Systematic Approach to Market

If you want to use short- and medium-term developments on the financial markets, you should not rely on your gut feeling. Only a systematic approach promises success.

The charting technique helps. But to increase their chances, investors need to keep an eye on other signals. The stock market is not only suitable for long-term capital investment. Many professional and private investors regularly take advantage of short-term profits – some of them very successful.

Often, however, the successes also stay out Because many investors rely solely on their gut feeling, if they position themselves for the next few days, weeks or months They believe the markets “read” or better classify news than other experienced stockbrokers know, however at best, this attitude leads to coincidences, but sooner or later painful losses result.

A systematic approach is a basic requirement, especially in the short- and medium-term investment field. If you want to invest in a structured and systematic way, you cannot avoid acquiring basic knowledge: how investors should understand the functioning of different capital markets and the most important influencing factors for their share price development. They also need to develop an understanding of technically sound investment strategies and know which products suitable for a reaction Many investors rely on the chart technology as it provides a manageable framework that allows a structured approach. In fact, the analysis of price movements and information provides important indications of future price developments However, these notices regularly require a review at other levels. It is always important for investors to also develop a basic assessment of
the markets.

In order to arrive at a sound assessment, they should, on the one hand, keep an eye on important indicators that could have a significant influence on the price developments on the financial markets. Also very helpful are statistical evaluations, which give indications of which price developments are to be expected with certain probabilities For example, seasonal and other historical patterns are interesting in this context. For example,
on the stock market the summer months are statistically weak months, whereas in October they are usually up again.

This could also be seen again this summer Megacycles and the comparison with previous similar market phases can provide indications of which price developments are to be expected at certain times Provision for the likely direction of a market can also give the mood of the market participants It can on the one hand On the other hand, the actual net positioning of important market participants, which is evident from the so-called CoT Report. In each case, extreme positioning on the long or short side as well as extreme optimism or pessimism may point to a reversal of the trend as a counter-indicator.

If interesting investment candidates are identified by means of such signals, it can be checked by means of market and chart technology whether these confirm the expected trend. If so, the technical analysis supports investors in determining meaningful entry, target and stop-loss rates

Finally, the investor chooses a product suitable for the overall scenario and the risk appetite.