental analyst is trying to figure out the market movement, the technical analyst is only interested in the fact of this movement. All he needs to know is that such a movement or changing market dynamics occurred, and what caused it - not so important. But the fundamental analyst will try to figure out why it happened. And many specialists working with stock goods (securities, various
futures, currencies, etc.), traditionally refer themselves either to technical or fundamental analysts. In fact, the border is very blurred here. Many fundamental analysts have at least the initial skills analysis skills. And even there is a humorous statement that if you have ever been brought to the graph of stock price, then you have already made it graphic (technical) analysis. At the same time, perhaps, there is no such technical analyst, which at least in general terms did not imagine
the main provisions of the fundamental analysis. (Although still among the latter there are "fighters for faith," they are called "purists" in the USA, they seek at any cost to prevent "fundamental infection" into their technical and analytical sanctuisa). The case is that very often on the first (sometimes - superficial) look, these two methods of analysis really come into contradiction with each other.
Always at the very beginning of some important movements, the behavior of the market does not fit into the framework of fundamental analysis, and at that time cannot be explained on the basis of economic factors. It is in these, the most critical moments for a general trend, two types of analysis - technical and fundamental - and diverge the most. Later, they will coincide with phase, and thoroughly all the incident find quite a reasonable justification, but, as a rule, too late for right action trader.
The only explanation of this apparent contradiction is the following: The market price is ahead of all known fundamental data. In other words, the market price serves as a leading indicator of fundamental data or considerations of common sense. At that moment, when the market seem to take into account all the well-known economic parameters, begins new process And, at first almost imperceptibly, and then - on the growing, prices begin to respond to some
completely new, not yet known factors. The most significant periods of growth and falling prices in history began in the situation, when nothing or almost nothing, from the point of view of fundamental indicators, did not foretell any changes. When these changes became understandable to fundamental analysts, the new trend has already developed in full force. A competent technical analyst always knows that sooner or later the causes of the market dynamics will be known to everyone. But it will be later.
And now he can not spend time on waiting for this additional confirmation of his own right. Thus, the analysis of graphs of stock prices, in fact, becomes a simplified form of fundamental analysis. Fundamental and technical analysis, being a reflection of the same process, distributed among themselves "spheres of influence" as follows: The first studies the deep reasons for the development of macroeconomic phenomena, and the consequence of the dynamics of such a development becomes a change in stock prices, and here, the second
the type of analysis, examines the ways and the laws of their behavior. The founders of the Western theory of fundamental analysis are considered to be Benjamin Graham (David Dodd) and David Dodd (David Dodd), which in 1934 in the United States published the book "Analysis of Securities". The concept of "fundamental analysis" was first introduced in this book,
and the definition is given as a tool for the prediction of future stock prices for stocks. Later, in scientific publications it was given a definition of a fundamental analysis as a process of studying the state of the economy, the industry and the financial situation of a separate company in order to determine market value Its shares. Assessment of many external and internal factors that significantly affect the financial and economic activities of the company, the results of which are reflected in the market value of its securities, and
it is a fundamental analysis. Such factors include the activities of competitors, and the political situation in the country, and the effectiveness of management, and strict compliance with the rights of shareholders of the Company, and the financial position of the company, as well as many other factors. The main objective of the fundamental analysis is to determine the current market value of the security for the adoption of relevant investment decisions.
Here is what William F. Sharp says, Gordon J. Alexander and Jeffrey V. Bailey in his book "Investments": "The fundamental analysis comes from the fact that the" true "(or internal) value of any financial asset equal to the present value of all cash flows that the owner of the asset expects to receive in the future ". In other words, it is about estimating the value of the share of the issuer on the basis of
analysis of the company's ability to profit. At the heart of the fundamental approach to the analysis of shares lies the postulate that the shares of successful companies grow in price, while the value of the shares of unprofitable enterprises falls. The shareholder is a co-owner of the business, therefore, the more profitable business becomes, the more expensive the share in this business (shares) should be. And, on the contrary, if the company continuously carries losses and increases its debt to creditors,
the cost of such a company will decrease. A prerequisite for the effective application of the method for assessing the value of shares is the information openness and transparency of the economy as a whole and companies in particular. Any corporation whose shares are freely addressed in the stock market, is obliged to quarterly publish the results of its commercial activity - turnover, income, main positions of the balance sheet. The better these indicators will be relatively similar indicators of other companies, and the greater
the number of potential investors will familiarize themselves with them, the greater the number of investors want to invest their funds in the shares of this enterprise. The more willing to buy, the higher the demand. The higher the demand, the greater the prerequisites for the further growth of the share of this company in the market. It follows that the fundamental analysis of shares is based on the process of collecting and processing information to determine the value of the stock and this process is to highlight and evaluate each factor affecting
on demand and offer on the stock market. At the same time, it is necessary to assess the flexibility of supply and demand, the state of the country's economy, to identify external factors determining the demand and proposal for a specific asset, for example, oil prices, political events in the world, war, inflation, general price level, loan availability. The objectives of the fundamental analysis is to determine the degree of underestimation or rewardness of the share of the issuer on the basis of the analysis of cash flow generated by the Company.
The result of such an analysis will be the decision-making of the securities portfolio. Full fundamental analysis should be built on a three-level basis: 1. Analysis of macroeconomic factors: o state national Economy; O. Economic policy states; o political situation; o legal regulation; o The conjuncture of world commodity and financial markets.
2. Analysis of sectoral factors: o Competition within the industry; o current cyclicity; o Stage of the life cycle and the state of the industry. 3. Analysis of microeconomic factors: o management management; o Business Building Model; o Market Product Niche; o technical condition used technology; o Scientific and innovative potential; O.
Financial condition; o Investment projects; O. Dividend Policy; o Structure of joint-stock ownership; o Corporate governance quality; o Transactions with company shares. For the use of a fundamental analysis of shares by a portfolio investor, it is necessary to have a mature efficient securities market, which is expressed in the presence of liquidity, sufficient capitalization, developed infrastructure, etc. The genus passes, and the genus comes, and the Earth is forever.
The sun rises, and the sun comes, and hurries to the place in its place where it goes back. There is a wind to the south, and goes to the north, it spins, spinning on the go, and the wind is returned to its circles. All rivers flow to the sea, but the sea is not overflowing; To the place where the rivers flow, they return to flow again ... what was, it will be; And what was done, it will be done, and there is nothing new under the sun. Ecclesiast despite the fact that the first stock exchanges were registered in
Europe is already in the XVIth century, with a small stretch, the date formalization of the title "Technical Analyst" - a profession engaged in the study of graphs of exchange prices can be considered a relatively recent 1972 year. It was then that in the United States the oldest "Association of Technical Analysts" was organized in the world. But here is the story of the appearance of the most technical analysis goes on its roots in a distant past. And the first public "benefit" for technical methods became
a collection of proverbs (in poetic form), published in 1755 in Japan, called "Confidential Financial Documents of the Three Monkeys". The legendary Japanese trader - Munekhis Homma (another version of the pronunciation of the name - Honma Soku), being a successor of the famous merchant dynasty and engaged in trading futures in rice, so professionally approached the case, which he studied (learned, systematized and analyzed)
prices for rice for the entire previous century. He led perennial observations of weather conditions on the Japanese Islands. Moreover, he created his own communication system - at the agreed time he set his people on the roofs of the houses that the signals were transferred to the flags. It is not surprising that he managed to make more than one hundred successful trading transactions in a row, (and the transactions were then lasted for months). He became the richest man in the empire, the financial advisor of the government and
he was granted an honorary title of samurai. His authority was so great that the song was popped about him. The books written by him in the second half of the XVIII century marked the beginning of the "Method of Candles", which is still widely used in Japan. And with the light hand of Steve Nison, now all over the world. But so historically it happened that the results of centuries-old research of Japanese traders became known
mire is only in the last three decades. Eastern investment science and Western School of Chart Analysis developed independently of each other, but it is more noteworthy that they came, in many respects to similar conclusions. The same Japanese "candlesticks" and American "bars" are very similar to each other. Although it was in North America that, exchange prices were once in very unusual, independent of time, the form - and it was called: Digital graphics, acknowledged by Russian traders
- "Cross-Znoliki". But in those distant times, in the eighties and nineties of the year before last, he was called the "book method." The "Book Method" was one of the options for the old way of reading prices from the telegraph tape, known as "TAPE READING). But already in 1896, Wall Street Geornal began publishing daily exchange prices: maximum, minimum and closures,
what can be considered the date of appearance "Bar". In the Russian literature, graphics composed of bars are called columns. Most of the currently used technical methods appeared in the United States, and in many respects the beginning of the fact that we now call technical analysis, put Charles Dow. In fact, an overwhelming part of what we integrate now under this term, so or
otherwise, it follows from the theory of Charles G. Dow. We bold his theory can be called the great-grandfather technical analysis. And in the current world, literally polished computers and the latest technologies, when all the more advanced indicators come to the rescue of technical analysts, the ideas of DOU still find their use. Many technical analysts simply do not suspect that the considerable tolik of their allegedly new tools is based on, in fact, the principles of the laid
Charles Dow. On the detention of the XIX century, it was originally initially outlined in the editors of the legendary "Wall Street Georn", whose chief editor he was. Already after his death, these peculiar "rolled stock market" acquired a more organized and finished view in the book of comrades and the successor to Dow - William Hamilton. Under the name "Barometer of the stock market" she came out in 1922.
And the theory in the book of Robert RIA "Theory Dow" received its further development of the theory. Initially, the principles created by Charles Dow were used exclusively for analyzing the stock indices created by him (read on the stock market): rail and industrial. But subsequently it turned out that with the same success most analytical conclusions
DOU can be applicable in the market of commodity futures. And over the past thirty years it has become clear that international currency markets have confirmed their versatility. And actually stock indexes, despite the extremely skeptic attitude towards them, Dow contemporaries, have become independent instruments that determine the temperature of the national economy or a separate industry. They were introduced into the "operation" all developed, and not so, the countries of the world.
They became loyal indicators looking into the future. And if at least one of us seriously treated the Russian stock index of the RTS in early 1998, then maybe it would be possible to avoid the consequences of a serious August catastrophe. Talking about the history of the development of technical analysis of exchange prices, it is impossible not to mention Ralfe Nelson Elliot. He called himself a follower
Doe and considered his " Wave theory"The development of its" principle of accumulation and distribution ". It was Elliot that introduced the concept of the" golden section "into the technical analysis than the real revolution was performed. For the first time, the rules for the exact numerical relationship of various phases of the growth of stock price and their subsequent fall were proposed. Considering that true driving forces stock price in the long run (meaning years) are fundamental economic factors, then on medium and short-term
the intervals of Her presents the real element of feelings. Baruch - Advisor to American presidents, who became a multimillionaire thanks to operations in the stock market, said several surprisingly accurate words about his nature: "But that in reality is imprinted in fluctuations in the stock market, it is not the events themselves, but the human reaction to these events. Reaction on how, according to millions of individual men and women, the events occurring may affect
the future stock market is, among other things, people. People trying to guess the future. And just their impressionability makes the stock market so a dramatic arena, on which men and women perform with their conflicting judgments, their hopes and fears, advantages and disadvantages, greed and ideals. And when we suddenly notice certain patterns at various time intervals, then involuntary
you begin to think about the question: And what really studies a technical analysis? Economic events or human emotions arising from these events? The famous trader Jess Levermore noticed that the whole is better seen from afar. Technical analysis allows us to take a step back to in a new way and, perhaps, to appreciate the situation not only in the market, and maybe in life. Economic behavior of the masses - this is probably the right
the answer to our question. And if you consider the stock price, as the most bright and sensitive indicator of this behavior, the technical analysis of the figures is measured in immeasurable - emotions: fear and greed, stupidity and wisdom, patience and intolerance. This beautiful and very interesting science. Science about life! In recent years, with the development of computer technology, many sections of technical analysis seemingly firmly forgotten, gained a new life due to the sharp facilitation of their calculation, as well as
free automatic verification of their effectiveness at large historical intervals.
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Introduction
1. The concept of stock price
2. Analysis of stock prices
2.1 Approaches to Exchange Price Analysis
2.2 Fundamental analysis and technical analysis
3. Causes of price fluctuations on the stock exchange in the Russian Federation
3.1 Pricing for certain types of securities
3.2 Prices on the Stock Exchange and the reasons for their oscillations
3.3 Practical analysis of relationships stock Exchange: MICEX and RTS
Conclusion
Introduction
Questions about what the stock exchange is and what signs are part of the concept of her, first of all, of course, are important for legislation. There is a special need for legal definition and differentiation of various trading assemblies, because The economic importance and efficiency of the stock exchange is simply obvious (it suffices to turn to the turnover of the exchange and compare them with the main macroeconomic indicators of the state economy (for example, GDP)). It is also obvious that the Exchange is a business entity and maintains economic activities (stock), speaking by an intermediary between buyers and sellers. In this regard, the Exchange has certain, but rather specific, rights and obligations. The specifics of rights and obligations are explained by the same economic isolation and importance, and, consequently, the supervision of the state.
Since people began to trade in various goods - grain, metals or shares, for example, merchants noted regularity in time spending, such as trends (trends) and models. Over time, the sayings were born like this: "The Trend Is Your Friend" ("Trend is your friend"). What do they mean how true they are why people are generally learning the graphics of stock prices?
Market participants are trying to get the maximum income from their investments and profits from their transactions. They study various methods that would help reduce the risks of losing money and increase the chances of success in trading. Is it possible to determine the moment when it is profitable to buy, and when to profitably sell securities? Trading participants are studying graphs and analytical tools to determine changes in the demand for securities and offer to them. It helps to predict the possible price movement and formulate strategies for all financial markets.
1. The concept of stock price
Depending on the type of market on which prices are formed, they are divided into price of commercial auctions, stock price and trading prices.
Prices of product auctions. The auction is auction organized in a special place on the designated deadlines for the implementation of certain goods, i.e. it has a narrow specialization, the number of sellers at auction trading is limited, and the buyers are many. Auction price is the price of a public sale according to the sustained buyer's level. The batch offered for the sale of the goods (lot) is pre-examined by buyers, and in the process of public trading as a result of competitive competition between buyers, the level of auction price is determined. The prices of the auctions are used in commerce with fur and fur products, tea, precious metals, Forest, agriculture, fisheries. The objects of art, antiques are being implemented through auctions. Thus, the main difference between the auction price is the formation of its level in the process of a strong competitive struggle, as a result, the auction price may be higher than the market and often it multiplies the originally appointed, since reflects the unique and rare properties and signs of goods, and also depends on Mastery of auctioneer.
Stock prices fold in the trading process on stock exchanges. Stock exchange - a specially organized and permanent market, on which in accordance with established rules Transactions on the purchase and sale of mass, highly homogeneous, interchangeable goods, products are performed. In the global market through the stock exchanges, more than 50 types of goods are being implemented, and the share of exchange trading is 15-20% of international trade. Depending on the objects of stock trading, commodity, commodity and stock, stock and currency exchanges are distinguished, and each of them can be specialized or universal. The scale of the exchange of the exchange is regional, national and international.
In Russia, the formation of prices on the stock exchange is carried out in accordance with the Law of the Russian Federation "On Commodity Exchange and Exchange Trade", according to which stock trading is carried out in the order of public bidding in guaranteed free pricing. The main factor determining the level of exchange prices is the market conditions, and stock exchange prices react very sensitively to its change. In stock trading use the following prices.
Fig. 1. Types of price stock trading
The price of the real product available in stock exchanges is two types depending on the terms of delivery:
"SPOT"- this is the price of cash product immediate delivery;
"Forward"- price for goods with delivery in the future, it is paid for a certain time when the goods are transferred to the buyer from the stock exchange. The price "Forward" takes into account not only the demand and supply, but also expenses for storage, insurance, interest for a loan, etc.
The purpose of transactions to the fictitious product (missing stock exchange) is the insurance of buyers from possible losses as a result of changes in market prices not in their favor.
Futures transactions - mutual transfer of rights and obligations for the supply of stock goods under the standard contract. Optional transactions are a continuation of futures transactions and suggest the right to buy and sell futures or cash contracts at a given price during the agreed period in the future.
Prices for which transactions are performed on the stock exchange are usually rigidly fixed and do not change during the term of the contract.
Based on information about the prices for transactions concluded on the stock exchange, is carried out exchange quotation prices produced by the quoted commission on the established technique.
Price quotes can be carried out in different ways:
Registration of actual prices of stock exchange transactions;
Determination of limit fluctuations in the price range (minimum and maximum) during the exchange day;
Determination of price fluctuations of the first and last transaction of the day. It is important to indicate the price of the last transaction, as it is believed that the ratio of supply and demand is most accurately reflected in it;
Designation of prices of the first and last transaction with an intermediate fracture in price dynamics during the day (lower or increase);
Combined combination with the prices of the beginning and end of stock trading;
Developing a typical reference price of the transaction (TCC), the value of which is determined by the average arithmetic method according to the formula:
where C 1, C 2... cn.- the price of actually concluded transaction, rub.;
To 1., To 2.... KN.- the number of units of goods (products) by transaction, units.
The prices of exchange quotes are reference and are a reference point for sellers and buyers. At the same time, the stock price quotation is the most important characteristic of the state of the market conditions of this product, as it records the ratio of supply and demand, the number of transactions and sold goods sold, the dynamics of goods during the day.
Prices of trades- These are the prices serving the specific trade form based on competition between buyers. The essence of trading is that the organizer (seller, contractor) announces a competition for issuing an order for the supply of goods (in a row to perform a certain type of work) according to the conditions announced in a special document (tender). A distinctive feature of trading is the presence of several buyers, contractors (supplements) and one seller (customer). Competitors provide the organizer their proposals from which he chooses the option favorable. As a rule, upon receipt of the tender, it is stipulated not only the level of price, but also performing certain conditions. The tender trading system in Russian practice was used in the privatization process, when declaring the competition for the development of mineral deposits, during the construction of large facilities, but in general, poorly developed. IN international Trade Bidding is carried out at a technically complex and capital-intensive engineering products, construction workAnd currently cover 1/3 of all export prices for machines and equipment.
Bidding are open (public), in which everyone can participate, and closed, affordable limited number of offers.
In the process of trading distinguish prices:
prices Offers- These are the prices of the supplements, they are not uriticed, and the Commission only chooses the most optimal level. The price of a suggestion depends on the specifics of the goods, as well as from which country of the Proper is a developing or developed capitalist. Proposals of participants from developing countries lower than the prices of Western countries, which have higher levels of technical equipment and more opportunities for the monopoly collusion at prices;
transaction price through which the offer receives a contract.
The ratio between the pricing and the actual transaction depends on the type of trading and the level of competition. With public bidding, the degree of competition between participants is sufficiently high and actual price May be significantly lower than the price of the offer. In the closed auction, the level of prices of actual transactions and the proposals is characterized slightly. Form of trading is a promising direction trade activitiesAnd their scope is constantly expanding.
2. Analysis of stock prices
2.1 Approaches to Exchange Price Analysis
To analyze the exchange prices, we will use the Dow theory in which it is necessary to study six major postulates, with which most analysts are already familiar:
1. The price takes into account everything. According to the DOU theory, any factor that can affect the demand or proposal one way or another, will invariably find its reflection in the price. Regardless of the nature and causes of events, they are instantly taken into account by the market and are reflected on the price dynamics.
2. There are three types of trends on the market. The definition of the trend that gives dough is as follows: with an upward trend, each subsequent peak and each subsequent decline above the previous one. That is, an upward trend must have a curve form with consistently increasing peaks and downsion. Accordingly, with a descending trend, each subsequent peak and a decline will be lower than the previous one. Such a definition of the trend is still fundamental and serves as a starting point in the trend analysis. Also, DW allocated three categories of trends: primary, secondary and small. He attached the greatest value primary, or the main one. The main trend lasts for several years and can be both a "bullish" and "bear". The movements of the second order lasts from a few weeks to several months and can go in the opposite of the main trend direction. Third-order movements are fluctuations with a period of several days.
3. The main trend has three phases. A market trend includes three phases. The first phase, or accumulation phase (accumulation), when the most far-sighted and informed market participants begin to buy first. The second phase occurs when investors using technical methods for trends are joined to price increases. Prices are rapidly increasing, and the perception of this market is becoming increasingly optimistic. Then the trend is included in its third, or the final phase, when the general public comes into action, and the market begins in the market, heated by the media. It is in this stage that informed investors who bought during the first phase when no one wanted to buy, begin to "distribute" (Distribute), that is, to sell when everything, on the contrary, try to buy.
4. Indexes must confirm each other. In the original, DW meant industrial and railway indexes. In his opinion, any important signal to increase or decrease the course on the market should be held in the values \u200b\u200bof both indices. In other words, the beginning of an upward trend can only be said if the values \u200b\u200bof both indexes blocked their previous intermediate peaks. If this happens only with one index, it means that we talk about the trend towards an increase in the market early. If indices show different dynamics, it means that the previous trend is still valid. Currently, this principle of theory of the DOU is expressed in the need to confirm the signs of a change in the trend with additional signals.
5. Trade volume must confirm the nature of the trend. The volume of trade, according to DOU, is an extremely important factor to confirm the signals obtained on price charts. If the main trend goes up, the volume increases in accordance with the increase in prices. And on the contrary, the volume decreases when prices fall. If the main trend is reduced, then everything happens exactly the opposite. In this case, the decline in prices is accompanied by an increase in volume, and with intermediate revitalization prices, the volume decreases. However, it is necessary to once again note that the volume is only a secondary indicator. Signals for buying and selling, on the theory of DOU, are based exclusively at closing prices. Volume indicators pursue one main goal - to determine in which direction the volume increases. And then this information is compared with the price dynamics.
6. The trend is valid until it serves explicit signals that it has changed. This provision is essentially undergoing all analytical methods for the trend. It means that the trend that has begun movement will strive to continue it. Of course, to determine the signals of the trend fracture is not so easy. But the analysis of the levels of support and resistance, price models, trend lines, moving averages - all this, among other technical instruments, will help you understand that in the dynamics of the existing trend there was a fracture. And with the help of oscillators, the signals that the trend loses force, can be obtained even earlier. The likelihood that the existing trend will continue, usually higher than the likelihood that it will change. Following this simple principle, you are more likely to be right than wrong.
2.2 Fundamental analysis and technical analysis
Technical analysis considers the likelihood that in this situation a certain result will be achieved - and in some cases this probability is very high.
The first known case of recording the dynamics of prices with its subsequent analysis is attributed to the inventor of the method of "Japanese candles" Munekhis Homma (end of the 18th century). But the foundations of the classical technical analysis, its principles were first set out in the works of Charles Dow in the late 1890s. These works were published in newspaper articles only in 1900-1902. Dow worked on the New York Stock Exchange and used its methods for analyzing the American stock market. It was he who subsequently organized the Dow-Jones information service and the Wall Street Journal newspaper.
The subject of research of technical analysis is to change the dynamics of stock prices in the past to determine which it will be in the future, while the fundamental analysis studies economic forces of supply and demand which cause price fluctuations and make them go up and down, or remain at the existing level.
In the fundamental approach, all factors that affect the price of the goods are taken into account to determine the inner or valid cost (in the stock market, the goods are securities). The fundamental analysis claims that it is this actual value and reflects how much a particular product should actually cost. And if the actual cost below the market price of the goods, it means that the goods need to be sold, as they give more than it really is. If the actual cost above the market price of the goods, then you need to buy, for it is cheaper than it really is. This proceeds solely from the laws of supply and demand.
Both of these approaches to forecasting the dynamics of the market are trying to resolve the same problem, namely:
Determine in which direction prices will move. But this problem is suitable from different ends . If the fundamental analyst is trying to figure out the market of the market, the technical analyst is only interested in the fact of this movement. . All he needs to know is that such a movement or changing market dynamics occurred, and what caused it - not so important. But the fundamental analyst will try to figure out why it happened. And many specialists working with stock goods (securities, various futures, currencies, etc.) traditionally belong to themselves either to technical or fundamental analysts. In fact, the border is very blurred here. Many fundamental analysts have at least the initial skills analysis skills. And even there is a humorous statement that if you have ever been brought to the graph of stock price, then you have already made it graphic (technical) analysis. At the same time, perhaps, there is no such technical analytics, which at least in general terms did not imagine the basic provisions of the fundamental analysis. (Although still among the latter there are "fighters for faith," they are called "purists" in the USA, they seek at any cost to prevent "fundamental infection" into their technical and analytical sanctuisa).
At that moment, when the market, it seemed, he took into account all the well-known economic parameters, the new process begins and, at the beginning, it is almost imperceptibly, and then - on increasing, prices begin to respond to some very new, not yet known factors. The most significant periods of growth and falling prices in history began in the situation, when nothing or almost nothing, from the point of view of fundamental indicators, did not foretell any changes. When these changes became understandable to fundamental analysts, the new trend has already developed in full force.
The founders of the Western theory of fundamental analysis are considered to be Benjamin Graham (David Dodd) and David Dodd (David Dodd), which in 1934 in the United States published the book "Analysis of Securities". The concept of "fundamental analysis" was first introduced in this book, as well as a definition as a tool for the prediction of future stock exchange prices.
Later, in scientific publications it was given a definition of a fundamental analysis as a process of researching the state of the economy, the industry and the financial situation of a separate company in order to clarify the market value of its shares. Assessment of many external and internal factors that significantly affect the financial and economic activities of the company, the results of which are reflected in the market value of its securities, and is a fundamental analysis. Such factors include the activities of competitors, and the political situation in the country, and the effectiveness of management, and strict compliance with the rights of shareholders of the Company, and the financial position of the company, as well as many other factors.
The main objective of the fundamental analysis is to determine the current market value of the security for the adoption of relevant investment decisions. Here is what William F. Sharp says, Gordon J. Alexander and Jeffrey V. Bailey in his book "Investments": "The fundamental analysis comes from the fact that the" true "(or internal) cost of any financial asset is equal to the present value of all cash flows that the owner of the asset expects to receive in the future. " In other words, we are talking about assessing the value of the issuer's share of the issuer on the basis of the analysis of the company's ability to profit.
At the heart of the fundamental approach to the analysis of shares lies the postulate that the shares of successful companies grow in price, while the value of the shares of unprofitable enterprises falls. The shareholder is a co-owner of the business, therefore, the more profitable business becomes, the more expensive the share in this business (shares) should be. And, on the contrary, if the company continuously carries losses and grows its debt to creditors, the cost of such a company will decrease.
The objectives of the fundamental analysis is to determine the degree of underestimation or rewardness of the share of the issuer on the basis of the analysis of cash flow generated by the Company. The result of such an analysis will be the decision-making of the securities portfolio.
Full fundamental analysis should be built on a three-level basis:
1. Analysis of macroeconomic factors:
State of the national economy;
Economic policy of the state;
Political situation;
Legal regulation;
The conjuncture of world commodity and financial markets.
2. Analysis of sectoral factors:
Competition within the industry;
Current cyclicity;
Stage of the life cycle and the state of the industry.
3. Analysis of microeconomic factors:
Company management;
Business building model;
Market product niche;
Technical status used;
Scientific and innovative potential;
Financial condition;
Investment projects;
Dividend policy;
Structure of joint-stock ownership;
Corporate governance quality;
Transactions with company shares.
For the use of a fundamental analysis of shares by a portfolio investor, it is necessary to have a mature efficient securities market, which is expressed in the presence of liquidity, sufficient capitalization, developed infrastructure, etc.
In recent years, with the development of computer technologies, many sections of technical analysis seemingly firmly forgotten, gained a new life due to a sharp relief of their calculation, as well as free automatic testing of their effectiveness at large historical intervals.
3. Causes of price fluctuations on the stock exchange in the Russian Federation
3.1 Pricing for certain types of securities
State securities. According to state securities, the price level depends:
1) from the type of securities;
2) making conditions or regulations on their release;
3) existing economic and political conditions.
Corporate bonds. Establishment of the price of supply for corporate bonds is rather difficult, as it is impossible to find an option for comparison with a similar rating and maturity. Typically used conversion equivalent (K). This is the price of which shares should be sold in order to be absolutely equivalent to bonds.
3.2 Prices on the Stock Exchange and the reasons for their oscillations
First of all, it should be noted that the stock exchange does not "make" prices. She only states them, objectively contributes to their formation. Exchange courses are market prices that arise and changed under the influence of the evolution of supply and demand. The stock exchanges the process of supply and demand, and the result of their comparison and is the price as an expression of equilibrium, temporary and relative, but sufficient to implement a particular transaction. Thus, courses serve as a generalized indicator of the securities market situation. The definitions involve various factors affecting demand and proposal for specific securities.
In a large extent, the amount of courses depend on how buyers and sellers are evaluated. The positions of the participants in the exchange transactions are largely dependent on information on issuers' enterprises, their prospects, on the situation in the economy and a lot. The degree of completeness of information, its update, accessibility for the general public has a great influence on the evolution of courses.
When evaluating factors affecting stock exchange rates, two approaches are possible. At one emphasis, the scientific analysis of objective mechanisms is done, under the influence of prices. Another approach focuses on subjective factors rather.
The first approach is well described by S.V. Pavlov. It emphasizes that the value of the paper for the investor is, first of all, in the fact that it brings him a certain income. The overall income is compared with the risk that carries the security holder. This ratio is used to compare with the profitability and riskiness of the premises of the same amount of money to the bank, the possibilities of acquiring other goods for this amount. The right to manage the company, which acquires an investor together with purchased shares, and the possibility of obtaining additional profits from the establishment of control over the enterprise. It is important to account for the degree of propagation of acts of purchase and sale of these types of securities, which allows the owner if you wish to rescue money for them.
Thus, a combination of factors affecting stock exchange courses is distinguished:
1) profitability, current and expected interest rate on bonds, the expected dividend sizes plus the possibility of increasing additional profits from control;
2) the magnitude of the loan percentage, which makes more or less attractive placement of money to the bank;
3) the degree of risk of investments, which is determined by the stability of the balance and prospects for the growth of the economy, the reliability of the financial system;
4) the availability of alternative fields of the application of funds - the conjuncture of commodity and other markets;
5) liquidity, that is, the scale of the dissemination of joint-stock enterprises, the degree of use of securities to attract funds.
The most important two indicators: profitability and loan percentage. The higher the yield, the more high there should be a stock exchange rate of this paper. Communication with the size of the loan interest has inversely proportional character - than it is higher, the greater the interest of the savings in the premises of its funds to the bank. And this reduces the demand at the stock market of securities and thereby contributes to a decrease in their course.
An example is the approach of the world-famous scientist D.M. Keynes. In the work of the "Monetary Game", he acts as a stock exchange player, which was a long time. The main mistake of a scientific approach to this problem, according to Keynes, is that investors are attributed to rational behavior, and the purpose of their operations is considered to be only maximizing financial income. The majority of investors, he believes, relies on anything, except for the analysis - from intuition to the sound of the company name. Therefore, Keynes recommended investors to pay more attention to psychological factors and "internal feelings".
The history of the Exchange business is also talking about the huge importance of using other information (remember Nathan Rothschild), and modern practice. No wonder this sphere is the object of regulation by the state. Thus, in the United States, an act of trade in securities of 1934 has banned manipulation in order to change the opinion of the market by providing false information. All director of companies whose shares are registered on official exchanges are required to provide information on all operations with securities of their companies in the Securities and Exchange Commission. To limit the use of information inaccessible to small investors, in many countries, trade on the basis of such information is officially prohibited. And the revealed violations become publicity and are widely discussed on the print pages. So it was in the late 80s in the USA, when the Securities and Exchange Commission appeared several times with Court's claims, which, knowing the prepared mergers and acquisitions, were carried out through submersible firms transactions with shares of companies participating in the data operations.
Regulatory acts and laws on stock exchanges, as a rule, do not record the procedure for determining the exchange rate of securities. In a number of Exchange Charters, it is only indicated that the exchange price should be considered such a price that corresponds to the actual position of the trade turnover. Exchanges are usually published for the attention of their customers course newsletters, in which courses of specific securities allowed for operations on this exchange. But how do they arise?
Answering the question, stockbags usually say that the process of forming courses is very simple, as it is based on a comparison of applications for sales and purchases and excretions with elementary arithmetic operations of their magnitude. In fact, the procedure is not so simple. Consider this by specific example. Suppose that we are known for all applications for the sale and purchase of any securities. Then we could make a consolidated table, which gives a general idea of \u200b\u200bthe market structure.
After the comparisons and definitions of the Exchange Course, trade continues. New applications come to the brokers. The process of their comparison occurs again, and new quotes appear.
Permanent fluctuations in securities courses express the normal development of the market situation. But at the same time, the conditions under which there are sharp changes in prices, many investors become their victims. In order to avoid such "collaps" prices, special measures have been developed on stock exchanges. Thus, by decision of the Syndical Chamber of the Paris Stock Exchange, the limits of courses fluctuations are established. For example, the difference between the last course of the previous meeting and the first course of the current should not exceed 4-5% or 8-10% on various transactions. Other measures are provided for the normalization of the situation (restriction of transactions for a particular papers, the complete cessation of trade with them with the publication in the official bulletin of the market exchange of the market and other).
3.3 Practical analysis of the relationship between stock exchanges: MICEX and RTS
exchange Price Trend Investment
The development of Russian financial markets is gradually entering the sphere of normal economic Analysis. The accumulating statistical framework allows you to set a number of questions regarding the patterns of the development and operation of Russian financial markets.
Russian stock exchanges, trade volumes and stock prices already give a certain material to begin searching for sustainable patterns. Although the period of the existence of organized trade in shares in Russia is small, the combined use of monthly, daily and watch observations allows you to put a number of tasks. Naturally, the issue of communication between activity on two exchanges, both in relation to indices and trade volumes, their connection with international indices, and important factors that traditionally affect stock activity, for example, the dynamics of economic activity in Russia, prices and Other. One of the reasons for interest in the dynamics of indexes of stock prices is the slow growth of indices, despite a rather long economic lift (Fig. 1).
Fig. 1. Dynamics of industrial production indices and stock indexes.
The specifics of Russian reality is the parallel existence of several stock exchanges with a different history, the nature of the organization:
· RTS - RTS Stock Exchange (the former name "RTS trading system"),
· MICEX - Moscow International Currency Exchange,
· MFB - Moscow Stock Exchange.
Moscow Interbankovskaya currency exchange MOSCOW INTERBANK CURRENCY Exchange - MICEX) is the leading Russian stock exchange, on the basis of which a nationwide bidding system has been created on all major segments of the financial market - currency, stock and urgency - both in Moscow and the largest financial and industrial centers of Russia. Together with its partners (MICEX's settlement chamber, the National Depository Center, etc.) of the Exchange also carries out the calculation and depository service of about 600 organizations - participants in the exchange market. The subject of the activities of the MICEX is the organization of trade, settlement and clearing and depository services to the participants of the currency, stock, urgent and other segments of the financial market.
Starting trade in the protesters russian companies Only in March 1997, the MICEX to today has achieved significant success. Until August 17, 1998 She held the 3rd place in terms of public securities trafficking. According to March 1998, 177 banks and financial companies took part in the MICEX trading.
In the conditions of the "Currency Corridor" in 1996, the turnover of foreign exchange trades was significantly reduced, but the stock exchange rate remained an important indicator of the market. The Bank of Russia canceled the mechanism of direct binding of the official ruble rate to the MICEX and introduced the mechanism for establishing the official exchange rate of the Central Bank of the Russian Federation based on the quotations of exchange and over-the-counter markets. MICEX has implemented a currency trading system using remote Reuters Diling Terminals, as well as the development of a project for creating a system of electronic ledge (SELT) for currency. The trading system began to carry out Operations "Repo" and Lombard lending. The number of GCO dealers has increased to 300 organizations, including 120 regional dealers. MICEX began trading on corporate bonds (RAO VSM), preparing for trading with shares of leading Russian enterprises.
In 1997, MICEX managed to lay the foundation for the formation of a nationwide trading system in securities on the basis of its trading and depository complex. According to the results of transactions with MICEX shares, the consolidated stock index began to calculate, which accurately reflected a sharp drop in the securities market in Russia, caused by the international stock crisis.
In the first half of 1998, the MICEX continued to develop all the sectors of the exchange financial market, making an emphasis on improving the mechanism of trading and settlement on securities and urgent tools. Within the framework of the MICEMB Securities Trade and Depository System Program and regional stock exchanges signed a new edition of contracts, in accordance with which regional currency and currency stock exchanges continued to perform the functions of MICEX representatives in the securities market and technical centers of regional professional market participants to Trading system MICEX.
The installation of new remote jobs operating in the MICEX trading system on low-speed communication channels has begun. The MICEX transferred the functions of the depositary service of the state, subfederal and corporate securities market to the National Depository Center (NDC) established by the Exchange and Bank of Russia. Rightened the market of corporate actions and subfederal bonds (the total number of issuers and subjects of the Russian Federation is about 100, including Moscow bonds).
Financial collapse of 1998 detained the exchange of the Russian Exchange and the world of many shares of the second echelon companies. A number of companies, especially oil and with foreign capitalCould expand their presence on stock exchanges and raise their capitalization. Still Russian shares in the world are associated with Gazprom, RAO UES, YUKOS, LUKOIL and Rostelecom. Although the structure of the indexes of the stock exchange, usually dozens of leading shares are usually observed, there is a huge concentration of trade with only a few papers of key issuers. On RTS is RAO UES, LUKOIL, Rostelecom, Norilsk Nickel and YUKOS; On MICEX - these are the same participants plus bonds; On the IFAC is Gazprom by the advantage. The history of stock indexes is still very short. RTS leads its history since mid-1995, MICEX began to trade in securities only at the end of 1997. Taking into account the collapse and devaluation of August 1998, the actual object of quantitative analysis may be the period since 1999.
The main support of the analysis is made to the more well-known and active stocks: RTS and MICEX. One of the first and natural tasks is the need to determine the degree of their connection - in fact the equivalent of the issue of the unity of the process of formation of market assessments of companies. Consider the degree of connectivity of the dynamics of the trade in the same names on two stock exchanges in order to ensure that the market is one both in relation to pricing and trade volumes. Both exchanges demonstrate active work and expansion of the circle of shares and tools. At the same time, in 2001, there is a sharp increase in turnover on the MICEX, reflecting both general stock trading trends and the specific institutional features of the two exchanges (see Fig. 2). The volume of trading on the RTS has declined somewhat in 2000-2001 - from $ 509.7 million to $ 307.1 million per month, and on the MICEX they rose from $ 817.8 million to 3636.0 million. dollars per month (recalculated in dollars at the average monthly rate).
From November 1, 2006, the MICEX Stock Exchange begins the daily calculation of additional analytical indicators for securities included in MICEX stock indices. The composition of the new information product includes: the vatility of securities, the coefficients of alpha and beta, the proportion of securities and the influence of a separate securities on stock indices.
The need to introduce a new information product is due to the growing need for an operational analysis of the securities market and, first of all, analyzing the nature of the behavior of the most liquid securities included in the calculation of MICEX stock indices.
Features of the development of the modern Russian stock market, in particular an increase in the amount of securities in the market, as well as a gradual increase in liquidity, allow you to use a wider range of investment strategies - from the formation of an effective securities portfolio to intraday trade in a separate securities. The proposed MICEX Stock Exchange Analytical Indicators are quantitative characteristics stock market and are designed to ensure support for investment decisions.
Currently, the MICEX stock exchanges are calculated stock indices, reflecting the state of various segments of the Russian securities market. The MICEX index is calculated from September 22, 1997 and is a classical market-weighted market capitalization index of the market of the most liquid shares of Russian issuers admitted to the MICEX Stock Exchange. To date, the MICEX index is used as a basic index for 11 index mutual investment funds. The RCBI index is calculated from January 1, 2003 and is a bonded index, which has been suspended by market capitalization, reflecting the price situation on russian market corporate borrowing.
Differences in trading volumes on stock exchanges are complex related to the differences in the clientele and the nature of operations. It is believed that at RTS, where trade is conducted in dollars, operate, mainly investment banks working with the packages of shares of Russian enterprises. At the same time, Russian capital and Russian stock players dominate the MICEX. It is possible, so there are two different indexes on the MICEX: a standard SFI and MICEX 10, designed for day traders, and allowing to track the slightest fluctuations in the prices of basic financial instruments.
Fig. 2. Dynamics of revolutions on the MICEX and RTS
The purpose of the analysis is to show why the capitalization of Russian companies did not grow in recent years with increasing the main macroeconomic indicators. Another task is to find communication of existing indices and prices for shares of individual companies from some (primary) set of factors, including the impact of the dynamics of shares in foreign exchanges.
Trade in leading shares of Russian companies.
In fact, index analysis will be determined by the dominance of a limited number of shares in stock indices. Since trading on the IFAC is predominantly shares of Gazprom, and the rest in more than The RTS and MICEX platforms occupy, the differences in trading volumes and the SFI and RTS indices are determined, first of all, the trading structure, that is, with shares dominating each of the stock exchanges.
Table 1 "Characteristics of the dynamics of trading volumes with shares of leading companies (million rubles), (monthly data for the period 2000-2006)"
So, the oscillation of trading on the MICEX is 99% is determined by fluctuations in trading volumes of LUKOIL shares, RAO UES, Surgutneftegaz and Rostelecom. On RTS, LUKOIL, RAO UES, Norilsk Nickel and Rostelecom, whose total contribution is 97% of fluctuations in the volume of trading volumes of the system. If we consider that Gazprom shares are mainly listed on the IFAC, it turns out that only four companies in Russia dominate the market. It can be noted (Fig. 3) a higher concentration of three leading shares in the volume of trading on the MICEX than at the RTS. On the MICEX high, the concentration of trade in shares of RAO UES - 62.5% versus 24.8% on the RTS.
Fig. 3. Structure of trade in stocks on stock exchanges.
A fundamentally important feature of the Russian stock exchanges is that the leading traded (liquid) shares represent the sector natural monopolies, above all, energy. It is not surprising that two huge energy companies that were not fragmented in the 90s, have a greater weight on the stock exchanges. At the same time, they are tremendously undervalued, including compared with the sum of individual energy companies in the event, for example, restructuring RAO UES (subject to good neoplasia management). In a country with such huge raw materials exports, as in Russia, it would naturally be to expect the dominance of export companies in the industries of metallurgy, oil, fertilizer, etc. However, so far only LUKOIL and YUKOS are held in the first number of companies on capitalization and activity of trading. A number of food industry companies look promisingly, but so far they have little affect the total volume of activity on the stock exchanges. An important feature and disadvantage of natural monopolies is their dependence on administered prices. This puts them indirectly to the dependence on public Policy in the field of accumulation, control inflation, as shown by the debate and decisions of the Government of the Russian Federation in January 2002 to limit the increase in the tariffs of Gazprom and RAO UES in this year Within 20%, that is, close to the expected inflation.
In this regard, the growth in capitalization of Russian companies (respectively, the stock exchange) will depend on the provision of the above key players, as well as the replenishment speed of the series of "blue chips", expanding the coverage of the active trade of export and processing companies. The quality of management, transparency of accounting and finance (taking into account the new "Arthur Andersen Syndrome"), and improving the quality of corporate governance in general will be the conditions for the growth of capitalization. However, it is necessary to emphasize again that in the short term the situation on stock exchanges seriously depends on 4-5 companies.
The formation of the Russian private financial sector was interrupted by the crisis. Changed trends in the development of financial markets, especially banking sector, suffered the losses of non-bank financial institutions, especially in connection with the default of the GCO. Sharp devaluation, economic downturn and a series of banking bankruptcies created a new situation for development. Attempts to keep the ruble exchange rate was indirectly to the victim of the stock market and the GKO gradual rolling to the default, which can be seen in Table 5. The economic rise of 2000-2002 changed the situation in the country, created general prerequisites for revival and financial markets.
Table 5 "Indicators of the financial crisis 1997-1998."
|
Indicator |
RTS index |
Weighted average yield of GKO |
Exchange rate |
||||
|
(rub. / Dol.) |
|||||||
|
The change |
|||||||
|
The change |
|||||||
|
The change |
|||||||
|
The change |
Restoring the level of indexes on Russian stock exchanges was slowly, despite the significant (and for many unexpected) GDP and industrial production. To a certain extent, it can be said that the stock market more accurately reflected the course of reforms, strengthening property rights and increasing profitability of production. Thus, the post-crisis reduction of gross indicators of economic activity has not yet radically change the state of the Russian Exchange and ensure the influx of capital. The growth of macroeconomic indicators, of course, is only part of the factors that have been making investors who decisive aggregation. We can talk about a significant strengthening of the level of the exchange rate on the RTS in 2002 and 2005 with a growth forecast to 400 points by the end of 2005 at a moderate rate of economic growth in the Russian Federation (about 4% of GDP). In fact, the rank of 400 was passed in May. The overall sustainability situation contributes to an increase in shares. In addition, a large volume of absorption of enterprises, although it happens "behind the scenes", affects the stock exchange.
Data on the structure of auction show that most Russian monthly indices, according to which it is possible to have statistics for 5 years, have practically close variation coefficients (about 0.5). The scatter of time data of the MICEX index was higher than on the RTS, which, apparently, reflected a higher trend component on the first. So, for the period 2005 to 2006, the RTS index rose from 98 to 202 points (by 48.5%), and the MICEX index (SFI) from 95 to 184 points (by 51.6%).
Analysis of the graphical representation of monthly data allowed us to allocate as a relatively homogeneous period from the beginning of 2000. This choice is confirmed by Test Chow (Chow Breakpoint Test). For a number of variables, there is a gap point 2005. Next analysis of all data was carried out for the homogeneity period. Thus, in almost the entire period of economic growth (Fig. 4) was involved in the analysis of the activity of the Russian Exchange (Fig. 4).
For analysis, monthly data on stock indexes were used: the SFI and RTS indices in the currency value, the AK & M index as well as data on trading volumes on MICEX and RTS, MM.RU. In addition, a number of macroeconomic indicators were considered: the average export price of crude oil, dollars / ton (oil); Middle Wholesale prices for oil, thousand rubles / tonne (oil); gas, thousand rubles / mі (gas); Electricity, thousand rubles / thousand kvt.ch. (ENERGY); Natural gas production, billion mi, seasonally smoothed at the annual level (mining_gaz); Oil production, million tons, seasonally smoothed at the annual level (mining_neft); Exchange rate, rub / dollars. (COURSE); volume of industrial production, million rubles. in prices 12.92 (PP); index consumer prices (CPI), the SP 500 index (SP 500), the index of developing MSCI markets (IRR).
All three stock indexes (including ACM) showed a lag dependence on the IRR index, which indicates a gradual rapprochement in the period under review of the dynamics of stock exchanges of countries with emerging markets.
Conclusion
The modern stage of development of economic relations has shown that the stock exchanges and the trade mechanism are firmly established as one of the most important mechanisms for trade operations. In fact, any Exchange is only a logical development and streamlining of another auxiliary trading structure - the market. The main problem that stood on the way to increase market commercial revolutions was successful overcome on the stock exchange. This problem was the presence of the goods sold. The trading mechanism of the exchange is built in such a way that for the very fact of concluding the transaction is not necessarily the availability of goods in close proximity to the buyer and the seller. The abstractness of trade relations is developing so much that in practice (and on some exchanges often only happens) it happens that the product that the transaction is lies, does not have the seller or this product does not exist in nature at all. This key idea of \u200b\u200bthe lack of goods sold has allowed to increase trade turnover of the exchange to stunning dimensions comparable to gross internal products of developed capitalist countries.
It should also be noted that the stock price has a very strong impact of both the political situation in the country and other factors.
Posted on Allbest.ru.
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To analyze the exchange prices, we will use the Dow theory in which it is necessary to study six major postulates, with which most analysts are already familiar:
- 1. The price takes into account everything. According to the DOU theory, any factor that can affect the demand or proposal one way or another, will invariably find its reflection in the price. Regardless of the nature and causes of events, they are instantly taken into account by the market and are reflected on the price dynamics.
- 2. There are three types of trends on the market. The definition of the trend that gives dough is as follows: with an upward trend, each subsequent peak and each subsequent decline above the previous one. That is, an upward trend must have a curve form with consistently increasing peaks and downsion. Accordingly, with a descending trend, each subsequent peak and a decline will be lower than the previous one. Such a definition of the trend is still fundamental and serves as a starting point in the trend analysis. Also, DW allocated three categories of trends: primary, secondary and small. He attached the greatest value primary, or the main one. The main trend lasts for several years and can be both a "bullish" and "bear". The movements of the second order lasts from a few weeks to several months and can go in the opposite of the main trend direction. Third-order movements are fluctuations with a period of several days.
- 3. The main trend has three phases. A market trend includes three phases. The first phase, or accumulation phase (accumulation), when the most far-sighted and informed market participants begin to buy first. The second phase occurs when investors using technical methods for trends are joined to price increases. Prices are rapidly increasing, and the perception of this market is becoming increasingly optimistic. Then the trend is included in its third, or the final phase, when the general public comes into action, and the market begins in the market, heated by the media. It is in this stage that informed investors who bought during the first phase when no one wanted to buy, begin to "distribute" (Distribute), that is, to sell when everything, on the contrary, try to buy.
- 4. Indexes must confirm each other. In the original, DW meant industrial and railway indexes. In his opinion, any important signal to increase or decrease the course on the market should be held in the values \u200b\u200bof both indices. In other words, the beginning of an upward trend can only be said if the values \u200b\u200bof both indexes blocked their previous intermediate peaks. If this happens only with one index, it means that we talk about the trend towards an increase in the market early. If indices show different dynamics, it means that the previous trend is still valid. Currently, this principle of theory of the DOU is expressed in the need to confirm the signs of a change in the trend with additional signals.
- 5. Trade volume must confirm the nature of the trend. The volume of trade, according to DOU, is an extremely important factor to confirm the signals obtained on price charts. If the main trend goes up, the volume increases in accordance with the increase in prices. And on the contrary, the volume decreases when prices fall. If the main trend is reduced, then everything happens exactly the opposite. In this case, the decline in prices is accompanied by an increase in volume, and with intermediate revitalization prices, the volume decreases. However, it is necessary to once again note that the volume is only a secondary indicator. Signals for buying and selling, on the theory of DOU, are based exclusively at closing prices. Volume indicators pursue one main goal - to determine in which direction the volume increases. And then this information is compared with the price dynamics.
- 6. The trend is valid until it serves explicit signals that it has changed. This provision is essentially undergoing all analytical methods for the trend. It means that the trend that has begun movement will strive to continue it. Of course, to determine the signals of the trend fracture is not so easy. But the analysis of the levels of support and resistance, price models, trend lines, moving averages - all this, among other technical instruments, will help you understand that in the dynamics of the existing trend there was a fracture. And with the help of oscillators, the signals that the trend loses force, can be obtained even earlier. The likelihood that the existing trend will continue, usually higher than the likelihood that it will change. Following this simple principle, you are more likely to be right than wrong.
Technical analysis is an analysis of price changes by schedules in order to determine the direction of price movement in the future. It is based on 3 sources of information: prices, trading volumes and time. In contrast to the fundamental analysis, there is no information about the causes of price behavior in Tehanalysis. It already takes into account the price movement in one direction or another and on the basis of certain identified patterns in the past makes it possible to identify the onset of certain events with more likelihood, namely growth or fall in prices in the future. She has both many supporters who earn in the market and many opponents claiming that this is a lzhenauca, invented by a lazy man, who does not want to carry out a detailed study and analysis of financial assets.
History of origin
Technical analysis originated in Japan in the 16th century. It is considered to be the attitude of Munekhis Homa, a representative of the oldest Japanese dynasty of merchants. Then in Japan the main product traded on the stock exchange was rice. Munekhisa so carefully approached the issue of trade, which examined the entire dynamics of price changes over the past hundred years. As a result, they derived certain patterns of price behavior in various conditions. Based on its research, a trade system was derived, which brought him fabulous profits and helped him to become the most rich man in Japan in the shortest possible time. Assessing his merit, the emperor assigned him a samurai title and appointed him with his personal financial advisor.
The wide distribution of its method of trade and market analysis received after the publication of the book in the 1760s, which began the beginning of the Japanese candle, which is successfully applied not only in Japan, but in the world. In Europe, Japanese candles found out only at the end of the 19th century.
The twin priority of the classical technical analysis in the West is considered to be Charles Dow, one of the founder of popular, while the head of the Wall Street Journal of Wall Street Journal. In 1890, the magazine published a cycle of articles on the possible prediction of price behavior on the basis of certain patterns. The principles were described, on the basis of which it was possible to enter into a transaction for sale or a purchase with reduced risk.
It is noteworthy that the theory of Dow received wide fame only after his death.
The beginning of the heyday of the technical analysis is considered to be the end of the 70s of the last century, with the advent of computer technology, when the analysis of the graphs and their construction has simplified.
If earlier the players using that had manually on a piece of paper to draw graphs and carry out calculations, then the use of computer equipment features maximally simplified this work. It is this simplicity of analysis and gave an impetus to mass development. As a result, almost any trader, studying the foundations, literally in a few days, could be considered a specialist for those. Analysis and put forward its hypotheses about the future price behavior in the future.
Laws or postulates of technical analysis
The basis of technical analysis laid 3 main rules:
1. The market takes into account all
The principle is based on that all events (economic, political, psychological) are already taken into account in price. No matter what reasons is growth, the main thing is that these reasons pushing the price up and then you need to take the side of the majority, and not to go against the market.
2. The story is repeated
Based on ordinary psychology and mass behavior of people in certain situations. Knowing how people reacted in the past in the occurrence of a market model, you can most likely assume that in the future they will behave in the same way.
3. Price movement is subject to trends.
When there is a direction for the movement of prices in one direction, it is logical to go with it. When the demand exceeds the proposal is a rising trend (uptrending trend), otherwise there is a downward trend (downward trend). Based on this, the postulate flows two consequences:
- Trend, at each of its point, is more likely to continue than will change its direction to the opposite.
- Trends are not infinite and sooner or later end
Therefore, one of the main tasks is the definition of the beginning of the origin and ending the trend.
What studies technical analysis
At the heart of those. Analysis lies several sections or tools, the study of which makes it possible to make an assumption about the further price behavior.
- Types of graphs or method of displaying them. The most widely distribution received 3 types: linear, bars and Japanese candles
- Basic concepts, without which the study of technical analysis does not make sense. This is the concept of trend, Flat, support lines and resistance, channels, levels.
- Patterns or models are typical combinations that are formed on the price schedule. There are models for continuing the trend and a reversal trend model.
- Japanese candles - on the basis of a set of several candles, sometimes even just one formed certain assumptions about the further development of events.
- Technical indicators and oscillators. They are formed both derivatives from the price, time and volume of trading (both in the aggregate and separately) and are displayed in the form of graphs, which are either superimposed on the price schedule, or are used separately as additional information.
- Trading strategies using the above tools to determine favorable situations for entering the transaction and exit from it to increase profits.
- Risk management system. And although this item is not included in the study of technical analysis, it is the most important. Properly selected capital management is able to withdraw almost any trading system into profit and on the contrary, incomprehension of risk management kills even the most effective trading strategy.
Example Ta on the stock exchange
Over the past years, Gazprom shares are traded in the canal. Upper border 148-150 rubles, lower 125-130 rubles, which act as strong levels of support and resistance. Of course, sometimes prices tried to break through the canal, but returned back.
Buying prices from the bottom plank and selling the trader could safely earn on these predictable movements. The width of the channel is to take even a minimum of 18-20 rubles. It is about 12-14%. Per last year It was possible to take about 5-6 such transactions that would bring profits in the amount of 60-80% yield.
Why is that so popular among traders?
This is facilitated by a number of reasons:
- Fast learning. Unlike the fundamental analysis, to study which you need to spend a lot of time, the development of only a few days. The foundations can generally master in a few hours.
- Fast result. Transactions performed on the basis of fundamental indicators are usually very long. Position can be held for several months, years and sometimes even decades. Using only the technical aspects of the analysis can be achieved visible results literally in a few days or even hours. There are even special trading strategies Calculated for the commission of a variety of transactions during one day.
- No need to thoroughly study the traded tool. Just in just a few minutes to analyze almost any graphic, to make the assumption of the further price movement.
- It is applicable and works absolutely on any timeframes: monthly, day, hour and even minute (by the way to say the less timeframe, the more on it of various "market noise", therefore the effectiveness of analysis in small periods is reduced).
- Mass use of automated trade algorithms or by simple trading robots, which in most cases traded precisely using knowledge from technical analysis.
- Massified information is almost everywhere about the possibility of replaying the market many times using technical analysis methods. And they advise the transactions as often as possible. What to say to it? As they say: "Search for someone profitable!". And profitable just brokers and shopping exchangeswho get their little a penny from each trader's deal. Therefore, the more transactions, the more profit. No strategies "bought and keep!" Only active trading. Here are newbies and are conducted, in the hope of rapid enrichment.
Why those. The analysis is running
The effectiveness of technical analysis is explained simply enough. A huge number of traders all over the world using technical analysis in their trafficking see the same graphs, models, figures using the same indicators and oscillators. And as soon as the signal appears, which Ta is interpreted as a purchase signal, most start to buy. As a result, the price begins to go up. If for those. Analysis needs to be sold, many begin to sell, which pushes the price on the bottom. And the stronger the signal, the more players enter the game.
There are several hundred (if no longer thousands) of various indicators, on the basis of which, one can derive the suggestive price movement on the basis of which. And what more people This or that indicator uses, the more effective it is. Therefore, over time, the number of traders is smeared on these indicators, which ultimately reduces the effectiveness of each.
Therefore, the most effective are the simplest (but strong) models and only a few basic indicators that most players in the market are considered. The explanation is also pretty simple. Most traders are studying only the foundations of those. Analysis, which they are enough for trade.
Technical analysis, akin to statistics and public opinion polls. Its main purpose to identify the mood of the crowd or the balance of the forces and take the side of the majority. When you get in purchase, with bearish - on sale. And as soon as the balance of power begins to change, go out of the transaction.
The maximum efficiency of trade is achieved when combining two methods of analysis: technical and fundamental. In the fundamental shares are chosen, which has a high potential for growth and at the moment for one reason or another are undervalued by the market. For technical, you need to look for the right point of entry into the transaction, using the maximum opportunity to buy these shares at an adequate price, at the time of the beginning of their growth.
