Winning with Fundamental Analysis

Fundamental analysis is an important part of stock analysis. At the most basic level, fundamental analysis is about getting a grasp of the health of a business and what its continued outlook will be in the future. It is more than just an overview of the company in financial terms. Although reading and understanding financial statements and annual reports is a big part of fundamental analysis, that’s not all it is about. Essentially, fundamental analysis is also a very important tool to make use of in stock trading.

Looking at Market Competitors

The stock market has long been used as a barometer of a company’s worth. However, there is a belief that the stock market can be in error sometimes.  In such a situation, one can look for and buy underpriced stocks, then wait for the stock market to change the assessment of the stocks. This is one way of making a profit in the stock market.

How do you then find which stocks are underpriced? Simple. You need to need to analyze the financial reports of competing companies and so that you can evaluate their worth, and find out if the prices of those company’s stocks are overvalued or undervalued in the current market.

Market Value versus Intrinsic Value

A stock has what is known as “intrinsic value.”  Basically, this means that any stock has true or integral worth.

You arrive at this intrinsic value, by assessing the essentials of a company, as what may be found in its annual report and financial statement.

If the market value of a stock (or how it has been priced in the stock market) vastly differs from what the true or intrinsic value is, especially if the market stock is lower, then, of course, it will be a good time to invest and buy stocks of that company.

The reverse holds true also. If a stock is overvalued in the stock market, compared to your findings by making a fundamental analysis, then it would make no sense to buy stocks of that company.

Online Trading

With technology having made great advances in the way information is transmitted and exchanged, many investors have turned to online trading. The activities in this area are another good thing to explore.

Key employees and officers of a company are among the first ones to know if the company is doing well or is about to fall down. They talk, and such talk gets passed around, sometimes even making it online. Stock market investors have their ear to the ground regarding such talk.

There are those who are known to be frequent and heavy investors, buying and selling massively, that’s why their movements always show up in the online stock market charts.

Taking note of the trading patterns that emerge in online stock volumes is crucial. These patterns, as made the key players, or the frequent and heavy investors, can point out which way to go.

That’s why it’s really great for those interested in trading that online tools such as charts can now be availed of. Charting combined with fundamental analysis can provide us with deep and logical information that will serve as our guides to successful stock trading.

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Symbol Bid Ask Spread
EURUSD 1.22320 1.22340 2
GBPUSD 1.38790 1.38820 3
USDCAD 1.24370 1.24400 3
USDJPY 111.100 111.120 2
USDCHF 0.95910 0.95940 3
AUDUSD 0.79900 0.79930 3
NZDUSD 0.73030 0.73080 5
EURGBP 0.88110 0.88140 3
EURCHF 1.17330 1.17360 3
EURJPY 135.900 135.930 3
AUDJPY 88.770 88.820 5
GBPJPY 154.190 154.250 6
XAUUSD 1326.81 1327.21 40
XAGUSD 16.933 16.983 5