Why Do We Need Fundamental Analysis

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Fundamental Analysis plays should play a significant role in our trading as it is important to understand the movements rather than just being able to identify them.

Once we understand the move it gives us more confidence in what we are doing, if we can interpret what the market is thinking, we have the potential of predicting which way the market is going to move next

Hence it is obvious how having this knowledge has a huge potential when it comes to improving your trading success. Some of the common objections to trading fundamentals as their main guide include “You only need to look at charts, and applying fundamentals is unnecessary”.

However purely using technical analysis is like driving a car but only using the rear view mirror. It will work sometimes like when driving down a long straight road, but over time it is useless. If you take a look at professional traders, you will notice that they all have something in common. And that is they all use specific tools like Bloomberg and Reuters. These famous terminals are built specifically to bring news and information as fast as possible to traders. The costs associated with them are also usually very high.

The fact that many banks and financial institutions continue to use them shows us how important they are to the large institutional traders. Why else would they be spending this kind of money if staring at price charts and indicators can be found for free at most places.

The other objection that many people have is that fundamental analysis is too hard and complicated to understand unless you have training at a bank or have some fancy finance related degree.

In my trading crash course, I will show you that fundamentals are easier than technical if you know what to for.