There has never been a more appropriate saying in regards to stock market trends as “history doesn’t repeat, but it does rhyme”. Studying historical stock market trends can give the savvy and smart investor a blueprint to follow as the market trades throughout the year. You must have an understanding of at least the basic stock market trends if you are going to use them to assist you in your trading.

The most important of the stock market trends to learn is analyzing directional movement of the market. When a market moves to the upside, it makes a series of higher highs and higher lows along the way. When a market moves to the downside, it prints a series of lower lows and lower highs. When a market moves sideways, it will often print matching or just arbitrary highs and lows as it fills out a range. Using any stock chart will enable you to recognize these swings and allow you to see for yourself which of the stock market trends the market is currently in.

Next, historical stock market trends such as knowing what months of the year the market performs best can be of great help with your overall planning of trades. While past performance is never indicative of future results, and these historical stock market trends are not perfect, there is a tendency for the market to perform better certain times of the year than others, and whatever the reasons are, history has to be respected. Having a calendar based input as a starting point can get you off to a good start, and can get you oriented in the proper direction before adding other layers to your decision making process.

Certain stocks will move in different stock market trends as they approach news and earnings releases. Always keep a calendar handy with earnings for the companies you follow, while going to their website to find out about conferences they are participating in as well as any developments that are newsworthy and can have an influence on the stocks movement. Be sure to track these thoroughly, and take note of how the stock acts leading
in and out of these events.

Overall, just learning a few of the stock market trends can go a long way to help your trading and investing. You shouldn’t stop at just the basics, but rather take the time to learn more of the stock market trends that help shape the market’s path for this year as well as those to come.
 


10/04/2012 3:05am

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