Winning at Spread betting isn’t down to some indefinable magic quality that some people posses. But rather there are a number of financial tools that can aid you in making better calls when it comes to your spread betting. This involves research and considerable work but should give you better indicators of when to buy and sell. The two typical types of analysis used to predict price movements are:
- Fundamental Analysis
- Technical Analysis
Fundamental Analysis unsurprisingly involves looking at what are considered some of the fundamental information about companies operational and financial performance. In order to get an indication of whether the price is over or under valued. These fundamentals include such things as the company’s cash flow profile, company operation, the debts and assets a company it holds on its balance sheet and management’s corporate strategy. One of the most popular tools of fundamental analysis is the Price to earnings ration oft stated as the (P/E) ratio. We will have a full post explaining some of the various approaches to fundamental analysis and the different indicators to look at.
Technical Analysis is the use of past statistical data including prices and trading volumes to judge what future movements of a stock or commodity will be. With Technical analysis it is unimportant what sector the company being analysed is in, but rather you are looking at charts and trade volumes to predict future trends and movements in whatever is being analysed. Some go as far as arguing that all which is needed to predict movements in tomorrows trading can be concluded from technical analysis of yesterdays movements. To this end there are numerous programs that allow you to monitor a stocks technical data. We will also have post explaining some of the things a technical analyst will look for.
Part of the Beginners Guide to Strategy and Analysis for Spread Betting