Forecasting the Stock Market

[Dakota Connors]

Those who promise you the moon within six months, by trying to
convince that such and such share will double, are available in ample
numbers in the share market. The reality is no one knows the future
trends of the market. Researcher on shares does not know; the analyst
does not know. They do routine efforts, which provide you some
indications of the possible trends relating to a share. Several
factors impact the market simultaneously. Take it as a joke if someone
claims that he can read the market trends accurately and he has to his
credit several such predictions in the past. The gentleman would not
have been in the advising business, if he really possessed the
sterling abilities on share price predictions.
There are exceptions but will you be able to identify them amongst the
thousands of shares listed in a stock exchange? In New York Exchange
for example only 0.5% of companies are likely to double this year.
Every broker desires to earn commission and that comes from his
clients. There is nothing wrong in it. But always take care whether
your broker is only interested in earning commissions? Such brokers
make tall promises only to lure the new investors, but their
reputation will be in jeopardy soon, and the first dealing of a client
will be the last dealing as well.
You need to know one important aspect about the market. There is
nothing secret about the price of a share. One, who claims to know
something extraordinary about the share that will result in its fast
growth, is again up to a sales trick. The news about anything that
affects the price of a share spreads very fast in the market and one
can never be the exclusive owner of such information.
You are in the share trade for earning profits, and probably fast
profits. Intentions are good, but in the market everyone can not
aspire for profits only, at all times. Having decided about the
capital that you are willing to invest in the market, give a cool
consideration to the percentage of losses that you are willing to
suffer. It can be as low as 2% but it should never exceed 10%. Some
losses are acceptable, but you must devise foolproof steps, provide
stop loss limits to the shares in your portfolio, so that your capital
is in tact.
To be a winner you need not forecast; you are not a professional
astrologer. Like a true businessman, like an astute economist, try to
read the trends and the mood of the market. If the market is volatile,
try to guess why it is so! Do not curse the market, if it does not
behave as per your expectations. Share market is known to defy all set
rules, and move according to its indefinable trends. Therefore, it is
known as stock exchange, and not a rocket science laboratory! You need
to approach the market with the spirit of co-operation, not
confrontation.
A new entrant to the share exchange must know that the market has the
positive and negative aspects. Every business has it. But the common
feeling is that it is easy to make money through trading in shares.
The internet has made this concept even more acceptable, because you
do not need the exclusive premises and the staff that is required to
run business establishments. Your fingers need to be trained how to
click computer buttons well and in time! For a day trader, the balance
sheet is available at the end of the day. You are either elated or
frustrated.
For winning in share trades, know the fundamentals of the game first.
Forget about forecasts. You can always learn gradually by experience.
Cultivate discipline right from the word go, and soon you will develop
the expertise required for profitable trades!

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