Stock Market Indexes

2017-08-31 13:17:23


You cannot directly trade stock indexes, but you should still keep your eye on them. Indexes track the market. Whatever those companies do in the stock market is reflected in the indexes. Different indexes track different stocks and have different criteria.


Paying attention to these indexes especially the big ones is critical to a trader. They are going to tell you where the easy money is and where the hard money is. For example, if you find one stock and it is giving you a great buy signal, but the main index is in a huge downtrend that is not a good sign. While the stock that you are investing into may be giving you a buy signal you are going against the market. That means the odds are against you. On the other hand if you find that stock is giving you a buy signal and the main index is in a huge uptrend then the odds of you succeeding are greatly increased. This would be a much more likely trade to be profitable.


Trading in the same direction as the major indexes is normally a wise idea.


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张力平,IT行业资深分析师。Zhang Liping, aka Sevencastles,a senior analyst in IT industry and the owner of Seven Castles,'a Shanghai blog featuring news and views of great interest'.