An In-Depth Discussion about Fundamental Analysis
This discussion was penned by the co-author of the first edition of Getting Started in Currency Trading, the late Jim Bickford. It remains relevant today. Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy, and societal factors (to name just a few elements) within a business cycle framework. If you think of the financial markets as a big clock, the fundamentals are the gears and springs that move the hands around the face.