Fundamental analysis

Fundamental analysis is an interpretive technique to evaluate data such as weather forecasts/ crops forecasts/ political events/ economics, trade, inflation/ wars/ drought/ international unrests/ snow storms/ floods/ historical patterns/ season/ or any other commination of all. Fundamental data reflect into situations shown in charts of price assets, that show deviations and price developments, trends, etc.. Those, who trade on the basis of fundamental data ask "Why" and "What if" and they seek answers in various reports, news and press. The are looking for fundamental reasons for why do they think a certain price development prediction.

But fundamental data is incomplete:

• It is not possible to know everything about all assets due to many variables.
• Every information has different value and importance.
• Not all data are equal, some of them are more important than others.
• And who says that all information is actual or accessible?
• Much of market information is true.
• Much of market information is misleading.
• Much of market information is manipulation of major analytical sources and agencies.
• Who can guarantee that many information sources are not pre-paid?
• Who can guarantee that much information is not only an attempt to lure money from the pockets of naive consumers of news?

Either way, analytical and desicion-making processes using the fundamental approach are the most frequent tool to try to predict price movements. Fundamental data are all data in words, news, analysis, recommendations, tips.

There is a wealth of sources for using the fundamental messages and data coming from markets. Press, TV, specialized financial portals, analysts news and news from more or less reputable companies. Fundamental market data are highly overestimated by many traders and refused by many others. Often the market news or following analysis quite objectively justify the assets price movements and situation on the share, commodity and currency markets. However, it is quite common, that out of 10 tips on price development of certain asset, e.g. share, is the half for rise, part for decline, other analysts recommend discretion. Interpretation and evaluation of market events can be subjective and misleading. Individual analysts and financial advisors often copy from each other and often let their fantasy and their judgement out of reality. They often justify price movements of chosen assets by event, taken out of context of all actions, that have influence on price movements of those assets, e.g. within the price trends.

Probably the most problematic option for using the fundamental news and information for the speculator"s own trading decisions, mey be using a variety paid service from pseudo professionals, who are paid for all sorts of analysis and trading recommendations. Such services are often nothing else than a tip competition. Therefore always use your chosen paid service on Demo versions for trading for free and find out whether it can be useful and produce results for You, regarding Your experience of risk perception, mentality and trading approach.

Market news, analysis and studies of reputable agencies and sources use always with judging of technical situation (see technical analysis), using your knowledge, experience and common sense. Use the opportunities of fundamental analysis for your own benefit and not for the benefits of authors of various reports.