How To Do A Competitive Analysis Of Trading.
                     HOW TO DO A COMPETITIVE  
ANALYSIS OF TRADING
Introduction
• Traders who use fundamental analysis to perform a stock evaluation review data 
related to the current economic environment, the company's financial health, and 
the company's competitors.
Source: Investopedia.com
The Mechanics of Fundamental Trading
• The fundamental approach for valuing a company is based on an in-depth study of the 
economy, the industry in which the company operates, and the company itself. 
• The trader uses the data from this analysis to forecast market developments and to determine 
the intrinsic value of the company's stock.
Source: Investopedia.com
Future Valuation
• The trader can also use fundamental analysis as a tool to help predict the future value of the 
stock and to determine if the stock is overvalued or undervalued. 
• A successful analysis can uncover investment opportunities not yet recognized by the market as 
a whole and can assist the trader in making a profitable investment.
Source: Investopedia.com
Passive Portfolio Strategy
• A strategy that involves minimal expectation input, and instead relies on diversification to 
match the performance of some market index. 
• A passive strategy assumes that the marketplace will reflect all available information in the price 
paid for securities
Source: management.ind.in
Active Portfolio Strategy
• A strategy that uses available information and forecasting techniques to seek a 
better performance than a portfolio that is simply diversified broadly.
Source: management.ind.in
FUNDAMENTAL ANALYSIS FOR TRADERS
Established Stocks
• Established companies, mutual funds, and other large financial organizations make 
big moves in the financial markets and can act as portfolio builders for investors. 
In this case, a trader's profit will act as compensation for the risks taken.
Source: Investopedia.com
Initial Public Offerings
• An initial public offering (IPO) can provide traders with an opportunity to cash in 
on the discrepancy between the IPO price of the stock and the price at which it 
will eventually settle. 
Source: Investopedia.com
Special Considerations
• Fundamental analysis is generally not used as a tactical, short-term decision-making method. 
• Technical analysis enables traders to gain a vision of the market and make the right move at the 
right time, while fundamental analysis should be applied strategically, over longer periods.
Source: Investopedia.com
Conclusion
• Competitive analysis helps a trader obtain information about the overall state of the market and 
attractiveness of a specific security as compared to other securities.
• However, some investors prefer to use technical analysis to pinpoint when and how to react to 
the information derived through fundamental analysis.
Source: Investopedia.com