Stock Market Forecasting

Stock Market Forecasting – An Exercise In Futility, A Huge Waste Of Time, And Why You Don’t Have To Do It Anyway.

I get really amused when someone asks “What do you think the market is going to do in the next few months?” As if anyone had some “secret knowledge” of stock market forecasting.

Now, like anyone else, I can come up with any one of several different scenarios of what I think the market will do in the future. And I can really sound “smart” when I expound on the future stock market trends based on what the Fed will do with interest rates, looking at chart trends and extrapolating them into the future, etc.

But here’s the real truth when it comes to stock market forecasting. It really doesn’t matter one iota what you or I think the market will do in the future. The market is going to do what the market is going to do.

Remember, the “market” is made up of human beings. These human beings have these things called “emotions” that will go bonkers to the “fear” side of things, then will go berserk to the “greed” side of things. That’s related to another thing called “human nature”. Can you confidently say you are able to predict how humans will react to anything 100% of the time? I rest my case.

But what if there were a way to effectively measure and monitor these human emotions at any point in time – especially as they relate to stock market investing and trading? That would be a much more useful thing to have,than the ability to forecast the stock market over a broader time frame.

The truth is, and this is where 99% of investors and traders go wrong, you don’t have to know where the market is going, you just have to know what it’s doing today.
And you know something else? Human nature is not going to change. It’s the same today as it was 2,000 years ago, and it will be the same 2,000 years from now.

A certain Japanese rice trader family in feudal Japan – over 400 years ago - tapped into this concept, and developed a system of rice trading that made them the equivalent of billionaires in their time. They developed a series of little markings on rice paper that indicated whether the price of rice was going to go up or down the next day. These little symbols look like candlesticks, and today the system is called the Japanese Candlesticks charting system.

And guess what we discovered over the past 400 years? This system works for any tradable entity with a high, low, open and close price. That includes the stock market of individual stocks. These patterns tell anyone who learns the intricacies of the system the probable direction of that entity the next day, especially at key reversal points. Using this system, you don’t have to know what the market is going to do six months from now, because you can tell with reasonable certainty what the market will do the next day!

The ancient Japanese rice traders called this concept “let the market tell you what the market is doing.” And the system is a visual depiction of human emotions, especially at the extremes of fear and greed.

So now you don’t have to worry about stock market forecasting. Not when you have a system to measure human emotions in the stock market each and every day.

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