The stock market is accessible to everyone, but ending your trades with a stream of profit calls for you to know the influences behind stock prices. Your terminology of “shorting and longing” can establish working criteria, but the influences, which are the reasons why markets move, should be the core factors that you make trading decisions with.
Consider the following influences within stocks today:
Accounting best describes the work of collecting any data that “fundamentally“ influences the stock market. Fundamentals, as they relate to stocks, are data points that can be measured as tangible resources, supplies, and balances, but inflation can influence stock markets as well as economic conditions. We include unemployment and interest rates within fundamental analysis also.
Chaos is a common pattern in how stock prices move.
Volatility can strike the markets at any time and drastically change prices from the prior trajectory they were on. A random shift in stock prices can be beneficial, but it tends to be costly in most cases. Through the volatility, investors will assume that one thing is happening in stocks only to see big changes in different directions.
Ever since the crowded floors of Wall Street have faded into extinction, we all must analyze stocks but through charts. The trading floors once put investors face to face, which enabled stock traders to see the w and hidden ideas that others had. In 2020, the influences that change prices have to be analyzed with chart analysis if you want to firmly stand your ground as an investor.
The banks and institutions of the financial world keep a close watch on the stock market and, with massive funding, are able to raise or lower prices at will. Knowing who the big investors in stocks help you to devise a real plan of action by using institutional patterns as reliable setups.
Investors who don’t track institutional investing will find themselves emotionally caught in false rallies.
The major forces behind the stock market are difficult to see with your eyes, so you need to think conceptually as you look for what’s influencing live prices. Rarely is there one factor that guides stocks; be versatile in measuring prices.