The market movement as a discounting mechanism
A chart says more than a thousand (fundamental) data. So one could exaggerate the basic assumption of the technical analysis. While the fundamental analysis aims to determine the so -called fair value by investigating the factors influencing the supply and the demand, the technical analysis takes a completely different way. She assumes that all price -relevant information is already reflected in the course, so that only studying the price movement is required to get an adequate picture of the fundamental situation. True to the motto: When the courses rise, the fundamental, psychological and otherwise relevant factors must be Bullish. If it goes down, the price -relevant factors are also negative. The market movement discounts everything and the market is always right. Exaggeration phases up or down reflect the extreme psychological constitution of market participants in these situations, i.e. greed and fear.
