The importance of Fundamental Analysis – An Easy Guide

Do you want to know more about the importance of fundamental analysis? Watch our latest video and get profitable trading results.

The importance of Fundamental Analysis – Everything you Should Know About

A fatal mistake that many beginning traders will make is that they don’t understand the fundamentals of a market. While some traders can be technical traders alone and make a nice profit, they are still aware of the underlying fundamentals of the market. You don’t have to be a fundamental trader or even an expert to understand this, as some markets have major events or even seasonality that come into play.

For example, natural gas markets tend to do much better during the months of October, November, and December. This is because they are looking at the cold weather in the northeastern part of the United States where there is a massive amount of demand. The commodities markets work in concert with futures markets, so therefore they are looking ahead to demand. This is why that although it is still very cold in February, natural gas pricing tends to fall. If you know nothing about the underlying seasonality fundamentals of natural gas, it’s easy to get sucked into a bad position.

There are other markets that have seasonality as well, especially when it comes to commodities. However, there is also some currencies that have seasonality such as repatriation of money back to Japan. Because of this, it’s likely that if you do not understand any of this, you can find yourself in trouble. If you blindly trade this market, without knowing some of the statistical probabilities, you can find yourself in a lot of trouble. You also have this appear in the stock markets, as the company’s financials and of course earnings come into play. Be aware of these, and then trade the technicals accordingly.