Fundamental analysis is often a methodology for analysis of an organization as a viable stock that you want to hold for long term. Fundamental analysis is more widespread within the world of investing since you're going to hold your companies for 10 to 20 years.
You do not wish that your companies go bankrupt the following day. A few of the common ratios used are P/E ratios (price earnings ratios) that measures the relative price of the stock to the earnings of the firm, the EPS (earnings per share), the debt equity ratio and tons of other ratios.
Although I have spent considerable time examining such ratios I discovered that you don't really require such info to be profitable in day trading.
I suggest trading ETFs (exchange traded funds) such as QQQQ which mirrors the movement of the NASDAQ 100. In essence, you are basically trading the index like a typical stock. Indexes typically have a huge number of stocks in them, making them much less susceptible to company specific news.
If you are in debt or going through corporate bankruptcy and are looking to raise your funds, educate yourself on nasdaq rules, nasdaq companies, and nasdaq listing requirements.
There is certainly no lack of info and no end to analysis. Being able to eliminate fundamental analysis from the decision making process is among the reasons why I recommend trading Emini index futures.
Paper Trading: Never Underestimate it!
Paper trading refers to trading with virtual money. You do not use real money. You jot down in your notebook after you bought at what price and why. Once you sell, you record in your notebook once more, why you sold and calculate the profit or loss associated with the trade.
While there is really little difference between paper trading and real trading in Emini, real trading is subjected to slippage as well as psychological elements come into play when you are utilizing real funds.
Do not underestimate the effect of psychological factors on your trading. After you have a reasonable approach and cash management methods, it is the psychological aspects which will determine whether or not you make a profit or loss.
Some traders have created software to paper trade. The system will record down the time, cost, symbol along with the position opened or closed. This saves you the trouble of keeping a paper record.
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