stock price analysis

Download Stock Price Analysis

Post on 15-Apr-2017



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Stock Price Analysis

Stock Price AnalysisBy Stock price analysis lies at the root of profitable stock trading. Stock traders profit from buying stock, selling stock, trading stock options, and trading futures on stocks. Traders profit from the price difference between entering a stock position and exiting. Thus stock price analysis is essential. Long term investing relies upon an analysis of the margin of safety of a stock and intrinsic stock value. However, buying a promising stock that has already run up in stock price can greatly diminish profits. Thus stock price analysis can be as important for the long term investor as it is for the day trader. Both long term investors and traders can profit from the use of Candlestick analysis. This easy to read technical analysis tool allows traders to execute trades with a high statistical probability of success without falling prey to the twin stock market trading demons of fear and greed. Stock price analysis can be carried out with the long view in mind and with an eye towards minute by minute day trading profits. A conservative investor may wish to have a couple of dividend stocks in his stock portfolio. Using stock price analysis he will often buy these stocks when interest rates are high because the stock prices of dividend stocks will commonly be low at these times. When interest rates fall the investor will have the choice of continuing to receive dividends or selling the dividend stock at the now-higher stock price. On the other hand the day trader will commonly use Candlestick stock charts in order to anticipate short and medium term stock price fluctuations. Although the long term investor will commonly prefer a very stable and predictable stock the trader will commonly look for stock volatility and market volatility which picking stocks in search of short term trading profits. It is common for successful investors to use technical analysis tools such as Candlestick patterns in choose if and when to purchase a stock. The long term investor will look for stocks with strong forward looking earnings potential as well as the margin of safety that cash in the bank and unencumbered physical assets represent. However, such stocks are often highly priced as investors are willing to pay for the promise and security that the stock offers. Thus an astute investor will often pass on such otherwise promising stock after seeing its high price to earnings ratio or high price to sales ratio. Here is where tools such as Candlestick pattern formations come to the aid of the long term investor. Even very stable and successful companies see their stock prices fluctuate during stock market crashes, rumors of mergers and acquisitions, or news of a new product coming out from a competitor. By using Candlestick signals for stock price analysis the long term investor will commonly be able to gain market insight during times of high price volatility and successfully purchase the stock in question on a short term correction. Whether one is interested in long term investing or trading for short term profits, stock price analysis with Japanese Candlesticks gives one a high statistical probability of success without the confusion and mistakes that the psychology of trading can bring about.


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