If you are going to dedicate yourself to trading or stock market speculation, you should know that you have from now on different stock market strategies and indicators that can give you many solutions for your needs in the investment sector. With an objective that is beyond any doubt and that is none other than obtaining a return on your savings. For which we are going to offer you some of the main indicators to invest in the stock market in 2019. Especially from these moments in which a somewhat complicated scenario is predicted in the equity financial markets.
These indicators can give you the starting point to enter the equity markets, but also to exit them. With a better adjustment in prices and what can produce in the end that the operations are much more profitable that until now. Being one of the investment strategies that is giving the best results to small and medium investors. Above other more sophisticated systems that require higher learning and without guaranteeing any results in the movements. In other words, through these indicators the risks will be much more limited from now on.
While on the other hand, it is also very important to stress that these indicators that we are going to present can represent when it is time to invest in the stock market. In practice this means that it may be the occasion to enter the financial markets or on the contrary, to wait a few weeks or even months in this kind of operation. Therefore, indicators can have more than one application to relate to the always complex world of money. In a simple, easy way that can help you in your stock investment tasks.
Indicators: Bollinger Bands
We start with one of the most complex that exist at the moment but that offers us high reliability. Because actually what these bands do is determine the bearish and bullish channels of a security. In other words, one of the factors that most interest small and medium investors when entering the equity markets. Not surprisingly, it is responsible for studying the averages in the last trading sessions and may give us a signal about whether or not a good time to open positions in the stock market. Beyond what other parameters tell us in this class of investment strategies.
Likewise, Bollinger Bands are characterized because their analysis is very basic and simple. It is not the perfect system to invest our money, but in return it does not offer many doubts as to its final results. For this reason, it is not surprising that many investors opt for this very special indicator as a formula for incentivize your investments in a more effective and understandable way to your financial capacity. That is, they can be used by all profiles of retailers, even those with less experience in this class of operations.
Moving averages
We are above all a classic of technical analysis and that is seldom not used by small and medium investors. In this case, it is basically a matter of comparing means of different short periods with those of longer periods. Indeed, it is that simple and as a consequence it is very easy and straightforward to interpret. To the point that we will be able to find out in a very short space of time what is the trend presented by the value we are analyzing. Be it one way or the other since there are no class of limitations or restrictions for its correct application.
Of course, moving averages can tell us the entry level in a market value. For example, when the short moving average crosses the long one to the upside. While on the contrary, the sale would result in the counter movement. These are figures that serve as reinforcement to make a decision in the equity markets. Where its degree of reliability is really very high although without reaching the levels of the previous ones. Because in this case it also requires greater knowledge and experience in this kind of movements in the stock market.
Stochastic, practical figure
This is one of the figures that can best serve us for our actions on the stock market because it reflects the real state of the stock market values. But it is in the change of trend where its usefulness is clearer, to detect the exchange from bullish to bearish positions or vice versa. Since it offers you the guidelines on what you have to do from those moments. While on the other hand, it also provides the added value that it can also represent the moving average of the first days in the price. From this point of view, it can help you to configure a portfolio of securities with a potential for appreciation more than remarkable.
On the other hand, it is one of the most used figures in trading strategies. That is, for a class of very fast operations, even carried out in a very few hours and whose main objective is to get more out of the operations. Although on the contrary, it is a figure that is somewhat more complex than those mentioned above and that has its main recipients in investors with more experience. To the point that this figure is one of the main stock market indicators that many traders perform within their trading strategies.
Supports and resistors
They are the most basic indicators of all and they should not be lacking in the strategies of small and medium investors due to the simplicity of their application. The line on a support may indicate that there are lower levels reached by the price of a share and in a specific period. While on the other hand, resistance indicates levels where the selling pressure is very strong. But in case of collapse, they can offer the option of buying the securities or financial assets selected by investors.
In either case, there is no doubt that they indicate that it may be a good time to enter the market with a bet on the rise. Or on the contrary, that it is the occasion to undo positions before the selling pressure that can develop in the next days or weeks. In addition, it does not offer problems for its correct application in the operations that we are going to carry out in the next sessions on the stock market.
What is the MACD indicator?
Another indicator that can be useful for trading on the stock market is the MACD (Moving Average Convergence Divergence) or, in its translation into Spanish, convergence or divergence of the moving average, and which has three components: the MACD, the signal and the histogram. The first one, MACD, is the difference between two moving averages Exponentials of different lengths: the first average is more sensitive to price movements in the short term and the second is a medium term average. The usual thing is to use the difference between the 12-period moving average and the 26-period moving average, although other values can be taken.
Well, the MACD moves around a center line or zero line, with no upper or lower limits. In this zero line it is understood that the forces of demand are identical to those of supply, so the MACD is in a neutral zone. Above this zero line, this indicator starts to be overbought and below this level it begins to be oversold. But the concept of overbought or oversold should not be taken into account until the MACD moves far enough from the zero line, and these limits are usually set by the lows or highs that this indicator has reached throughout the chart.
How you can use the indicators
The monitoring of these indicators is not an excessively complex process for small and medium investors. If not, on the contrary, it can be followed through specialized media and stock exchange portals. Without the apparent need to have prior knowledge for its correct interpretation. In any case, they are very easy for all stock market users to follow. Up to the point that some parts may be generated in the actions that we are going to undertake in stock market operations. As for example, the ones that we are going to expose you next
- At the time of developing a oversold situation the strategy to be used would be to buy and, on the contrary, to sell.
- It will be necessary to check if these indicators show any Change of trend of some relevance in equity markets.
- It will allow us to check which are the stock values that are overbought or oversold. Both in the national equity indices and in other international stock indices such as the following: Dow Jones, Eurostoxx 50 or CAC 40, among some of the most relevant of all.