Wait, did you think you were going to have to research and map out the market’s past all by yourself?  Of course not!  There are people who get paid to do that sort of work.  They monitor the market hourly, daily, weekly, monthly, and yearly so that they can provide big-time traders with the same knowledge mentioned before.  The more an investment company knows about the market, the more money they can make.  The same is true for stockbrokers.  They make money when you make money, and they want to do the best they can to make sure that you make intelligent decisions.

The best part of this is that you have access to the same information as these VIP clients.  Chartists, who are essentially market analysts that publish their findings in easy to read charts, produce what is referred to as a candlestick chart.  These charts are basically a combination of a line graph and a bar graph that show the trend of various stocks, indexes, or other interests over a specified period of time.  Therefore, you can easily determine if the commodity is on an uptrend or if it is taking a downturn, when the last major change occurred, and how long it is predicted that the stock or bond will continue on the current path.

You can actually find information on most commodities and their market trends for years in the past, and some even all the way back to their introduction to the open market.  Using this information can help you decide whether it is a good idea to buy or sell the stocks or securities in which you have interest, or if it is better to hold off for a peak in the market trend.

Understanding Market Trends

Understandably, as economies vary, the value of various commodities can change.  This is because, when an economy is strong and flourishing, a nation is wealthier and has more purchasing power.  Along with that power comes a higher value for the items purchased.  In other words, if people have more money to spend and are spending a greater amount of that money at Walmart stores, the value of stock at Walmart is going to multiply at a considerable rate.  Therefore, stockholders become wealthier in terms of assets, simply because the shoppers are driving the market with their purchasing power.  When stockholders are wealthy, and the value of their holdings is on the rise, they continue to purchase stock, which again, pumps the economy.  A strong upward trend in the stock market is an excellent sign for any economy.

However, there are also things that affect the market in a negative fashion, causing stock values to plummet.  For example, warfare rarely has a positive effect on the stock market.  On September 11, 2001, when terrorists attacked the World Trade Center in New York City , the economy of the United States took a huge dive, and the nation was threatened with a depression.  Some analysts were sure that it would never properly recover.  The same thing typically happens any time there is an attack or act of war within a nation.  However, the critics proved to be wrong, and the United States proceeded to rebound, or recover from a bad downtrend, in a strong manner.  This quick recovery occurred mostly because the people of the United States continued to push and spend, forcing money and wealth back into the economy.  In watching the reaction of the stock market, you can learn to read trends based on world events.

Oil prices commonly affect the stock market, as well.  Especially on the Foreign Exchange Market, you will find trends vary depending on many current events.  You will also note that, over time, the principle value (or face value) of a currency may purposely be revised by a nation in terms of currency conversion.  This is referred to as devaluation.