Data/Research
Information is the key to being successful in financial betting. A range of sources are available for free, but it's worth paying for as much data as you need to trade your market successfully. There's always someone else who could get the edge on you with better data, so it pays to keep ahead.
Data and News
The biggest driver of market sentiment is news. A story that breaks will have a knee-jerk response from the markets, and then when the news is more thoroughly digested the real price adjustments will happen. This interpretation part can be performed alone or via one of the many market analysts opinions, but being in consensus with the crowd isn't always an advantage. Proper examination of market-moving factors will at least allow you to explain a confusing price movement and could enable you to notice a major development before everyone else.
International events will affect the whole market but keep an eye open for industry-specific implications e.g. An event leading to a higher oil price could benefit alternative fuel sources like Wind power or Nuclear. Industry-specific websites are useful to have at hand in your bookmarks, a handy start-point would be the financial directory at the link below. More local level news stories affect individual stocks, as can tangential news about a company's suppliers or clients.
It is advisable to set up email alerts so that whenever something relevant to your markets happens, these are freely available from any large Finance portal such as Yahoo. Internet broadcasting of Finance channels such as Bloomberg can be a useful background item for your online working time too. There are also certain companies which provide corporate level news feeds, eg. Bloomberg, Reuters. The company ADVFN provides a great deal of info for free, as do Yahoo Finance or Motley Fool. There is live data on ADVFN and free software called Medved Quote Tracker can stream data sources directly into a useful interface.
Technical Analysis
This is a form of investigation into the price of a share/ index/ commodity which produces predictive information. There are simple forms of analysis such as the use of moving averages and support/ resistance areas, then there are the more derived branches such as Elliott Waves and Fibonacci. Some people become pure technical analysts and just trade on this information, whilst most people use the technical analysis alongside fundamental indicators Charts are extremely useful and carry a wealth of information. Any trading decision should be accompanied by at least some research of the charts.
Fundamental Analysis
This is the traditional method of examining a stock. Some factors which are looked at in great detail are; Industry sector, Dividends, Yields, Market Capitalization, Earnings, Projected Earnings, Growth Rates, etc etc. Basically it is a company's valuation and future growth rates which are being weighed up, and prices are derived from that. Fundamental is no longer the one and only way of assessing a company, but rather should be taken in conjunction with a range of other tools and factors.
