Anybody can learn to read these charts, it is not just an art used by stock brokers.
You need to know just how to read the stock charts in order to be able to predict what a stock will do.
There are four main stages to a stocks cycle and they are categorized as stage 1, stage 2, stage 3 and of course stage 4. Most always this cycle of stages will repeat it self and will go up to new high CPS with each cycle.
There are three traders type that you need to know and they are: swing traders, momentum traders and position traders.
Stocks usually have what is called a down trend. Then when it is on the rise, picking up a bit of speed it is known to be in stage one. Position traders work this stage and sell the stock to give it a little boost.
Once the stock is up and coming again, being traded once more, it is known to be in stage two. Momentum traders now buy the stock.
In stage three, the stock hits a peak and the tread it started will level out. It will not rise any further in this stage. The cost per share or the CPS is much higher in this stage. Now is the time to sell if you bought in stage two.
In stage four, the stock is starting a downward trend again. You may have lost your opportunity to capitalize if you waited till the end of either stage two or three to buy. The swing traders will try to project the way a stock will go and they that is when they get into the picture. All of this information can be found in the stock charts in every industry. These charts can be found online when ever you need them.
The stock chart is a very basic chard much like a general X-Y axis with the usual time line such as the months, days and years located on the bottom of the chart and the value of the trading price goes up the left side of the chart. The chart will show a line that may be wavy, with it starting low as in stage one then going up in stage two, peaking at stage three and or even at the beginning of stage four. The chart will try to predict what will happen with the stock.
Since the chart is basically simple, you should be able to determine by glancing at it, where the cycles will start. You can check out most any time frame no matter if it is for one year or a few months. You should check out the stocks statistics for at least two years in order to get the best forecast.
Of course there are other charts around but the above listed chart has been shown to be the best. You can make a great deal of m0oney by learning how to read the charts and watching the trends, so you can predict which way the stock will go.
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Source: www.articlecity.com
