Fundamental Analysis

Fundamental analysis

Investors will use different analysis techniques to try and predict how markets will perform. Fundamental analysis is one such method. Although it does have its good points, it is best to combine this technique with other sources of information to plan your trades.

Remember that past performance does not always indicate future results, so you should always consider other factors before opening a new position.

The main fundamental elements to look out for are:

  • Interest rates
  • Trade balances
  • Monetary policy
  • Inflation
  • Gross domestic product (GBP)
  • Labour market figures

Limitations

The above events will only have the expected impact if all other elements remain the same. For example, if government spending increases to combat a drop in inflation, the outcome will be neutral.

Stay alert

Traders use various tools to keep themselves informed about upcoming economic events. One such method is an economic calendar. TradeFred provides all clients with a free calendar to help you plan your strategy.