Fundamental analysis is a methodology for analysis of a business as a viable stock that you should hold for long term. Fundamental analysis is far more widespread within the world of investing because you are going to hold your companies for ten to twenty years.
You don't wish that your companies go bankrupt the next day. Some of the typical ratios applied are P/E ratios (price earnings ratios) that measures the relative cost of the stock to the earnings of the company, the EPS (earnings per share), the debt equity ratio and tons of other ratios.
Even though I've spent considerable time studying such ratios I discovered that you do not actually have to have such info to be profitable in day trading.
I recommend trading ETFs (exchange traded funds) such as QQQQ which mirrors the activity of the NASDAQ 100. In essence, you're actually trading the index like a normal stock. Indexes normally have an enormous number of stocks in them, making them much less susceptible to business specific news.
If you're in debt or experiencing corporate bankruptcy and are seeking to raise your funds, educate yourself on nasdaq rules, nasdaq companies, as well as nasdaq listing requirements.
There is no lack of information and no end to analysis. Being able to eliminate fundamental analysis from the decision making method is among the reasons why I suggest trading Emini index futures.
Paper Trading: Don't Ever Underestimate it!
Paper trading describes trading with virtual money. You don't use real funds. You jot down in your notebook when you bought at what price and why. Whenever you sell, you record in your notebook once more, why you sold and calculate the profit or loss related with the trade.
Even though there's very little difference between paper trading and actual trading in Emini, actual trading is subjected to slippage and psychological factors come into play when you're working with real funds.
Don't underestimate the impact of psychological elements on your trading. Right after you've got a reasonable method and money management methods, it's the psychological elements which will establish whether you make a profit or loss.
Some traders have produced software to paper trade. The software will record down the time, price, symbol and the position opened or closed. This will save you the trouble of trying to keep a paper record.
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