Having a current and real-time financial data platform is an essential tool to study your movements in the stock market and monitor the behavior of your assets to take advantage of opportunities more effectively and make the best decisions.
Financial markets, are the physical, virtual or mixed space where the exchange of financial instruments is carried out, their prices and operating volumes are determined.
Thus, we can find financial markets in which financial values such as bonds, raw materials, currencies, funds, cryptocurrencies are quoted and exchanged, in addition to so-called derivatives such as futures, options and / or contracts for difference.
The functions of the markets are:
- Reduce intermediation costs, allowing greater circulation of products.
- Establish the mechanisms that allow contact between the participants in the negotiation.
- Manage product liquidity flows or liquidity flows from one market to another market.
- Set the prices of financial products based on their supply and demand.
In such a way that, depending on the negotiated instrument, the type of financial market is limited. The totality of markets and their interactions, move the global economy.
Each of these markets presents investment vehicles with specific conditions and characteristics that are constantly valued or devalued, generating investment or speculation opportunities.
To take advantage of the greater benefits offered by these opportunities and to build strategies for greater profitability, a stock market analysis must be carried out in which the financial assets, market conditions and the characteristics of the operation being carried out are studied and monitored.
All this analysis requires specific and updated information to define what, when and how to act on an investment.
Analysis and evaluation projects investment
The stock market analysis studies the elements and characteristics of a given investment, in which relevant financial information is gathered to serve to make buying or selling decisions.
This type of analysis is integrated by two others that imply different approaches and are related to investments of different terms:
Here, all the variables that directly or indirectly impact the real value of the asset to be analyzed are studied, from the internal variables of a company to those of the economy that influence the price of the shares.
The consultation of economic, business and political news as well as related data such as speeches and measures by central banks, data on GDP and the CPI, economic indices, etc. All this allows to make a prediction of the price that a certain financial instrument will have.
Its advantage lies in conducting global market monitoring, generally it is used more in long-term investments.
It relies on tools like charts to identify movement patterns and trends, oscillators, and indicators. With this, predictions are made of the future behavior of a listing price in a certain financial instrument to choose the best time to open a position.
Whether for assets such as currency pairs in the Forex market, stock indices or stocks, behaviors can be predicted at precise times, making it more used for short and medium-term investments.
Each investment is linked to the profile and strategy of each investor, however in general the database that must be available for a broad analysis is:
Economic and financial situation of the market
Knowing the direction that the markets are taking is possible through the indices, which provide real-time information as if they were a photograph of a specific moment in the financial markets.
For investors they function as reliable benchmarks to assess the performance of instruments, actively managed funds and investment portfolios compared to the market.
The greater the number of indices at hand, the more flexible the markets can be monitored and evaluated.
Each investment product is linked to all the securities, a representative sample, or other assets that are part of an index, so knowing the difference between the index and the linked instrument is crucial to understanding the nature and role of both.
To create them, methodologies are used that manage to cover different asset classes such as stocks, bonds and commodities, among others.
Most of the indices belong to one of the following categories:
- Equity indices: integrated by a number of shares and used for general performance level of the market for equities in general, or some subset of it.
- Fixed Income Indices: These follow the prices and yields of fixed income securities, they include public debt securities and bonds issued by companies.
- Commodity indices: compile the variations in the prices of a basket of futures contracts on commodities - raw materials of industrial and commercial products.
- Strategy indices: They imitate a series of strategies implemented in the market, instead of directly measuring market performance.
- Economic indices: it is a set of samples that share relevant characteristics. They have transparency, they depend on rules, methodologies and data that are publicly available.
Opening of financial markets
Each financial market is updated after the weekend or on public holidays, when they are opened for trading, it is known as market opening.
Each region has different opening times, since the working days they manage are different, however, in the case of the Forex or currency market, their opening is constant as they open one after the other.
Risks in the financial market
Although all investments have a latent level of risk, in order to balance the search for higher returns, you must have access to a large amount of financial information.
The more elements you have to study, compare and evaluate, the less uncertainty there will be and in this way the risk will be minimized.
Regardless of the investor's profile, you must have a professional advisor and access to a system of adequate and up-to-date tools that allow you to obtain an overview of market movements to seek the best profits and the lowest possible risk.