FUNDAMENTAL ANALYSIS

Fundamental analysis is a process of analyzing the market with the news and facts that generates the initial direction. Fundamentally there are certain news which are the major reasons for the market price action. These news can be about economical or political changes and happenings. Since this acts as a trigger to the economical raise or fall of a country, it is followed by most economist and hence by traders and fund managers. This method to predict the next move in the market, though a best system may not work all the times. For example, there might be different news released at the same time the same day. (i.e US employment positive, retail sales negative, neutral interest rate decision, trade deficit widens). In this case no pro trader knows what will happen next, is the accepted truth. But generally we can compare the history of the market in the past and come to a conclusion how the market has reacted when there was a similar economical figure released. With this clue we can easily predict the direction of the next move, but again how much and how long the market is going to continue in this new direction, purely depends on the current situation. When we approximately guess the probable future price, we may require a conformation on our view for which we look into the charts.