Traders try to help the fundamental calculation method so that the agents recognize the imbalance of prices in the value-for-profit transactions to the point of equilibrium (and consequently profit).
In this way, the trader anticipates the market by examining the events and news of the real world and based on his knowledge and strategy. In other words, the solution is to calculate the entry and exit points of the market. Simply put, fundamentalist analysts say that all price changes must have a fundamental economic cause.
Other fundamentalist analysts are looking for reasons and reasons for this, collecting data sets to calculate and examine the market.
Of course, the problem with fundamental fundraising methods is that companies’ foreign exchange markets, commodities, and stocks have completely different trading issues that cannot be fundamentally and, in a sense, fundamentally examined by fundamental factors. For example, precious metals, especially gold and jewelry, have a dual nature that is not easily verified or anticipated.
To better understand the case, let’s look at an example of how a fundamentalist analyst sees the position of the gold, jewelry, and iron markets.
One example ; Compare Fundamental Review for Jewelry Gold and Iron!
Suppose the value of a kilogram of gold jewelry today is about $ 40,000 and a kilogram of iron is less than a dollar. It is clear that the cost of carrying gold jewelry is much lower than the cost of carrying iron by plane rather than by ship (which is the cheapest means of transportation). For this reason, the cost of transportation for gold and jewelry can be covered and a lot of attention can be paid to iron.
In profit, if there is a difference in the value of gold and jewelry in two parts of the world, you can buy gas from where it is cheaper and sell it in a place that is more expensive.
The benefit is that the price of gold jewelry is relatively the same in all parts of the world (regardless of customs costs and restrictions in some countries). This article is only valid for the physical sale and purchase of jewelry jewelry; It is also worth noting in today’s global financial markets, which are accessible through the web and online trading platforms.
For example, if you look at the price difference offered for buying and selling and the value of transactions on the Dubai Stock Exchange and the Chicago Stock Exchange, which are the main gold and jewelry exchanges in the world three years ago, you will see that there is still a difference. More than one tick (10 cents) has not been seen for a second.
But the same is true of iron in general. The cost of transporting iron from the United States to Dubai, for example, is so high that it can never be profitable commercially.
Under the same pretext, the value of iron in the United States and its value in Dubai could be significantly different. Perhaps the value trend can also have multiple directions. That is, for example, due to the decline in the construction market and the value of real estate in the United States, the price of iron is falling; At the same time, the value of iron in Dubai is rising every day due to the boom in construction and the high sales of real estate in Dubai. This is a true example that was observed in 2008.
On the other hand, in the case of iron, the value is entirely regional. For example, the value of iron in Bandar Abbas and Abadan is practically the same as its value in Dubai and Kuwait (cities along the Gulf of Aden) with a difference of a fraction. Because the cost of transporting iron between these cities (by ship) does not double.
These two products, however, as mentioned, are times that are doubly different from each other and were presented more clearly to explain the article. In practice, other goods have the same position; But no, with such a significant difference.
Published and authored by FalconProfit.com
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