Stock market investor

It is an undeniable fact that the stock market tends to move in commanding cycles on regular intervals. However it is extremely difficult to accurately predict the nature of such cycles or advise the investor to get ready. This is what the investor and the expert try to do – that is recognize the cycle and place an investment to profit. Of course, these forecasts are never 100% accurate, but they provide a way to predict the major movements in the stock market.

There are three primary in the market. Long; Intermediate and Short-term. To make matters more difficult for the investor, each of these cycles work differently. When all the cycles move together in the same direction, then it is a strong market.

In stock market, they say, “The trend is your friend”. The forecast may help an investor make out the current trends. The long-term cycle can identify the long-term trend, which is a big thing for managing long-term ‘buy & hold positions’. New long stock positions can be entered when this cycle line is rising, preferably after a period of decline.

The intermediate cycle is a significant device for position traders who like to hold stocks for several weeks at a time to enjoy an unrelenting move in the market. This cycle is akin to the 30-60 day moving average of the stock market. As this cycle rises, the market is typically moving higher. The reverse is equally true.

The short-term cycle is a great tool for swing traders who like to hold stocks for several days and play the short-term swings. New long positions should only be entered when the short-term cycle is rising out of the bottom area of the graph. Long positions should be closed and/or new short positions opened when the short-term cycle begins to decline from the upper area of the forecast graph.

The strongest moves in the market happen when these 3 key cycles are moving together in the same direction. When cycles are conflicting, moves tend to be muted and the market might appear to be choppier.

An intelligent investor has to study these features and move according to the line of action to make a profit.