DEFINITION of 'Fourier Analysis'
A type of mathematical analysis that attempts to identify patterns or cycles in a time series data set which has already been normalized. By first removing any effects of trends or other complicating factors from the data set, the effects of periodic cycles or patterns can be identified more accurately, leaving the analyst with a good estimate of the direction that the data under analysis will take in the future. Named after the nineteenthcentury French mathematician and physicist Joseph Fourier.
BREAKING DOWN 'Fourier Analysis'
This type of analysis may sound complex, but it actually makes good sense. For example, suppose a manufacturing company wanted to know what stage of its price cycle its main raw material was in. Because inflation would constantly be increasing the dollar price of the commodity over time, an analyst would remove the effects of inflation from the commodity's historical prices first. Once inflation was controlled for, the analyst would then have a much more accurate picture of the price cycles experienced by the commodity.

Business Cycle
The fluctuations in economic activity that an economy experiences ... 
Inflation
The rate at which the general level of prices for goods and services ... 
Detrend
In forecasting models, the process of removing the effects of ... 
Econometrics
The application of statistical and mathematical theories to economics ... 
Cyclical Industry
A type of an industry that is sensitive to the business cycle, ... 
Forecasting
The use of historic data to determine the direction of future ...

Active Trading Fundamentals
Capitalizing On Seasonal Effects
We show you how to take advantage of periodic trends in the equity markets. 
Active Trading
Market Cycles: The Key To Maximum Returns
You need to understand the various phases of the market cycle to avoid bubbles and make the best investments. 
Active Trading Fundamentals
DMI Points The Way To Profits
The directional movement index tells you whether to go long, short or stand aside. 
Economics
Understanding Game Theory
Game theory is a model for making decisions that weighs the benefits of a choice along with the interaction between participants. 
Investing
How to Prepare for the Low Return Environment Ahead
Learn about the big takeaway from this week’s chart: Investors aiming for higher returns over the next five years should be prepared to stomach more volatility. 
Economics
Understanding Imperfect Competition
Imperfect competition appears in several different forms. Markets are evaluated by how they compare to, and try to approach, perfect competition. 
Investing
What Happens to Bond ETFs in Stressed Markets?
We are going to dive a little deeper today at how bond exchange traded funds (ETFs) fare when the markets are stressed. 
Active Trading Fundamentals
SandRidge's 3 Key Financial Ratios (SDOC)
Learn more about SandRidge Energy, Inc., a history of the company's performance and financial stability through key financial ratios and its future outlook. 
Economics
A Statistic About the U.S. Economy that May Surprise You
Learn why many commentators seem to be pessimistically focused on the U.S. economy’s weak wage growth and manufacturing sector trouble. 
Economics
The Current Probability of President Donald Trump
Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.

What is finance?
"Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Answer >> 
What is the difference between positive and normative economics?
Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic ... Read Answer >> 
Do plane tickets get cheaper closer to the date of departure?
Read about when to buy flights. See how statistics can predict optimal pricing. Read about price volatility over time. Learn ... Read Answer >> 
Is Colombia an emerging market economy?
Learn the definition of an emerging market economy, and understand how Colombia, while not yet developed, meets the standards ... Read Answer >> 
What assumptions are made when conducting a ttest?
Learn what a ttest is, and discover the five standard assumptions that are made regarding the validity of sampling and data ... Read Answer >> 
What is the utility function and how is it calculated?
Learn what the utility function is in microeconomic theory and how it is calculated based on a functional form that represents ... Read Answer >>