Fundamental Analysis, News Trading and Global Macro

Fundamental analysis asks what a business is worth and what its results will do to the share price. For a trader it answers practical questions: is this a company that can gap 20% on earnings, is its rally backed by rising profits, and is it cheap or expensive against its peers. This course teaches the accounts from the beginning and then puts them to work in a trading routine.

How do you read a company’s financial statements?

Start with the cash flow statement, then the income statement, then the balance sheet. Cash shows what the business really produced, the income statement shows how it reports its profit, and the balance sheet shows what it owns and owes. The course works through one company’s accounts end to end before you analyze your own.

What are the most useful valuation ratios?

Price to earnings, enterprise value to operating profit and free-cash-flow yield cover most needs. Each is meaningful only against similar companies and the company’s own history. The course has you build a small comparison table in a spreadsheet for a sector of your choice.

How does news trading work?

News trading means taking positions because of new information: a central bank decision, an inflation figure, a company’s results. It is the style where the market moves fastest and where a manual trader is most often on the wrong side of the speed race. This course teaches what can be done by hand, and what should be left alone.

Markets price the expected number before it arrives. When the release comes out, prices move on the difference between the result and that expectation, not on whether the number sounds good. The course has you study past releases in your market so that you know the usual size of the move and how often the first reaction reverses.

What is global macro trading?

Global macro is the style of the large trading desks that position for changes in interest rates, currencies and growth. Its ideas are open to any careful trader, because the inputs are public: central bank statements, economic data and market prices. What separates good macro trading from opinion is a precise view, a sized position and a point where the view is admitted to be wrong.

Trading on views about economies and policy, usually through rates, currencies, equity indices and commodities. A macro trader might expect a central bank to cut faster than markets price, and buy bonds or sell the currency to express it. The course teaches the main links between policy, data and prices, and how to test your own views against them.

Who is this course for?

Stock traders who want to know what they are trading, and anyone who wants to read company accounts with confidence. No programming is needed.

What you will be able to do

• Read an income statement, balance sheet and cash flow statement and explain how they connect.
• Calculate and compare price-to-earnings, enterprise value and free-cash-flow yields across a sector.
• Spot warning signs in earnings quality, such as profits not backed by cash.
• Use fundamental filters to build a watchlist and test whether they improved your simulated trades.
• Read an economic and earnings calendar and rank events by their past effect on your market.
• Explain how central bank policy, inflation and growth move rates, currencies and equity indices.

Syllabus, module by module

1. The income statement

   Revenue, margins, operating profit and earnings per share, and what management can adjust.

2. The balance sheet

   Assets, debt and equity, working capital, and how a company can run out of cash.

3. Cash flow

   Operating cash flow, capital spending, free cash flow and why cash is harder to fake.

4. The calendar

   Central bank decisions, inflation and jobs data, earnings seasons, and where to find the schedule.

5. Central banks

   Policy rates, balance sheets and forward guidance, and how markets price the next move.

What every course contains

Every paid course comes with the first seven and the certificate, whichever level it sits at. The proctored exam and the credential come when the course is taken as part of a Certificate, Diploma or Fellowship. Everything is self-paced: the material is yours to study in any order, at any hour, for the whole of the license.

1. Workbooks. Written to train the thinking patterns and the important concepts of the course, with worked problems and the reasoning behind each answer, so that you learn to think the way the subject is thought.
2. Audio edition. Focused, well-presented recordings with explainers and examples of the material, made to be interesting, relevant and entertaining, so that the general subject can be learned away from the desk.
3. Notes. Pre-produced notes with every fact the course relies on, written out in full, so that nothing has to be transcribed from the films or the audio.
4. Cheat sheet. One sheet with every important learning concept of the course on it, to keep beside you during the work and to revise from before the exam.
5. Named sources. Every fact in the notes names its source, the paper, the book or the dataset, for anyone who wants to dig in further.
6. Explainer films. Focused films, in the style of the sample films on the catalog page, that walk through the most difficult concepts of the course with visual explanations of a high standard.
7. Transcript. A full transcript of every film and every audio recording, searchable and quotable.
8. Proctored exam. Taken as part of a Certificate, Diploma or Fellowship, the course ends in a proctored multiple-choice questionnaire, with a pass mark of 60% and three retakes included. A course taken on its own is assessed by its coursework and has no exam.
9. Verifiable certificate. A certificate of completion that a third party can verify: an employer sends the code on it to the credentials office and receives written confirmation of the course, the date and the result.
10. Credential of the program. The Certificate, Diploma or Fellowship of the program, track or path the course belongs to, awarded when every course in it is passed. Which one depends on the program you choose.

How the certificate is earned

Weekly accounts exercises and two graded problem sets: a full fundamental review of one listed company, and a fundamental watchlist tested against a simulated trading record. On a pass you receive the Course certificate in Fundamental Analysis, News Trading and Global Macro, issued by the Institute with a verification code. A course taken as part of a Certificate, Diploma or Fellowship ends in a proctored online exam with a pass mark of 60%. The fee includes three retakes; each attempt after that carries a reduced proctored exam fee. A course taken on its own is assessed by its coursework and has no exam. Read how certification works.

Before you start

This course assumes the material of the courses below, or the same knowledge gained elsewhere.

• Day Trading for Beginners: Intraday Trading Done Properly
• How to Trade Stocks: Orders, Costs and the Spread