How to predict loss & gain before investing in stock market

Every day I see the financial newspapers, such as prediction the market will do in 6 months and 12 months, several years. “The stocks that will double over the next 6 months”, I have a problem difficult to predict what they will do tomorrow. Do not trust anyone says that he knows what the future will be for market.

The new high / low ratio has been using for market prediction for many years, but many investors use this indicator in different ways. Some investors the ratio of surface area on the map, using the number zero as a neutral description, with positive numbers is greater than the ups and downs of a new a new negative number equal to more than a new low HIGHS based on a period of time. I have developed and NH-NL ratio in a completely different way some of the more popular methods. I started by creating new highs, stocks of the following while reading the newspaper Investor’s Business Daily a few years ago. Not used as an indicator of message points studied, but only buy stocks from the list. As I became more experienced investors, and unconsciously begins to track the market, noting, however, if the new highs were increasing or decreasing. After the stock market bubble burst in 2000, I started the difference between the daily new highs and lows, a new record for the day. I want to enter in the spreadsheet Excel, as well as price and volume of the major stock indices and study their relationship. Within two years I was convinced that major market tops and bottoms can be easily found by examining aggressive price and volume indices for the major studios and the ups and downs of the NH-NL. Broad market indicators investors often give false moves in all directions and many commercial services and investors have developed new indicators to assess the market to try to locate the turning points without much success. Many of these secondary indicators showing successful investors and the market is weak or strong, but not the strengths and weaknesses landmark detection with high accuracy. Many of these secondary indicators give false signals, together with the general market indicators.

Sometimes the NH-NL ratio could be negative. While this type of action happens, you can lock in the profit and move the cash on the side. It is not safe to invest on the long side of the market, when the ratio is negative. Often bear market will be when the relationship is weak and negative. If the market confirms the weakness of the market and the downward trend, this may be a good time to make money shorting stocks or using advanced options strategies, only recommended for advanced and experienced entrepreneurs.