HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Trading based on fundamental analysis


Fundamental analysis has been used for decades by investors wanting to identify the factors that can have an impact on asset values. Such factors can be related to organizational performance, politics, the economy or even speculations and they can sometimes undervalue or overvalue an asset. The study of fundamental analysis can help give investors the opportunity to position themselves at the right price, or to try to profit from the sale of an asset. 

How is it done?


Fundamental analysis is based on figures that are normally public and accessible to everyone. It can be done by reviewing a company’s balance sheet, a government’s budget, or a financial institution’s evaluation. This analysis can help investors understand an asset’s potential and compare its current value to its true but underpriced or overpriced value. Reviewing the fundamentals is key to creating realistic trading strategies. 

Fundamental analysis for different types of assets


Although the fundamental analysis is popular for evaluating the price of stocks, it can also be used to evaluate other trading assets. In terms of company stocks, investors will focus on a company’s financial figures, management style, competition or growth potential. It is important to understand the nature of the industry that the company is classified in so that you can better predict possible developments.  

In terms of money markets, investors will need to review a country’s financial policies, trade agreements, external political pressure and of course domestic bank liquidity. Every single aspect mentioned can affect a currency’s value, momentum, and overall performance. A country enjoying a strong economy can often boost the value of a currency. 

Fundamental VS technical analysis


The analytical approach you decide to take will depend on the type of investment you are looking for. Fundamental analysis is best used for long-term investments and for finding the intrinsic value of an asset before buying. On the other hand, technical analysis is best used for short-term value-fluctuating trades. 

“Fundamentalists” will almost always allow time for a return on their investment, while “technicians” are mostly going to look for quick entry and exit trades. This, of course, does not mean that you have to use just one or the other tool. Many investors use a combination of the two analytical types in an effort to create a strategy that works best for them. 

Things to consider


Fundamental analysis has both pros and cons. You are going to have to invest a significant amount of time to be able to analyze the large volume of information. On the other hand, by doing that, you will be able to base your investment on solid data, which can lead to better investment decisions. No matter how you choose to analyze assets, however, past performance does not guarantee future outcomes.

#source


RELATED

Discover how to trade commodities CFDs in 2020

Learn the basics of how to trade commodities CFDs. Discover types of commodities trading (precious metals, energy, food crops) and commodity brokers...

Unlocking the World of Commodities: An In-Depth Exploration

Commodity markets have often been portrayed as a realm for high-risk individuals, and while there's some historical accuracy in that depiction, the reality is that nearly every type of investor engages in commodity markets...

What is Bond Market

The bond market, also called the debt market or credit market, is an online marketplace where people trade bonds. These bonds can be issued by governments...

Bitcoin Trading - The Ultimate Guide

Bitcoin is a cryptocurrency and a new and unique financial vehicle, unlike anything the world has ever seen. It’s called a cryptocurrency because...

What is spot trading in crypto and how does it work?

In a spot market, traders can immediately exchange their cryptocurrency for fiat currency or another cryptocurrency by placing a buy or sell order...

How to Assess PAMM Account

PAMM Account Monitoring Service provides an extensive overview of tools for analyzing the work of managers. In general, all monitoring...

What Is Shiba Inu Coin?

Shiba Inu coin is a “meme coin” that caught the attention of crypto enthusiasts over the last few years. The coin is one of the largest of the "dog coins" and a direct competitor to Dogecoin...

How to Trade Commodities Online with the Best CFDs Broker

Trading commodities online is very popular among traders. With the option to trade commodities on the futures market or through derivatives such as Contracts for Difference (CFDs)...

Crypto CFDs: A Comprehensive Look at the Modern Alternative to Direct Cryptocurrency Trading

Cryptocurrencies have marked their presence in the investment world with their decentralized, transparent, and private characteristics. While direct ownership of cryptocurrencies remains a common choice...

Blockchain Beyond Cryptocurrencies

Blockchain has become one of the most influential technologies after being one of the key elements supporting digital currencies. It is the technology...

Swing Trading: a Trading Style for Professionals

The classification of traders might seem sketchy. However, there is a clear division between them based on the period of holding an open position...

What are binary options in the global financial market

In the global financial market, as in many other areas of commercial activity, there are often categories that seem to the uninitiated person very difficult to understand and use...

What is the Bitcoin Fear and Greed Index?

As a cryptocurrency trader, you will eventually encounter the “Crypto Fear and Greed Index.” This article explores this valuable tool, provides insights on how to utilize it, and outlines its significance...

Why is Crypto currency so Popular?

Cryptocurrency has emerged in the last 10 years and continues to gain popularity among various sectors of the population. There are hundreds...

Online Cryptocurrency Trading: Features and Advantages

The year 2008 marked the birth of the crypto market. It was in August when the domain bitcoin.org was registered and the description (White Paper) of the cryptocurrency was published...

A Comprehensive Guide to Oil Trading: Strategies, Factors, and Techniques

Oil, a vital and highly valued commodity, plays a pivotal role in numerous industries worldwide. This non-renewable energy resource exists in various forms, with crude oil being the most prominent...

How to Create and Sell an NFT

In 2021, NFT triggered an immense interest across the internet. No wonder: people are ready to pay vast sums of money for NFTs, the cost of which can go up to millions of dollars...

Features of Successful Oil Trading at Forex

Oil is a commodity asset of high volatility. This is a key energy carrier with stable and high demand. Also, oil can be safely called one of the most...

Artificial Intelligence and Machine Learning in Trading

Over the past 60 years, AI and machine learning have made a breathtaking jump from science fiction to the real world. Though these technologies are still...

Ethereum Versus Ethereum Classic: What’s The Difference?

Although Bitcoin was the first-ever cryptocurrency to be created, several cryptocurrencies have since arrived that offer additional features, benefits, and use cases, Ripple and Litecoin...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.