✅ The Importance of Fundamental Analysis in Trading:
1. *Determining Fair Value*
Helps you understand whether the financial asset (stock, currency...) is overvalued or undervalued, and thus make an informed buying or selling decision.
2. *Understanding Long-term Market Trends*
Fundamental analysis focuses on the big picture, making it beneficial for traders and investors in the medium and long term.
3. *Analyzing Companies' Financial Performance*
In stocks, for example, fundamental analysis includes studying financial statements, earnings, debts, and growth plans.
4. *Measuring the Impact of Economic and Political News*
Such as interest rates, inflation, central bank decisions, unemployment... all are factors that move the market.
5. *Reducing Randomness and Emotion*
By relying on factual data, decisions are based on logic and analysis rather than mere rumors or quick movements.
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📌 Example:
If a company announces a 20% increase in its profits, this is a positive indicator from fundamental analysis that may prompt investors to buy the stock.