"Who owns the information, he owns the world". Few know that this legendary phrase belongs to Rothschild. Yet, even fewer are aware that he was the first to learn the news about the defeat of Napoleon in the decisive battle of Waterloo and earned 40 million pounds on the stock exchange. Nowadays, financial data sources also play a tremendous role in trading. Usually, those speculators succeed who know how to find the necessary information and use it appropriately. In fact, there are many different tools at the disposal of modern investors dealing with fundamental analysis. These tools can be divided into two main groups. The first group includes basic data that needs additional processing and analysis, e g. company reports, various tables with economic information, etc. The second group, on the contrary, represents only processed data such as analytical reports that are made from scattered sources of information.
The economic calendar is considered to be one of the main sources of fundamental analysis. Experienced traders even joke that their day begins not with a cup of an invigorating coffee, but with viewing the economic calendar for the upcoming session. It is no surprise as the calendar helps them track significant global and regional economic events. In the digest, they can always find the most important macroeconomic statistics in real time, as well as a schedule of speeches by the heads of central banks or key political figures. Naturally, access to this information does not automatically give traders an ultimate advantage over other stock market players. The economic calendar primarily helps investors to understand the nature of movements in the equity and forex markets as well as any changes in other assets.
When analyzing the economic calendar, traders deal with fundamental data that can influence the sentiment in the stock market. For example, if you are trading the USD/CAD pair, you will be mostly interested in the macroeconomic events of the particular regions. This is absolutely logical. The publication of crucial news from Canada or the United States may trigger volatility and thus affect the asset you trade. In this case, the question is how you realize that the upcoming release of a particular piece of news is really paramount. Well, to start with, speculators must learn to read the economic calendar, so as not to wander in vain in an endless field strewn with various economic data.
Good news! You have to know only two things:
Firstly, the economic calendar itself can filter publications by the level of importance (you just need to understand how it works).
Secondly, when analyzing the market, you should always pay attention to the most significant indicators that make up the macroeconomic statistics:
– money supply volumes;
– changes in key rates;
– considerable decline or rise in inflation;
– GDP change;
– PMI indexes;
– level of demand and supply;
– payrolls data;
– unemployment level.
Macroeconomic data is vital as it can affect absolutely all market segments. For example, an unexpectedly strong increase in inflation may lead to a currency appreciation and a decrease in the bond market. The shares of companies operating in the manufacturing sector are greatly influenced by the news about growing demand for commodities within the industry as well as regionally.
Successful traders always try to keep abreast of macroeconomic events. In addition to the economic calendar, such events can be found in the reports of reputable agencies and government institutions. In the United States, for example, the Economics and Statistics Administration (ESA) is responsible for preparing timely economic analysis and disseminating principal federal economic indicators. In the European Union, Eurostat publishes high-quality Europe-wide statistics and economic indicators.
Analytical bureaus and credit rating agencies also help greatly traders who want to closely follow market trends. As a rule, large organizations have at their disposal data that is collected from different countries. The advantage of such organizations is that they not only provide the necessary information (for example, industry and regional statistics) but also render consulting services for their clients. Speculators can get qualified assistance in market analysis, risk management, assessment of the reliability and creditworthiness of companies in comparison with other issuers.
Of course, traders can do these things by themselves. Nowadays, there are a lot of open Internet sources where they can find useful information: market quotes, data on stocks, futures, options, and reports of individual companies. In particular, investors should work with such news and analytical platforms as Bloomberg, Macrotrends, Investing.com, etc.
Quarterly and annual reports of issuers can also be found on the websites of the companies. Among plenty of financial documents, traders should search for the accounting statements of the organization. Notably, the accounting statement is divided into several parts, but the most informative ones are the balance sheet and the income statement. The balance sheet is the most important document.
The balance sheet covers various aspects of the financial life of the enterprise at a particular time: financial conditions, equity, and liabilities of the company. It contains everything investors need to calculate the main financial indicators and coefficients. This is why most often traders start evaluating the company with the assessment of the balance sheet. It gives a complete picture of all the assets and liabilities of the company at the beginning and end of the reporting period. It enables speculators to find out:
financial position of a company
the main source of income
Comparing the asset and liability sections in the balance sheet table allows traders to:
– determine the financial stability of a company;
– analyze its solvency and liquidity;
– evaluate the probability of bankruptcy;
– find additional ways for improving the financial condition;
– identify both potential growth prospects and the riskiest trends that can undermine the financial position of the enterprise.
The profit and loss statement is another form of accounting that is of interest to traders. It represents the result of the company's activities over a certain period of time. In contrast to the balance sheet, the given data reflects the difference in results with the same previous period.
All in all, the profit and loss statement provides answers to two questions:
how the company made a profit;
what entailed the losses.
When comparing expenses and income of the company, investors can analyze the composition, structure, and dynamics of various types of profit, e.g. gross profit deducted from sales and net profit. The latter is the most anticipated by investors and the most significant indicator of the activity of any company. For this reason, experienced traders regularly study profit and loss reports, which are published quarterly. Their releases are always announced in advance. By examining these documents, potential investors can conclude whether the organization's strategy is effective as a whole and how profitable and safe the investment in the company might be.
The economic calendar is considered to be one of the main sources of fundamental analysis. Experienced traders even joke that their day begins not with a cup of an invigorating coffee, but with viewing the economic calendar for the upcoming session. It is no surprise as the calendar helps them track significant global and regional economic events. In the digest, they can always find the most important macroeconomic statistics in real time, as well as a schedule of speeches by the heads of central banks or key political figures. Naturally, access to this information does not automatically give traders an ultimate advantage over other stock market players. The economic calendar primarily helps investors to understand the nature of movements in the equity and forex markets as well as any changes in other assets.
When analyzing the economic calendar, traders deal with fundamental data that can influence the sentiment in the stock market. For example, if you are trading the USD/CAD pair, you will be mostly interested in the macroeconomic events of the particular regions. This is absolutely logical. The publication of crucial news from Canada or the United States may trigger volatility and thus affect the asset you trade. In this case, the question is how you realize that the upcoming release of a particular piece of news is really paramount. Well, to start with, speculators must learn to read the economic calendar, so as not to wander in vain in an endless field strewn with various economic data.
Good news! You have to know only two things:
Firstly, the economic calendar itself can filter publications by the level of importance (you just need to understand how it works).
Secondly, when analyzing the market, you should always pay attention to the most significant indicators that make up the macroeconomic statistics:
– money supply volumes;
– changes in key rates;
– considerable decline or rise in inflation;
– GDP change;
– PMI indexes;
– level of demand and supply;
– payrolls data;
– unemployment level.
Macroeconomic data is vital as it can affect absolutely all market segments. For example, an unexpectedly strong increase in inflation may lead to a currency appreciation and a decrease in the bond market. The shares of companies operating in the manufacturing sector are greatly influenced by the news about growing demand for commodities within the industry as well as regionally.
Successful traders always try to keep abreast of macroeconomic events. In addition to the economic calendar, such events can be found in the reports of reputable agencies and government institutions. In the United States, for example, the Economics and Statistics Administration (ESA) is responsible for preparing timely economic analysis and disseminating principal federal economic indicators. In the European Union, Eurostat publishes high-quality Europe-wide statistics and economic indicators.
Analytical bureaus and credit rating agencies also help greatly traders who want to closely follow market trends. As a rule, large organizations have at their disposal data that is collected from different countries. The advantage of such organizations is that they not only provide the necessary information (for example, industry and regional statistics) but also render consulting services for their clients. Speculators can get qualified assistance in market analysis, risk management, assessment of the reliability and creditworthiness of companies in comparison with other issuers.
Of course, traders can do these things by themselves. Nowadays, there are a lot of open Internet sources where they can find useful information: market quotes, data on stocks, futures, options, and reports of individual companies. In particular, investors should work with such news and analytical platforms as Bloomberg, Macrotrends, Investing.com, etc.
Quarterly and annual reports of issuers can also be found on the websites of the companies. Among plenty of financial documents, traders should search for the accounting statements of the organization. Notably, the accounting statement is divided into several parts, but the most informative ones are the balance sheet and the income statement. The balance sheet is the most important document.
The balance sheet covers various aspects of the financial life of the enterprise at a particular time: financial conditions, equity, and liabilities of the company. It contains everything investors need to calculate the main financial indicators and coefficients. This is why most often traders start evaluating the company with the assessment of the balance sheet. It gives a complete picture of all the assets and liabilities of the company at the beginning and end of the reporting period. It enables speculators to find out:
financial position of a company
the main source of income
Comparing the asset and liability sections in the balance sheet table allows traders to:
– determine the financial stability of a company;
– analyze its solvency and liquidity;
– evaluate the probability of bankruptcy;
– find additional ways for improving the financial condition;
– identify both potential growth prospects and the riskiest trends that can undermine the financial position of the enterprise.
The profit and loss statement is another form of accounting that is of interest to traders. It represents the result of the company's activities over a certain period of time. In contrast to the balance sheet, the given data reflects the difference in results with the same previous period.
All in all, the profit and loss statement provides answers to two questions:
how the company made a profit;
what entailed the losses.
When comparing expenses and income of the company, investors can analyze the composition, structure, and dynamics of various types of profit, e.g. gross profit deducted from sales and net profit. The latter is the most anticipated by investors and the most significant indicator of the activity of any company. For this reason, experienced traders regularly study profit and loss reports, which are published quarterly. Their releases are always announced in advance. By examining these documents, potential investors can conclude whether the organization's strategy is effective as a whole and how profitable and safe the investment in the company might be.
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