The Complete Guide to Fundamental Analysis in Trading
Fig 1. Key macroeconomic indicators dashboard
Fig 2. Analyzing company financial statements
Fundamental analysis evaluates securities by analyzing economic, financial, and other qualitative and quantitative factors to determine their intrinsic value. Unlike technical analysis, it focuses on the "why" behind price movements rather than the "when".
Essential Economic Indicators
These macroeconomic indicators provide the foundation for analyzing currencies, stock markets, and commodities. Professional traders calendar these releases to anticipate market movements.
| Indicator | Release | Market Impact | What It Measures | Top Sources |
|---|---|---|---|---|
| GDP Growth | Quarterly | Very High | Total economic output | BEA, Eurostat |
| CPI Inflation | Monthly | Very High | Consumer price changes | BLS, ECB |
| Employment Data | Monthly | Very High | Labor market health | BLS, StatCan |
| Interest Rates | 6-8 Weeks | Extreme | Central bank policy | Fed, ECB, BOE |
| Retail Sales | Monthly | High | Consumer spending | Census Bureau |
| Manufacturing PMI | Monthly | High | Industrial activity | ISM, Markit |
Fig 3. Federal Reserve policy decision meeting
Fig 4. Market reaction to economic data releases
Corporate Fundamental Analysis
Fig 5. Key financial ratios for stock analysis
Fig 6. Analyzing company earnings reports
Financial Statements
- Balance Sheet (Assets/Liabilities)
- Income Statement (Revenue/Profit)
- Cash Flow Statement
- 10-K/10-Q Reports
Valuation Metrics
- P/E Ratio
- P/B Ratio
- EV/EBITDA
- Discounted Cash Flow
Qualitative Factors
- Management Quality
- Competitive Advantage
- Industry Trends
- Regulatory Environment
Combine quantitative analysis (financial ratios) with qualitative assessment (management interviews, industry research) for complete fundamental analysis. Always compare metrics against industry peers rather than in isolation.