Technical vs fundamental analysis

Commodity traders just like any other financial trader rely on two different approaches when it comes to taking positions in a particular market.

Given that Swiss commodity trading companies focus on physical trading and therefore have longer time horizons than "paper" traders, fundamental analysis plays a particularly important role and requires the fundamental analyst to know his particular market intimately.

In practice however, many market players use technical analysis in conjunction with fundamental analysis to determine their trading strategy, especially when trading on their own accounts.

  • Fundamental analysis is a method of forecasting the future price movements of a commodity based on economic, political, environmental and other relevant factors that will affect the basic supply and demand of whatever underlies the commodity (or financial instrument).
  • Technical analysis is a method of predicting (short term) price movements and future market trends by studying charts of past market action which take into account commodity price, trading volume and, where applicable, open interest.

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The Swiss Trading & Shipping Association is a non-profit, non-political Swiss association representing companies active in commodity trading and shipping activities, trade finance and related services.

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