Part 3

Running the Numbers: Fundamental Analysis


Add a tool to your toolbox to increase your success rate. Fundamental analysis helps separate securities making substantial moves from ones that are moving due to noise.

Understand the three main parts of a financial statement: the balance sheet, the income statement, and the cash flow statement.

Identify the two main methods of valuation — an absolute valuation model and a relative valuation model — and which to apply as a swing trader.

Determine a few general rules on valuing the market and what to do if the market is raging higher while trading at expensive valuations.

Find out about the two ways that swing traders find securities: top down and bottoms up.

Screen for trading opportunities using a company’s fundamentals.

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