Wednesday, 1 April 2015

Truth behind share market trend indicator

In this article, we will see what is the real truth behind share market trend indicators. If you don't know about share market indicators then just Google keyword "share market indicators"  and you will find lot of useful stuff. In short, share market indicator are trend based indicator. They provide some idea of whether price of share will rise or fall. I have came across many colleagues and friends who had been telling me the indicator in the share market are very crucial. Share market price is based on three important things, 
  • Profit and loss of company (demand and supply)
  • Technical anaylsis
  • Fundamental news
These days, many broker firms provide technical tools to generate graph and chart for stock so that investors can get clear picture of whether price of share is falling or rising. These technical tools although provide some clear picture of the fall and rise in share price but they do not guarantee.  So the truth is, you can only use them for your decision making process. After technical tools has generate charts, it is up to investors whether to go for BUY or SELL. Just a like whether forecast gives a picture of upcoming nature's behavior, similarly in share market technical tools provides  forecast of share price. Likely, forecast may become incorrect due to sudden fundamental news. 

So in a nutshell, investors can use technical tools or charting tools to get the forecast of the share price. Investors can keep them for BUY or SELL decisions. However investors should not fully dependent on them as forecasts may go wrong.



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