stock market

5 Ways to Predict Stock Behavior

by Josh Biggs in Marketing on 13th October 2021

Fluctuations on the stock market occur regularly. The price of shares of large companies can change every second. It’s influenced by many factors: from the buyers’ demand and SPOs to the international environment and analysts’ forecasts. Experts strive to develop tools with which they can predict market fluctuations. However, so far, there is no one hundred percent effective method. The secret of successful investments lies in constant vigilance and careful following the news. We’ll talk about the main ways of predicting the rise and fall of stocks.

1. Economic Calendar

An economic calendar is a convenient and easy-to-use tool that is useful for both beginners and experienced traders. In simple terms, it is a summary table of indicators for different companies. Any major events in a country and the world (force majeure, big negotiations, speeches of heads of states, etc.) affect the value of shares. By tracking such events using the calendar, you can plan your actions and find out where stocks are at the moment.

2. News

The stock market is very sensitive to important news. For example, there was information that the United States intended to introduce 25% duties on steel imports, and the shares of steel companies fell 3%. In general, the actions of investors when working with the news can be divided into two main stages:

  1. Purchase of shares if there is confidence that the planned event will nevertheless occur (but has not yet taken place). As a result, stocks become more expensive.
  2. Selling the purchased assets at a higher price after the predicted event has taken place.

In this matter, the main thing is to carefully filter the news, since there are lots of them, and develop a professional flair for how this or that information will affect the state of the market.

3. Analysts’ Forecasts

Analysts working for investment banks are involved in predicting stock prices. They monitor macroeconomics, news, and financial indicators, conduct technical analysis and form a forecast for changes in stock prices. The forecasting accuracy of various experts can be different: it is influenced by both the professionalism of a person and force majeure, which cannot be foreseen. Therefore, you should be careful when choosing a landmark.

4. Company Reports

It is essential to understand what is going on inside the company of your choice to stay on top of things and be an informed trader. Representatives of large organizations regularly publish financial reports on their activities (interim quarterly or annual totals) and plans for the coming year. As a rule, they give investors information and news that were not previously known. Experts advise paying particular attention to the official appeals of company heads since they allow us to understand the approximate direction of movement.

5. Trackers

Advanced platforms provide their customers with account trackers that make it easier to track price changes. While they do not exclude the need for your personal involvement, they can help close some gaps due to inattention or inability to cover the entire flow of information. Set up an alert system, and you will immediately know when the price for the selected stock falls below the acceptable value.

Invest Wisely

On any market, there are always some events. And there is the possibility of drowning in the rushing news and missing out on critical economic indicators. That is why you should use several of the most reliable sources of information, stick to your chosen investment strategy, and not give in to emotions if the situation gets out of control. Follow these methods to minimize potential losses rather than maximize profits.

Categories: Marketing