How Important are Fundamentals?

Fundamentals matter – but not in the way many traders think. Brian doesn’t use fundamentals to predict price. He uses them to understand what might be influencing market psychology. Price is still the final decision-maker.

Fundamentals and psychology

Each morning, Brian reviews headlines not to form opinions, but to understand what information participants are reacting to. • Headlines shape expectations and sentiment • Earnings and revenue growth attract attention • Awareness helps explain why certain stocks are in focus Fundamentals help explain interest, not direction.

Technicals and fundamentals serve a similar role

Both fundamentals and technicals answer the same question: what should I be paying attention to? • Fundamentals highlight where participation may increase • Technicals show where buyers and sellers are actually acting • Neither is a buy signal on its own They provide awareness – not instructions.

Important note

Strong fundamentals can attract a large group of participants, but that doesn’t guarantee higher prices. Interest does not equal upside.

Why price still comes first

Brian applies the same discipline to fundamentals as he does to indicators like VWAP. • A stock pulling back to VWAP is interesting, not actionable • A strong earnings report is notable, not a buy trigger • Price confirmation is always required Nothing is bought just because it touches a “magic number.”

Caution

Trading based solely on good news or strong fundamentals often leads to poor timing. Markets frequently price in information long before it becomes obvious.

The takeaway

• Fundamentals shape psychology, not price • Awareness matters more than opinions • Participation does not guarantee direction • Price action always has the final word Fundamentals tell you what to watch. Price tells you what to do.