How to predict stock market ?

Learn Stock Trading - Why it is Impossible to Predict Stock Prices!

One of the most important points in your stock education should be that if you try and predict stock prices you are 100% guaranteed to lose. The reason is obvious yet more novice traders make this mistake than any other - yet you don't have to predict to win let me explain why ...

Predicting is simply another word for hoping or guessing and that will not make you money in any venture in life and certainly not stock trading.

Let's first dispel the myth of prediction and then explain what you really have to do to win.

Why Predicting Stock is as Accurate as Your Horoscope

There is a huge industry in guru's who tell you they can predict market tops and bottoms and that markets move to a scientific repetitive pattern and pedal ridiculous theories based upon Gann, Elliot wave or Fibonacci numbers.

They all lose and its again common sense why markets don't move to a scientific law.

Why Donâ€™t they?

Because if they did, we would all know the price in advance and there would be no market - a market by its very nature moves on uncertainty. !!!

Also if their was a scientific theory that applied to stock trading whoever had it, would not need to sell it to you, as they would be making to much money!

How to Win ??

The way to enjoy stock trading success is not to attempt to predict - but to act on the reality of the price change.

Let me give you an example that will make this clearer.

Let's say you see a stock coming into test major support and you think it's going to hold.

You do not simply execute a trading signal into the level of support - you WAIT.

You wait for support to hold and prices to turn away from the level - supported by price momentum.

Using Momentum

If you don't know anything about momentum indicators, then make them an essential part of your stock education.

These momentum oscillators will help you confirm changes in price momentum and allow you to see visually when price is strengthening away from support. You may say I will miss the turn and sure you will - but you don't know its going to turn in advance!

There is an old saying:

"A bottom picker becomes a cotton picker"

And its right, try and predict market lows or highs and you will end up losing your trading account equity.

Great momentum indicators to use are:

The Stochastic, RSI, ADX etc - we don't have time to cover them here, just look them up in internet.

They are excellent indicators and will get the odds in your favor.

This is what stock trading is a game of odds - NOT certainties.

Don't let that worry you though if you can trade the odds you can make a lot of money.

If You Want To Win

Trading is not about trying to be clever and catching the exact turn, know one can do that - so don't try.

Trading has one aim making money and don't worry if you could catch just 60% of all the major trends you would be very rich.

If you learn stock trading the right way and get the right stock education you will now know you need to to act on the reality of price change, use momentum indicators to get the odds in your favour and if you do, your stock trading profits will soar.
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Courtesy: Monica Hendrix
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