What are the different types of stock trading systems?
stock trading systems can be grouped for so long or short -term and technically based or essentially based. Different technical approaches can be used in the long run or short -term point of view. The basic analysis focuses on the financial health of the company, the industry of the economy in which there is a company, and the product line to estimate future prospects for this company. Technical analysis focuses on the market activity on the market to try to assess the opinion of the company's market. All trading systems are compared with the "Buy and Hold" benchmark system.
The basic systems are approaching the stock market as a long -term investment where the strengths of companies with good products and good management develop others, but it may take several years to fully recognize the market. Analysts in these systems often rely on the company's analysis and are interested in the product itself and predict if the product has the future.
If the product is HAnd it is a robust future, the analyst will want to talk to driving. It seeks to evaluate managerial attitudes and approaches to the creation and marketing of the product line. Financial analysis is very important. Each jurisdiction has different requirements for public corporations, but the markets that the analyst is most interested in will have all transparency laws that make the audited statement and expenditure of public corporations.
Short -term stock trading systems are completely technical. Popular approaches include patterns recognition, volatility extensions, whether measured by scope or volatility (VIX), calls for capabilities and a variety of volume, volume, progressing shares, declining shares and daily news of new maximum. Trend lines and Japanese candlesticks are often integrated into short -term approaches. Cycling analysis of both long -term and short -term cycling will appearmarket ascension.
Long -term stock trading systems, which are of technical nature, include econometric models, interest rate models, price -based models and internal stock market models. All these models focus on the timing of the overall increase and decline in the market. Unlike fundamentalists who claim that market timing is impossible, market technicians point to studies that they claim that market timing is quite profitable.
Long -term technical analysis uses many of the same techniques used in short -term analysis, but use daily or weekly graphs rather than five minutes stripes. Market dies, including volume increases, reduce volume, new maximum, progressing problems, and problems are more commonly used in long -term stock trading systems than in short -term systems.
The standard that all stock trading systems are compared is "buy and hold". This applies to the selection of a business indexU and calculation percentage or loss that occurs during the period of possession. All other stock trading systems are compared with this result and few work better, especially free of charge.