Fundamental Analysis

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Fundamental Analysis

In this video Ross, from Warrior Trading talks about fundamental analysis when trading. He also explains the differences between fundamental and technical analysis when an active trader is trading. The Lightspeed Trader platform does contain news windows for fundamental analysis so traders can potentially leverage information from news headlines.

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Hey, everyone. Ross here from Warrior Trading. So, I want to talk for a moment about fundamental analysis.

There's sort of two camps when it comes to trading and even short-term investing, and the first camp is in fundamental analysis and the second is in technical analysis. Fundamental analysis is when you're reviewing sort of the fundamentals of a company, and this comes down to reading their earnings reports, reading their press releases, understanding what their balance sheet looks like, what type of debt they're carrying, what their free cashflow looks like, the PE ratio, things like that. Now, this is something that a technical trader might not ever even look at because they're focusing on more of the technical in terms of the chart, the moving averages, and some of the technical indicators.

Now, when it comes to fundamental analysis, one of the things that's nice is that from within your trading platform, you'll see a news window. That news window when you pull up a stock will give you all of the recent headlines, so if you see a stock like Apple ($AAPL) or Facebook ($FB) or whatever the stock may be is up 4% or 5% today, this morning, and you see there's a headline there, it's a good chance that it's the market reacting to that fundamental news catalyst. So fundamental traders are really trying to get a sense of how strong the company is from a financial perspective and what could be coming in terms of upcoming press releases, new contracts, new orders, sales volume, market fluctuations and things like that.

As a short term trader, one of the things that you'll learn is that fundamentals, while they do matter in the long run, in the short term, the market can be irrationally strong or irrationally week despite really good or really poor fundamentals. So, there's sometimes a sort of divergence of what the fundamentals say the stock should do and what it actually does. That's why a lot of short-term traders end up falling more into the camp of technical analysis, while midterm and longer-term traders and investors focus on fundamental analysis. I hope this has helped you, and as usual, any questions, don't hesitate to reach out.


Short Sale Restriction (SSR)

In this video, Ross from Warrior Trading explains the Short Sale Restriction (SSR) rule. This rule was introduced in 2010 and is also referred to as the Alternative Up-Tick Rule. On Lightspeed Trader, Ross explains how to these are notated on the trading platform.

Margin Requirements

In this video Ross, from Warrior Trading talks about margin requirements when online active trading. There are two basic margin requirements - account minimums set by broker when opening an account and the minimum to maintain open positions when trading.


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