Exclusive: The Trend of Stocks
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| The Trend of Stocks |
A general direction or a precise direction? What would you prefer? Well, trends of stocks have long been gauged to render trading easier. Trends are normally an indication of a general direction or a way of generating an array of predictable trading outcomes. BigOption welcomes you in the world of trend of stocks for a better binary options stock trading experience. Get in.
Tackling stock trading have long been the hurdle of many traders since they want to make consistent money in binary options. But to be able to make consistent money all the time demands more knowledge and a deeper analysis. Yes, I may tell you that a trend is a general direction, but what do you do with that information? How do you actually analyze this trend? The answers are not simple, but once you grasp them, more doors to making incredible earnings will be opened. There are several characteristics that make up one single trend and in this article, the aim is to get you known to these characteristics and the attributions of trends of stocks. You will also be taken deeper into the subject of stock trading, trend of stocks and quality of stocks. Traders will also be introduced to Blue-chip stocks in this blog.
Stock trading, a delicate issue?
Stock trading is a delicate issue. Without proper knowledge on a particular stock, trading on it will be a mistake. Easy to say, CALL on eBay stock today or PUT this stock! But actually if some time is dedicated to research and analysis, a better job here can be done. For example, during the whole month of April, earnings season were the headlines. Earnings season refers to whereby a company releases its quarterly earnings, based on which, the company’s actual worth and health will be analyzed. The company itself stands as a stock on a market. It can be traded as an individual stock or the stock may also / or at the same time be a component of an Index traded worldwide.
What happens is, the higher a stock’s earnings are, the more value it gets. And as a component of an Index, a performing stock adds more value to the whole index.
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| Performing Stocks |
A stock evaluation will have considerable impacts on both the stock and the broader index on which the stock is quoted. As a result, this news will have a much larger impact in binary options, than most traders think. In the event of a quarterly earning report, markets will tend to become highly volatile ahead and following the data release as well. The same news can generate effects that may last around a week in binary options. So if you, as a trader see that ebay got higher quarterly earnings, it is obvious that you place a CALL option on the stock, or a PUT option. In the same way, eBay being enlisted as a component on NASDAQ, may also turn out bullish for the Index. Thus, if the NASDAQ goes up, a CALL option is mandatory else a PUT option is obvious. Right?
Trends of Stock Trading
Wake up traders! We are in the world of binary options and this field has evolved so much that trends are an obvious help to generate high quality trading predictions. A most simple and easy way of comprehending stock trading trend is:
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| Stock trending |
Normally stocks trend around 30 percent in a whole session, either on fundamental or economic cues. The rest of the trading session, a stock normally moves sideways in trading ranges. A normal trading range looks like this:
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| Normal Trending |
KISS: Keep it simple stupid! I'm sure you heard of that. I have too, for many years before I do understand the basics, instead of looking for complicated things. Sticking with trends is required while trading stocks. Hear-say information will not help you here, as many intermediate and advanced traders in binary options need more than just a piece of information.
Top Technical Indicators that can be used
If traders prefer to use top technical indicators in order to gauge trends of stocks, three technical indicators can be suggested:
- Moving - Average
- MACD
- Parabolic Sar
All these 3 technical indicators can be found on BigOption’s Blog.
Traders should keep their trading psychology in line with risk management, so that they use these technical indicators to increase high-end gains instead of running into losses.
Macro Trend and its Advantages
TimeFrame
What does a trader need to focus on? Many will say money, some will say outcome, others may say trading tools, but very few give importance to timeframe. While putting a stock at stake in binary options, timeframe is important to verify. Choosing time, is simple but choosing the right time requires verification of time frames.
Trends classification comes into 3 segments, notably:
- Primary
- Intermediate
- Short-term
It is important to consider timeframes so as to be in-the-money. The best way to multiply your gains is to give importance to powerful time trends, as many traders tend to ignore these, by laying more attention on different time frames that appear simultaneously.
In Primary markets, bull and bear hold more importance, as the trends may vary from time to time, by looking at the uptrend or downtrend of a particular stock. These trends can be constantly verified over longer periods of time and may generate effects that may last longer or shorter depending on the trend. But any reaction to the market, might signal a bullish or bearish trend anytime.
In Intermediate and long-term trend markets, more importance is given to actual health of an economy. Investors and analysts focus on the sudden news or event that may come and add spark to stock trading or may also provoke a downtrend. Sudden turnarounds create rallies to which timeframes are subjective. Everything here depends on how trends are interpreted in such a volatile market. While, intermediate markets get hooked on news and on the other hand long-term market get mostly involved with technical analysis, as mentioned above. Use of technical indicators can help to determine trading outcomes of a particular stock in binary options.
Macro trends
All timeframes should be in line with macro trends. By positioning yourself in the same line of the market will help increase winning chances. Macro trends are global trends which may have significant future impacts on the sectors of activity belonging to a company that should be of interest to us traders. These trends exist in a general level in the whole economy rather than concentrating on a particular sector. Trends in data releases such as, domestic product, inflation, employment, spending, monetary and fiscal policies. Most important in stock trading will be the quarterly earnings.
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| Stock Measuring |
Measuring a Stock’s share price is utterly necessary and determining the changing trends determined by the stock’s points is what matters on a stock chart.
An exclusive tour inside Blue-Chip Stock
Apart from just analyzing, many traders have difficulty in redeeming higher gains just because they cannot differentiate between stocks. Blue-chip stocks are a vital part of stock trading since they comprise of influential stocks.
JPMorgan chase & co, Intel, Wal-Mart and IBM form part of the currently highest ranked stocks. Of course there are many other stocks that exist alongside these, which have higher payouts or better quarter earnings for sure, but most of them are not around since long and have a lot to prove yet. Many of these new companies, are also subject to a short life on the market since it is difficult for them to affirm their superiority amongst gigantic companies. However, I am not telling you not to trust them, they are good trading source, but blue-chip stocks stand apart.
Blue-chip stocks have long been on the market, have proved their supremacy and have continued to operate on the market for several years in a row. These stocks possess market capitalization in the billions and are leaders in their industry. Basically these companies are established and mature. These are types of companies that pay regular dividends that often increase on a yearly basis. Some companies really stood out of the box by paying dividends for over 20 years in a row! These companies are good source of trust, but they are not fully immune from market downturns like the Lehman Brothers chain of companies.
The Bottom line
Now that you have been introduced to blue-chip stocks, make sure you do trade on one of them, but by keeping in mind the trend of stocks. Whether you opt for a primary, an intermediate or a long-term market trend, you are advised to follow the guidelines given in this article. Make use of the trends of stocks or technical indicators to achieve your desired trading outcome in binary options stock trading.
