Hey everyone today we're gonna be talking about fundamentals versus technicals and we're pretty much going to focus most of the video on fundamentals. but I need to kind of break down the delineation with the two, so welcome everyone! I Am lead trainer with stocks trade Tim Bowen And when we talk about fundamentals and technicals, kind of get some terms out of the way here. Uh, fundamentals are like the business, the financials The Profit the loss, the earnings per share, forward-looking projections more of like the data and the reason I Want to mention technicals? And by the way, definitely check out the rest of the channel. We have a ton of technical analysis uh, videos and tutorials Etc So but I need to explain technicals because people get kind of confused between the two.

and when we say technicals, we're not talking about like the guts of this laptop. What we're talking about is the chart, price, action, technical indicators like moving averages or view app or Bollinger Bands or RSI but really really, just the chart is the technicals. Okay, and when you're talking short-term trading, we care about the fundamentals because we need to know the underlying structure of the move. but typically we're very technical.

uh, based chart based. You'll hear chart patterns, chart patterns, price action. Again, you'll hear these technical indicators, but you have to have an equal balance because you need to know. Listen, if you're charting some stock that's moving for no reason or very dubious reason or is a dilution Target Because dilution goes under the fundamentals as well, you can maybe start seeing things that aren't really there in the chart.

Okay, so that being said, if you're looking for the technical stuff after this video, make sure you watch this one after this one hit the rest of the channel. We've got them all broke down talking about technical analysis. We'll save that for another day. Okay, back to fundamentals.

So fundamentals are all-encompassing but they're many things. Maybe break out a notepad and write these things down right up. Starting with the big picture view, you're going to talk about sector. Okay, many of you have heard about hot sectors at me.

Everyone you talk to in the day trading land, everyone will beg, beg, beg you beg you to focus on hot sectors. And when I say that it could be electric vehicles could be artificial intelligence? You know right now summer 2023, artificial intelligence stocks all over the place. It's the hottest sector. Maybe it's getting pretty close to being the hottest sector I've ever seen.

Maybe weed stocks, you know? maybe? uh uh uh. Psychedelic stocks? Solar stocks? Okay, those are all the sectors. and the reason I talk about is the big picture. You always want to start there like, especially as a new Trader that can only trade a few stocks.

You really really want to stay away from non-hot sector stuff because there's a lot of stocks that move for no reason. And they they move like they move because there is no underlying reason. So now you get into some stock that maybe somebody told you about or you found on your skin and it just does nothing. Okay, we don't want that.

We want big moves so we can grow our account. We can accomplish our goals. So right off the bat, especially if you're under the PDT or you're only able to trade a full-time or trade a few times a week, the biggest thing you need to do is just completely ignore anything that's outside the hot sector and this is an unpopular answer. But if there is no hot sector which typically we only go about a week between sectors.

but if there is no current hot sector, don't trade. I Know people hate that and they don't like that. But as a new Trader with a small account, you have to focus on the best opportunities. No hot sector, no trade.

Next thing we're going to step down and we're going to look at the news. Okay, the news is a fundamental event. so we want hot sectors with current news typically in day trading and it's about a 24 hour to 48 hour news cycle. So if something is old you know, three, four, five, six days old, it's probably an ignore.

But if you've got a press release night before morning of you know, maybe maybe like a Friday afternoon press release and you're trading the stock Monday morning that's what you want to look for, then you're going to kind of look to build that trade idea and what you really like to see now. I Know this is rare in lower priced like true penny stocks, but you will very frequently find stocks that fit this criteria in that five seven, ten dollar range which are still small stocks that you can trade with a small account. And the criteria we're looking for are sales and profitability. And I smile because if you're you know if you've been around Small Cap stats, you know a massive majority of them are not.

Some of them have zero sales or like, you know, a thousand dollars a year, um, or or and and almost all of them have no profits and a significant majority of them lose money. Now that doesn't mean they're in a void. You just need to know what you're trading. And listen with Biotechs.

Understand that Biotech stocks you know are a home run business. Okay, it's it's not. It's not a knock against small cap biotechs. Just when I say a home run business, you invest for years and years and years and years.

and then you launch a Viagra Okay, and you you know you spent five to seven years developing that and now you've got one of the most successful drugs all of all time. That's just the business model so you don't have to worry about that. They don't make any money, but you want to be conscious of the burn rate. Okay, and the reason we're conscious of the burn rate that's how much money they're going through is the faster they go through cash, the more likely they are to do a dilution.

Because we all know that these low price stocks, especially Biotechs, they sell one thing. Write this down. Okay, this is always like an eye-opener It's a new and even intermediate Traders You need to understand. especially Biotechs, but almost all small cap stocks, they sell one thing.

Okay, they're always looking to do that next dilution. Because think about it, if you got no sales, which means you got no profits. how do you pay the rent? How do you pay for r D How do you pay staff? How do you pay the insurance? How do you pay to paint the office to buy new gear? You need money? So they're always dilution targets. So you want to be conscious of that burn rate.

And then look at the Active filings. Now, there's a lot of different ways to look at the Active filings. Check out our other channel. We talk about that a lot.

but um, be conscious of that. earnings per share, All of the cash on hand. So you can look at the burn rate versus cash on hand. and you can kind of time out the likelihood that they're gonna do a stock dilution.

Which remember, dilutions drastically lower the price, because when we talk about stock dilutions, that means there's more shares out there. If there's more shares out there and nothing has changed on the business side, that means the stock price is going to come down. creates great short selling opportunities by the way too. So always start.

The biggest point of this is what you're trying to do is I Always think of it like a funnel. Okay, and you're constantly trying to compress that funnel down to the point where you can find that one or maybe two best opportunities of the day. So write these things out. We're going to start out with hot sectors.

there's no hot sector, there's no trade. Then we're going to focus on stocks with current news 20 to 48 Hours newer the news the better. Okay day. Traders Are very fickle.

Love We love those 8 30 a.m press releases on a stock that we're trading into the market open. You know the news is like an hour old, but then we're going to continue to compress that down. looking for the stocks that ideally have profits, have an actual business aren't dilution targets, and then have those good technical charts and then that creates the highest probability setup. Now one thing I Always want to remind you: listen.

you can focus on all these things and you can put all the ads in your favor and still have a losing trade. That's why you always always have to be diligent on your risk management. Always have a stop loss and always stick to it. But over time good decision making creates profitable trading and the more good decisions you can make, the more discipline you can build.

the more Focus you can build over time the higher your likelihood of success. So I Know this is just a seven minute video or so. so if you want more, keep in mind that we do in the stocks trade daily income to our system. Six live webinars a day every single day starting out at 8 am all the way up until 9 00 PM Eastern Even on weekends and they're 100 free so hopefully you got a good grasp of technicals is fundamentals and understand the idea of how we get down to that Best play.

But these webinars are about an hour, hour and a half a day. much more technical, much more detailed. 100 live too. Listen I Love that you're here on the channel, but obviously this video is pre-recorded You can jump on those live webinars and ask live Q A during the market to really maximize your trading potential.

Thank you.