When you start to invest in the stock market, it is absolutely essential to analyze stock market trends. These will let you know which companies are doing well, which types of companies are doing well, as well as a host of other information.
You should never just guess at how well a stock will do. You would be surprised to find out how many people base their stock trading decisions on a hunch or feeling. While that may work well for some people, you'll have a lot more success if you analyze stock market trends.
If you've heard of the term "bear market" before, you need to know that refers to declining markets.
It may or may not be a wise decision for you to enter a bear market. The stocks may be very low, but it can be hard to tell which will do well in the long term and which will just keep going down.
The other side of the coin is a bull market. This means that the market as a whole is growing at a great pace. Entering early in a bull market may mean that you really come out ahead with some profits.
To understand stock market trends, you need to know all about price and volume. The price is of course the price of stocks. The volume is the amount being traded.
It is in a bull market that people usually consider starting to purchase stocks. Another thing to look for is when prices are low and there is high volume. That usually means that investors are trying to dump the stock as fast as they can.
In addition to analyzing the market as a whole, you need to look at individual trends as well. You may see that a company has a very steady performance. The price and volume may remain fairly consistent.
Other companies have either an increasing or decreasing price or volume. Use the same skills you've developed in looking at the stock market as a whole to understand it on a more case-by-case basis.
There is no magic dust that will tell you which stock market trends signal a good stock or group of stocks to invest in.
Part of the fun is seeing how much money you can potentially gain, while having that ever-present risk that you could lose your money.