If you've ever wondered how the U.S. monetary system functions and who runs the show, keep reading. In this article, we will break down the structure of the Federal Reserve System and help you understand how it operates. 🏦 The Federal Reserve System, often referred to as the Fed, is the central banking system of the United States. It was created in 1913 by the...
Fundamental analysis is a method of analyzing financial markets that involves examining a company's financial health, including its earnings, revenue, debt levels, and other economic indicators. The goal of fundamental analysis is to determine the intrinsic value of a company's stock and make investment decisions based on that value. Fundamental analysts...
In my previous post , we started to analyze the most popular financial ratio in the world – Price / Earnings or P/E (particularly one of the options for interpreting it). I said that P/E can be defined as the amount of money that must be paid once in order to receive 1 monetary unit of diluted net income per year. For American companies, it will be in US dollars,...
How to apply fundamental analysis and macroeconomic trends to complement your technical analysis and trading strategy Fundamental analysis and macroeconomic trends are important tools for traders who want to understand the underlying forces that drive the market. Technical analysis, on the other hand, focuses on the price action and patterns of the market. By...
In one of my first posts , I talked about the main idea of my investment strategy: buy great “things” during the sales season . This rule can be applied to any object of the material world: real estate, cars, clothes, food and, of course, shares of public companies. However, a seemingly simple idea requires the ability to understand both the quality of...
I previously gave a presentation on the best pairs of technical indicators and decided to do the same for fundamental indicators, as many believe that the two go hand in hand. As an investor, understanding fundamental indicators can help you make informed investment decisions and maximize returns. In this guide, we will explore the top 5 pairs of fundamental...
As you see NFP release days often generate reversals, minor pullbacks on daily or are at the beginning of big moves, acting as catalysts. Though I dont believe in big NFP reversal starting on low volume trading days, as we are in Easter Holidays. Hence today´s NFP day may go unnoticed as most of traders are gone for Easter holidays. But otherwise we could see a...
Hey traders, This week, on Friday, we are expecting Non-Farm Payroll Report. In this educational article, I will try to explain to you why that fundamental data is so important and I will share with you the insights how to trade it. Non-Farm Payroll is one of the most important indicators for forex and stock markets in the economic calendar. Being released on...
In the previous post we learned what financial ratios are. These are ratios of various indicators from financial statements that help us draw conclusions about the fundamental strength of a company and its investment attractiveness. In the same post, I listed the financial ratios that I use in my strategy, with formulas for their calculations. Now let's take...
I hope that after studying the series of posts about company financial statements, you stopped being afraid of them. I suggest we build on that success and dive into the fascinating world of financial ratios. What is it? Let's look at the following example. Let's say you open up a company's balance sheet and see that the amount of debt is $100 million. Do you...
In this post, I will share the some of the most useful trading sites that are available to you and how you are able to utilize them to your advantage whether it's for fundamentals, charting, analysis, performance tracking, news events or just to follow your favorite professionals and their ideas & education that they share publicly. First and foremost, if you...
In the previous post we started to analyze the Cash flow statement. From it, we learned about the existence of three cash flows - operating cash flow, financial cash flow, and investment cash flow. Like three rivers, they fill the company's "lake of cash" (that is, they go with a "+" sign). However, there are three other rivers that flow out of our lake,...
Currency correlation is important to understand in forex trading because it could impact your trading results often without you even knowing it. In this post, I will share some information about correlations in forex trading and how you are able to use it to your advantage to avoid unnecessary losses. Throughout my journey as a beginner trader, I have bought or...
Today we're going to start taking apart the third and final report that the company publishes each quarter and year - it's Cash flow statement. Remember, when we studied the balance sheet , we learned that one of the company's assets is cash in accounts. This is a very important asset because if the company doesn't have money in the account, it can't buy raw...
Fundamental and technical analyses are two approaches to analyzing financial markets, such as stocks, currencies, and commodities. Here are the key differences between the two: Definition: Fundamental analysis involves analyzing the economic and financial factors that affect the value of an asset, such as company earnings, industry trends, and macroeconomic...
Everything you need to know about fundamental analysis Fundamental analysis is a technique for assessing the true value of assets, such as stocks or bonds. This type of analysis is used by investors and financial analysts to make investment decisions based on the underlying financial and economic factors that drive asset performance. In this post, we will take a...
In the previous post , we began looking at the Income statement that the company publishes for each quarter and year. The report contains important information about different types of profits : gross profit, operating income, pretax income, and net income. Net income can serve both as a source of further investment in the business and as a source of dividend...
The fundamental concepts of technical analysis are support and resistance levels. Technical analysis strategies are based on psychological and mathematical patterns from previous periods. One such pattern is resistance and support levels, which determine the most likely price direction change or confirmation of trend continuation. They can be used by both new and...