Fundamental analysis as we all know by now, is the best method of checking out the financial condition of a company. This is easily accomplished by using financial reports, price/earning ratios, incomes, market share, sales and growth, etc.that are available This type of analysis can be very time consuming but I find it well worthwhile the effort that I put into it.

Here are a few factors that I take into consideration when researching a potential stock.

1 Earnings Per Share (EPS) .This shows me the stock’s average short term (recent quarters) and long term (last three years) earnings growth rate actually is.

2 Relative Price Strength (RPS) This measures a stock’s relative price change in the last 12 months in comparison to other equities Iin the Stock market.

3. Sales + Profit Margins + ROE (Return on Equity). This shows you a company's sales growth rate during the last 3 quarters, before and after profit margins and the return on equity.

I personally like to use fundamental ratings for longer term trades such as the ones I plan on weekly charts. This won't be of much help to you if you happen to trade intraday.

Fundamental analysis can be a phenomenal way to build up a list of good solid potential profitable stocks, or as an alternative you can utilise it as a way to filter out the weaker stocks, but that’s about its boundaries. It will not provide you with an objective method to either enter or exit your trades. All of my trading decisions (entry, exit, and stops) are all based on technical analysis. Which we will now take a closer look at below.