How to predict a market trend?

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July 17, 2017
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A triangle with a role-play
July 31, 2017

How to predict a market trend?

How to predict a market trend?

Like all businesses, the stock market operates on a system of supply and demand. Speculating on the price movement of an instrument can bring us both benefits and losses. All clear up here, except the fact that things get complicated when you are about to press the SELL or BUY  button. Detailed researches, technical and fundamental analysis and a lot of other measurement instruments are used by investors all over the world in order to predict market trends. Indeed, the information is crucial for a successful experience in online trading! But in this article I want to point you where to look for the elementary data before taking a Sell or a Buy decision.

The price determinants

There are many factors that determine whether stock prices rise or fall. These include the media, the opinions of well-known investors, traders, natural disasters, political and social unrest, risk, supply and demand, and the lack of our abundance of suitable alternatives. The compilation of these factors, plus all relevant information that has been disseminated, creates a certain type of sentiment – bullish and bearish – and a corresponding number of buyers and sellers. If there are more sellers than buyers, stock prices will tend to fall. Conversely, when there are more buyers than sellers, stock prices tend to rise.

Narrow search – collect your data
  • Trading on Forex

Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per day, representing a less than 1% change in the value of the currency. However, for a more accurate trend prediction search for news in the political area of both currencies that you trade and their behave to one another. Analyse and compare the economical indicators such as Inflation, Gross domestic product (GDP), Unemployment rate, Occupied population rate – all of them can provide you a pretty good prediction about the pair of currencies you trade.

  • Trading on commodities

As you know from our educational videos, commodities are basic goods grouped in 3 categories: energy, cereals and metals. Depending on what commodities category you trade, search your information in its area of interest. In the “energy” field, look for international political news which refers to global suppliers for this kind of goods, the international organizations that control the overall production and the tensions that might appear between suppliers and importing countries. For cereals, check the past and future weather forecasts, it reveals a valuable info about the harvests which will influence the supply and the demand. Metals are considered to be safe havens investments about which we have discussed in this article. Here you have to pay attention on market turbulence, economic crisis and other financial damaging phenomena.

  • Trading stocks and indices

Whereas indices represent a stock basket grouped by its performance in a certain country or an industry, making predictions on stocks or indices imply the same data research. Start by looking for the quarterly financial reports, you will be impressed how much it can help you. The revenues, the expenditures, numbers of sales, production and other such indicators can basically draw the future trend of a stock. Stay informed about strategic moves initiated by the company – they are looking to expand, to large their audience, to launch a new product or to clear the stock of unsold products? – Yes, all these will affect the upcoming trend.

Stay informed and make use of valuable data – the market creates opportunities and it can turn into your ally!

Article author: Adrian Mazilu -trade.Berry community founding member

Article co-writer: Renata Cheptene

1 Comment

  1. Clint says:

    Appreciate this post and I find it very useful!

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