StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Nobody downloaded yet

Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs. Technical Analysis - Coursework Example

Comments (0) Cite this document
Summary
The study "Does the Efficient Market Theory Apply on the FOREX Market? Fundamental Analysis vs. Technical Analysis" discusses whether the efficient market hypothesis is valid or applicable in the foreign exchange market or not, and, which is the fundamental analysis vs the technical analysis…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.4% of users find it useful
Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs. Technical Analysis
Read TextPreview

Extract of sample "Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs. Technical Analysis"

Download file to see previous pages Just to give you an insight into the battle between the fundamental and technical analysis; the technical analysis is based on the price movement of the stock whereas the fundamental analysis is done based on the study of financial statements and statements of cash flows and various other fundamental economic indicators.
Realistically speaking, the efficient market hypothesis is applicable to the foreign exchange market. The technical analysis is based on the price movement of the stock. Any company with a transparent history of the stock trade is a potential candidate for technical analysis. Consider two people who are studying a company. Both of them are looking to invest in the company (to buy its stocks). The person “A” who is a fundamental analyst will be looking at the product of the company, its finances, and management to evaluate its value. Based on these tools, he will see if the value of the current price of the stock is less than its intrinsic value. In that case, he will buy the stocks.
On the other hand, you have the person “B”, who is also studying the same company to invest in. This person is a technical analyst, he will not study the fundamentals of the company, i-e the financial statements, the statement of cash flows, and the income statement. He will simply look at the stock’s performance in history. He will try to squeeze out some patterns from the past performance of the stock. This study is usually done through reading the past charts of the stock’s performance, highlighting the ups and downs. If the trend is looking upwards, the person “B” will buy the stock. In both cases, both persons got to the same conclusion of buying the stock of the same company, but their methods were entirely different. The person “B” does not even have to visit the company to do the technical analysis.
Now implying the same method on the foreign exchange market, we can deduct whether the ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Does the Efficient Market Theory Apply on the FOREX Market Fundamenta Coursework, n.d.)
Does the Efficient Market Theory Apply on the FOREX Market Fundamenta Coursework. https://studentshare.org/marketing/1747898-proposed-working-title-does-the-efficient-market-theory-apply-on-the-forex-market-fundamental-analysis-vs-technical-analysis
(Does the Efficient Market Theory Apply on the FOREX Market Fundamenta Coursework)
Does the Efficient Market Theory Apply on the FOREX Market Fundamenta Coursework. https://studentshare.org/marketing/1747898-proposed-working-title-does-the-efficient-market-theory-apply-on-the-forex-market-fundamental-analysis-vs-technical-analysis.
“Does the Efficient Market Theory Apply on the FOREX Market Fundamenta Coursework”. https://studentshare.org/marketing/1747898-proposed-working-title-does-the-efficient-market-theory-apply-on-the-forex-market-fundamental-analysis-vs-technical-analysis.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs. Technical Analysis

Does the efficient market theory apply on the FOREX market

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... the efficient market theory apply on the FOREX market Fundamental analysis Vs. Technical analysis Background It was suggested by Obstfeldand Rogoff (2000) that the exchange rate is the single crucial relative price in the economy because it spreads into a vast range of other transactions. But since the inception of the floating rate in the 1970s and 80s the exchange rate has become too volatile in the short term range to be fully explained by the fundamental based exchange rate theory. That’s the reason for triggering the debate between the ...
10 Pages(2500 words)Essay

Efficient Market Theory

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Efficient Market Theory Introduction “A market is efficient with respect to a particular set of information if it is impossible to make abnormal profits by using this set of information to formulate buying and selling decisions”, and such market is called efficient market. Efficient Market Hypothesis postulates that stocks will always be traded at fair value, meaning all the factors both positive and negative are fully factored in the stock prices at all times. Any information, whether published or insider, will reflect in the prices...
7 Pages(1750 words)Essay

Does the efficient market theory apply on the forex market Fundamental analysis Vs. Technical analysis

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the efficient market theory apply on the forex market Fundamental analysis Vs. Technical analysis Introduction In the international trade, the buyer or seller of the products wants to have payment in his home currency. This needs an exchange of currencies from that of a seller to that of a buyer. Any international trade will involve in any two instantaneous transactions: Exchange of the products in a physical form Sale or purchase of foreign currency In any international trade, the sale or purchase of any product will affect only one...
16 Pages(4000 words)Literature review

Evaluating the Efficient Market Hypothesis by Using the Forex Example

Also, Fama assumed that capital circulation has lower transaction cost. As such, every investor shares the same quality of information, under a perfectly efficient market, and so investors are unable to generate excessive returns.
If the securities market was perfectly efficient then fundamental analyses and technical analyses would not be useful at all. Fundamentalists, who are centered on the ‘intrinsic value’, assert that the main failure of EMH is being too focused on long-term equilibrium while at the same time not paying any attention to the companies’ activities that generate those performances. Also, the important relationships between the financial market and businesses, or the success or failure of...
24 Pages(6000 words)Essay

FOREX (Foreign Exchange Market )

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... ERM and the UK 1992 Crisis UK’s entry into the ERM was short-lived. The country’s economic welfare deteriorated soon before and after joining the ERM. Interest rates, inflation, and economic growth were critical to control as far as UK’s was concerned. Even after experiencing a boom in late 1980s, a looming recession was inevitable. This recession became a recipe for the 1992 UK crisis. Before joining the ERM, UK should have considered domestic interest rates and their relationship to inflationary pressures in the economy. In essence,...
1 Pages(250 words)Essay

Market Analysis

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Research and Analysis on the of the Online Shopping and Gaming Market The exponential growth of internet use across the world has brought with it the advent of online shopping and similarly disrupted the gaming market as more gamers opt to indulge in their passion over an internet connection. Just like in gaming, online shoppers can be categorized as either hardcore, moderate or the mass market segment. The first two categorizations are the key drivers of the online shopping and gaming market. The later will only undertake online shopping...
2 Pages(500 words)Assignment

Market Analysis

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Market Analysis CanGo Market Analysis For those who have been involved in video/computer gaming market for a various years, they probably feel that they pretty understand the market; they have a good understanding of who the customers are, what they want, and their buying patterns. If you come up with this hard-won information in the online gaming sector, however, it will be somehow helpful but utterly horribly wrong. Of course, online players purchase video and computer games, but the market of online gaming should be treated separately...
4 Pages(1000 words)Essay

Market Analysis & Industry Analysis Tablet Market

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Market Analysis & Industry Analysis This paper was a market analysis and industry analysis research that focused on a product which has been intended for the tablet market. Named the Slate, this is to be introduced as a tablet that comes to compete with two major forms of tablets on the current market. The first form of tablets is branded tablets, which come under the line of tablets produced by popular manufacturers such as Apple, Amazon, and Samsung. There is also what is known as consumer tablets, which come from lesser known...
15 Pages(3750 words)Term Paper

Market Analysis

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Winery in Galveston Market Analysis The American wine industry is a steady and present-day market in the United s with an opportunity to develop. Galveston Winery offers services pertaining to wine production work prescribed and authorized by the Department of Alcoholic Beverage Control public ABC license categories and their elementary civil liberties. As a wine manufacturer, the license type 01 best suits the activities carried out during the course of beer manufacturing and sales (Department of Alcoholic Beverage Control 1). It approves...
5 Pages(1250 words)Research Paper

Efficient market theory

...Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs Technical Analysis... Market Efficiency Theory In the context of finance and trading the term market efficiency theory isused to refer to the idea that financial markets such as bond and equity markets operate on the basis of information (Chicagobooth.edu 1). In other words this means that the price at which a particular asset or stock is trading in the stock exchange are based on the quality and the quantity of the information regarding that stock. This event occurs when traders in the stock exchange make decision regarding the purchase and sale of a particular ...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Coursework on topic Does the Efficient Market Theory Apply on the FOREX Market Fundamental Analysis vs. Technical Analysis for FREE!

Contact Us