Day trading strategies: the complete guide with all the advanced tactics for stock and options trading strategies. Find here the tools you will need to invest in the forex market

What Is Fundamental Analysis?
Fundamental analysis of the commodity markets involves the study of the
interaction between supply and demand; with this analysis, traders attempt
to predict future price movement. Specifically, the entire concept of
fundamental analysis is built upon the following equations:
Demand > Supply = Higher prices
Supply > Demand = Low prices
Most analysts agree that commodity market supply and demand figures are
quantifiable, yet even the diehard fundamentalists will admit accurate
statistics are not available in real time. Thus, any numbers plugged into the
simple and neat formulas given are relatively meaningless. If you input
garbage data into the formula, the result will also be garbage. Accordingly,
when an analyst runs the numbers she is almost certainly working with
either outdated or inaccurate data. Fundamental analysts waiting for
confirmed government supply and demand data will be calculating months

---

after the fact. Alternatively, if they are calculating based on estimates
(whether they are government or personally derived), it is nothing more
than a guess.
Most recall the simple supply and demand cross charts taught in high
school and college economic courses; unfortunately, this academic practice
erroneously simplifies a concept that is actually highly complex. In my
opinion, what appears to be the most straightforward form of commodity
market analysis—fundamental—is actually the most difficult in practice.
Because of the massive complexity that comes with estimating current
supply and demand details of any given commodity, the seemingly simple
mathematical equation fundamentalists use to speculate on prices can be
confusing at best, but misleading at worst. In addition, regardless of the
time dedicated to deciphering the market’s fundamental code, it can be
extremely problematic for a trader to succeed using this method of analysis
alone.
In order to understand the place of the commodity markets, one needs to
consider the bigger picture.
Asset classes are certainly not limited to these five groups, but these are the
most common categories. Obviously, any classification is rather arbitrary
or, at least, subjective. Even wine or art can be seen as specific asset
classes, as much as volatility or weather. On the basis of any assets,
including the latter, derivatives or structured products can be developed and
traded.