The top-down approach to fundamental analysis begins by considering the health of the overall economy. It looks at macroeconomic factors such as GDP, interest rates, and inflation levels to determine the overall direction the economy is heading in. It then moves down to look at the sectors and industries within the economy that are performing best, and offering the best trading opportunities. Alternatively, a trader can use the bottom-up approach to fundamental analysis, which starts by looking at individual stocks or assets, and works up to the broader sector and then to the overall economy. Bottom-up analysis is more focused on the microeconomic factors that can impact on markets.