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Identifying Trends in the Stock Market
by Trevor Marshall
Published on this site: October 19th, 2006 - See
more articles from this month
- Prediction of the future
Real Pyschics would, without a doubt, help people investing in stocks.
Much of investorsâ and brokersâ time is spent trying to
predict what the market will do in the next few days to months. However,
the process is not all speculative guessing. If one pays close attention,
the market will actually indicate which way it is going. Knowing about
predicting the market can greatly benefit anyone.
- Direction of market
You can see how a stock might do by studying the market. Looking
at the overall direction of the market will tell you about future trends.
Most, if not all, stocks move with the market. If the stock market is
experience a period of growth (a bull market) most stocks will steadily
grow. If the stock market is in a decline (a bear market) most stocks
will slowly lose value. There may be one day bumps here and there but the general trend
will follow the flow of the market at large. To determine the direction
of the market only two pieces of information are needed; price and volume.
Price refers to the trend of prices of stocks. Volume refers to the
amount of stocks being traded. When these two figures are put together
it reveals whether there are more sellers in the market or there are more
buyers.
- Setting prices
To determine price, investors and brokers use the big three indicators:
the Dow Jones Index, the S & P 500 and the NASDAQ. These indicators
help investors and brokers determine whether the market is going to
continue in the current trend or reverse course.
- Discovering volume
The daily sales volume of the markets are frequently used to set understand
volume. The daily sales volume is easily obtained from several websites
online. If the market has experienced a high-volume day and prices are
up (on the three indexes) then the market is up. Huge investors will
frequently buy and boost markets under certain conditions.
Trevor Marshall: For more great stock market related articles and
resources check out http://weknowinvestments.info
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