Fundamental Analysis - Commodity Market Conditions


Commodity Futures Fundamental Analysis

Fundamental analysis involves research

What is fundamental analysis?

There are two basic approaches to market analysis -- technical analysis (of market data) and fundamental analysis (of market environment). For academics, fundamental analysis is the study of supply and demand forces in the economy. For traders, it is a method to forecast price movements of individual commodities and/or entire markets by looking at economic indicators and government policy, within a business cycle framework. Because there are hundreds of supply and demand forces in effect at any particular time, the fundamental analyst builds economic models to reduce the number of these variables to a few dominant forces. The efficacy of these models is limited only by the analyst's ability to identify dominant factors.

Learn About Fundamental Analysis

As a trader, you will come across many factors that you must consider before entering or exiting the markets. Some of the most important aspects to look for are economic events that can move the markets drastically one way or another.

There are many types of economic events including releases by a governing body, changes in sales or consumption of commodities, and increases in supply and demand. All of these can affect the markets you trade, making it important for you to know how and when these changes are happening.

  • What is Gross Domestic Product (GDP)?
  • About the Retail Sales Report
  • What is the Non-Farm Payroll Report?
  • Understanding Consumer Price Index and Producer Price Index
  • Understanding U.S. Housing Data
  • What is the European Central Bank?
  • Understanding the FOMC Report
  • Understanding the Oil Data Report
  • The Importance of Consumer Confidence Surveys

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