Fundamental Analysis – a key economic strategy.
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Fundamental Analysis – a key economic strategy.

Fundamental analysis is a key tool for global investment. It is almost impossible to trade successfully without this instrument.

  1. Fundamental Analysis
  2. What is Fundamental Analysis?
  3. What is the difference between Fundamental and Technical Analysis?
  4. Criticisms of Fundamental Analysis. Pros and cons.
  5. FAQ

Fundamental Analysis

A successful trader must have good financial knowledge. Without it, it would be impossible to lead successful trading strategy. That’s why traders are looking for the best instruments to create a full picture of the market. It is vitally important to know the key factors in trading. So, the answers to these most popular questions will be observed below.

What is Fundamental Analysis?

Experts, professional investors and traders often give recommendations about various investing strategies. It often happens that they are contradictory. Fundamental analysis is an independent method of valuing floaters and eminent-companies. Using fundamental analysis allows valuing investing attraction and reliability in a long-term period. This method simplifies the choice of the best decision among hundreds of stocks and other financial instruments. It is one of the expert methods for price prediction and trading strategy adaptation. The notion of this analysis includes different methodologies and instruments. They allow determining the future company of financial instrument price. The main aim of the research is to achieve the best result with the strategy. Fundamental analysis is aimed to value the eminent perspectives. There are some extra factors that need to be considered to fulfil this task:

  • Results of the taken decision inside the company;
  • Comparison with other similar companies;
  • Potential political risks;
  • Financial status;
  • Corporate culture. 

The main principals are based on the notion that the market is not effective. Floaters don’t usually correspond with the real eminent price. They can be either overvalued or undervalued. In this case, the object of investment is the last point.

What is the difference between Fundamental and Tech. Analysis?

Company parameters play an important role in fundamental analysis. At the same time, technical analysis is mainly focused on price action and past price data. It is usually performed in the form of a chart. The main aim of the analysis is to predict the price based on past company’s stock price performance. Experts don’t usually take into consideration the company’s data and fundamentals. Only charts are analysed to predict future performance. Technical analysis can be interpreted as an unreasonable approach. However, there is a strong correlation between price action and market traders’ behaviour. The price is formed based on demands and supplies. The price is influenced by the behaviour of the market. If the price is approaching $100, it can be defined as a psychological influence. Most of the investors think that the company can’t offer the real price. To perform the analysis, experts use different instruments:

Criticisms of Fundamental Analysis. Pros and cons.

Fundamental analysis values the health of the company. It includes balance sheet data, revenue modes and other parameters. As every approach it has its pros and cons:


  • Good for long-term investments;
  • Good identification of the company;
  • Reliable results.


  • It is not easy to get data;
  • Complex and long-lasting process;
  • Calculated for experts;
  • Data are available for influential people.


The fundamental or technical analysis which is better?

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