Basic Analysis For Share Traders

Fundamental Analysis in Share Traders

The fundamental and technical analysis are widely used for share traders but the use of these analyses
differs from trader to trader.  First of all let’s see what these analysis means.

The name itself indicates that this analysis is totally based on company’s fundamentals.  Fundamental analysis is used for long term analysis and long term returns.

Following are the few fundamental terms used to forecast and analyze the companies’ future growth, and based on this analysis the transaction of shares will be done.

• Company’s expansion or planning in coming future.


• Management processes and planning.


• Meeting of the Board of directors.


• Declaration of yearly financial statements.


• Study of past performance of the company.


• Study of quarterly, half yearly and annual reports.


• Companies involvement in foreign investment / collaboration, political or economics involvements, etc.

Company Growth

Depending on these factors and many
others, fundamental analysts prepares certain share market and share trading
related terms that will be used to forecast the company growth and
prospects.  The terms like

• Whether the share prices are overvalued or
  undervalued,


• Working capital ratio,


• Return on equity ratio,


• Debt equity ratio etc.,

Based on these terms and other fundamentals, the analysis predict the movement of share prices that is either bullish or bearish in the coming future.  Basically, fundamental analysis is meant for long term investments and not for day trading or short term investment.  So, traders planning to invest for long term in share market must go for fundamental analysis.

Good fundamental companies always give good results and good returns for share holders in long term.