Posted by forex at 6:30 AM
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1.
The government is a reliable source for economic statistics
Find reliable market statistics sources. Large institutional investors often provide a portion of their research and statistics to the public for free. Government websites also release many important market numbers and figures. Some key economic and stock market statistics are interest rates, market volatility, unemployment ratios and the amount of stocks rising versus falling.
2. Investigate how each statistic influences the market. For instance, lowered interest rates often stimulate the economy, while raising the rate may help curb inflation. Amazon carries numerous books specializing in economic and market indicators. Focused websites, such as Investopedia and Stock Charts, also provide tutorials on stock market indicator interpretation.
3.
A stock index can easily be analyzed on a price chart
Analyze a stock index. Large baskets of stocks arranged in an index correlate strongly to the market they represent. Statistical information derived from an index can provide implications for the broader market. Two common stock indexes in the United States are the S&P 500 and the Dow Jones Industrial Average. If certain statistics indicate that the S&P 500 index will go up, the market of quality stocks it represents will likely go up also.
4.
Technical indicators are like signs on a street helping with directions
Utilize market-based technical indicators. Some common tools are the advance/decline index, absolute breadth index, arms index and the McClellan oscillator. These indicators help you determine market volatility, the ratio of advancing stocks to declining ones and the amount of volume flowing into both rising and falling stocks.
5.
Many stock market strategy guides utilize broad statistics
Learn a strategy that links market indicators to buying and selling rules. Many stock systems are based on overall market sentiment, such as William O'Neil's book,'How to Make Money in Stocks: A Winning System in Good Times or Bad.' Market indicator analysis uses broad statistics to suggest trades. Therefore, choosing strategies that are based on broad ideals such as long-term trends are often suited to market statistics analysis.
6. Use alternative charting formats such as point and figure. Point and figure charts remove the time factor. While this may be viewed as a restraint by some, others find it removes distraction for broad market analysis. Some market analysts use the point and figure chart to determine how many stocks are over their 50-day moving average or 200-day moving average and to discover the bullish percent index.