What Is Fundamental Analysis and Why This Analysis Is Important For The Economy

Fundamental Analysis is done to understand the economy and predict the value of the intrinsic stock which is based on various factors that include financial factor, economic factor as well as qualitative and quantitative values. It observes numerous numbers of element that affects the trading market. As it’s all about the earnings which are the main course for an investor or a trader. They always tend to know the financial condition of a company and how much money it can make further. Increasing profits for a company eventually increase the stock price and market value of that company. Let’s take a look at the importance of this analysis and how it can be done effectively.


The work of analyzing a company and stocks is done by fundamental analysts. These analysts use multiple methods like the top-down method and bottom-up method and sometimes use both methods to ensure effectiveness according to the data. It analyses which stocks are better and which are not performing well to predict the stock value fluctuation and make a profit out of it. Fundamental analysis displays the whole picture of the possible movements and outcomes of both individual stocks and stock markets.


Price to Earnings Ratio – P/E is the ratio that compares the present selling price of a company’s stock to its per-share profit.

Price to Sales Ratio – P/S ratio gives the value of a company’s stock price compared to the revenues of that company.

Price to Book Ratio – P/B ratio is also called a price to equity ratio. This ratio compares a stock booking value to its market value.

Earnings Per Share – EPS is calculated by the company’s net income lower dividends on a specific stock which is divided by the number of outstanding shares of that company.

Return on Equity – To find the return on equity, the net income of the company is divided by the shareholders’ equity


The Psychology of Forex Trading

In this article I will discuss about the psychology of forex trading.

The Psychology in Forex Trading

Since the beginning of the industry, there has been a noticeable change in the approach of the traders towards the market. The personality of a trader has a huge impact on the trading of the trader. The psychology of forex trading is mainly focused on the benefits that are associated with the present industry. There are many dynamics in forex trading and a trader cannot control all of them, the trader should work with proper logic. Wild hunches and guesses are not ideal for forex trading.

The Fear Factors

Fear is one of the main components of the psychology of forex trading. A trader plans to enter a market with huge confidence, but these traders slowly lose their confidence when they face the real pressure and methods of the market, this is where fear comes in. When a trader faces any loss, then fear takes over him or her, the trader is afraid to make more trades as they fear that they might fail again. It is advised to channelize the fear in a positive way so that the traders can gain good results from the trades and slowly get used to the methods of the market.

Right Models for Forex Trading

There are many methods that can be used for forex trading, but finding the right model for a trade is very challenging. The trader should research properly about the techniques that he or she is using into the market. They should have a proper psychology to make proper adjustments in different unfavorable situations that they can face in the market. There are different elements present in a forex market and a trader should be mentally prepared to tackle those elements.

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