How to Play the Stock Market Using Fundamental Analysis

Fundamental analysis is one of the ways that you can play the stock market. It is not as much as chart watch as know what is going on in the market today.

Difficulty: Moderate

Instructions

1. Know what's going on.
   Stay current in politics and the news. Fundamental analysis is using what you know that is going on applying it to the stock market. For example, high gas prices caused UAUA (airline company) stock to plummet. By knowing how expensive gas is, you can tell it will cut into their revenue.

2. Stay current.
   You need to know what is going on all the time, 10 minutes in the stock market can change everything completely. So if you have your money invested in a stock (especially short term) be sure to watch what is going on with it.

3. Anything can happen.
   Even though things can be going your way, a breaking story could change the direction of the stock. Analysts were estimating a lower earnings for Google, but when Google beat the earnings, it cause the stock to raise over 80 dollars a share overnight.

4. Apply what you know.
   If there is an industry that you know a lot about, try investing in that. It always helps if you know what the industry does and how they make money compared to making an investment blindly.

5. If you would like more information be sure to click Related Articles on this page, for links to similar ehow articles.