What is fundamental analysis?

Fundamental Analysis Explained

Fundamental analysis is a way to understand why markets move by looking at real-world drivers: economics, policy decisions, news, and supply and demand.

It’s not just for stocks. Traders use fundamentals across stocks, forex, crypto, commodities, indices, and ETFs.

Macro & Economics (Market-Wide Drivers)

• Interest rates and central bank decisions (how “expensive” money is)
• Inflation and growth data (how the economy is doing)
• Jobs and consumer demand (spending and business activity)
• Risk sentiment (when markets move into “risk-on” or “risk-off” mode)

News, Policy, and Politics

Markets reprice quickly when new information changes expectations.

• Geopolitical headlines (conflict, sanctions, diplomacy)
• Government policy (taxes, regulation, trade announcements)
• Major events and surprises (elections, sudden policy shifts, emergency decisions)

Supply & Demand (Especially Important for Commodities and Crypto)

• Production changes and inventories (supply shocks)
• Seasonality and logistics (shipping, weather, bottlenecks)
• Adoption trends and market structure (who is buying/selling and why)

Company Fundamentals (Mostly for Stocks)

For stocks, fundamentals often mean a company’s business performance and valuation.

• Revenue and earnings growth
• Profit margins and cost structure
• Debt and financial stability
• Valuation metrics (for example: P/E ratio)

How Traders Combine Fundamentals and Charts

A common approach is:

• Use fundamentals to understand the story (what’s driving the move)
• Use technical analysis to plan the execution (entries, exits, risk)

In Trading Game, Daily Mission market news highlights important market events (including major price moves), and the in-app Academy teaches how to use and combine these tools.