Stock Market Forecasting
What is a stock prediction?
A stock prediction involves estimating the stock value of a publicly-traded company before it is priced publicly. Even when this information is available it is rarely released before a company goes public, thus very few people have access to this information. With so few people owning stocks the stock prediction is often made by the few.
Stock Market Prediction Techniques
1. Strategy trading
Strategy trading occurs when a trader's investment decisions are entirely based on trying to predict the price movement of the underlying asset in an attempt to profit from the eventual movements. Strategy trading involves buying stocks and other financial instruments in advance of being able to predict the direction of price movement.
2. Market data
This is an approach in which the investor observes the behavior of the market, the price of a specific company's stock, or an underlying asset like an asset based on the facts that are observable in the market or that have been publicly released.
3. Fundamental factors
One of the key factors behind market failure is the investor's lack of ability to access and examine all available information.
Predictions for the future
Although not always accurate, stock market forecasts generally aim to predict the future direction of a stock's price. Forecasting companies often give out stocks to people who make predictions, and the stocks are then bought at a set future date at a predetermined price. This is known as a prediction market, and the companies most well-known for their such services are Intrade and Argus. Companies may use a prediction market to aggregate their prediction predictions and their own in order to see who is the most accurate. Traders with predictions are able to withdraw their money from prediction markets with a certain degree of protection, which can then be used for other predictions.
Stock market prediction is the act of trying to determine the future value of company stock or other financial instruments traded on an exchange. The successful prediction of a stock's future price could yield significant profit. The efficient-market hypothesis suggests that stock prices reflect all currently available information and any price changes that are not based on newly revealed information thus are inherently unpredictable. Others disagree and those with this viewpoint possess myriad methods and technologies which purportedly allow them to gain future price information.
Written by Ishmita Vaish