How to become a Stock Market Analyst?

Predicting future prices of Scrip’s or Commodity is based upon Market Analysis, there are basically two methods of analysis available first one is Fundamental Analysis and the second is Technical Analysis.

Fundamental Analysis

Fundamental Analysis involves analyzing the characteristics of a company in order to estimate its value.

It basically involves

•Study of Economy of the country in which you are planning to invest.
•Study of Industry/Sector in which you are planning to put your money into.
•Study of the Company in which you are planning to invest your hard earned money.
Technical Analysis

Technical Analysis involves analysis or study of past movements in the prices of financial instruments, currencies, commodities etc., with the view to predict future price movements by applying analytical techniques.

The field of technical analysis is based on three assumptions:

The market discounts everything – The major criticism of technical analysis is that it only consist price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time, a stock’s price reflects everything that has or could affect the company – including fundamental factors.

Price Moves in Trends – In technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movements is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on the assumption.

History Tends To Repeat Itself – The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements and understand trends. Although many of these charts have been used for more than 100 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.

Chart and Chart types in Stock

A price chart is a sequence of prices plotted over a specific time frame. There are basically four kinds of charts used these are:

1.The line chart,
2.The bar chart,
3.The candlestick chart,
4.The point and figure chart.
So, basically making profits in stocks and commodity involves fundamental and technical analysis, studying charts, knowledge of equity, keeping pace with national and world economy and various other issues. According to me very few people will have time to gain knowledge and then see by themselves that investing in which stock or commodity will prove beneficial for them, my suggestion here is to take advices provided by technical analysts involved in full time research of stocks and commodity market.