Understanding Fundamental Analysis_1. Understanding Fundamental Analysis

Lesson 1: Understanding Fundamental Analysis

Fundamental analysis aims to figure out the value of a company by
looking into financial figures from its annual report and using other qualitative data
about the business and the circumstances in which they operate.

This type of analysis believes that over the long term, a stock price will
reflect the corporation's value, or what's commonly referred to as intrinsic value.
Fundamental analysis is able to assess the economy as a whole the analysis of an
industry, or that of an individual company. A combination of these figures will help
you know if the shares are undervalued or overvalued, and perhaps allow you to
identify the potential value of a stock in the near future. In the forex market, unlike
technical analysis which primary focus is the current price, fundamental analysis
looks into everything except the current price. While fundamental analysis could not
be the right approach for short-term traders in day-today markets, it is the
fundamental forex factors and the way they are reviewed that can offer a possible
long-term outlook.