About 85% of day traders miss their investment goals. Most of them lose money, even if they keep at it for almost a year.
Why do so many day traders lose money? They don’t analyze trading data to help them make decisions. They watch the so-called experts on TV and follow their advice.
They also buy on emotion. That’s the worst thing to do.
You need to learn what the market indicators are and how to analyze them. This guide to trading data has you covered. Read on to learn how to read stock charts and what to look for before you execute a trade.
1. Government Economic Reports
Many investors use economic reports from the government to predict the health of the economy. Some of these reports help investors decide if they should buy or sell stocks in the short and long term.
The reports you should pay attention to are the Gross Domestic Product, Unemployment, Producer Price Index, Consumer Price Index, and Housing Starts.
Housing starts and interest rates determine the long-term economic outlook. These are related to real estate, which always reacts more slowly to economic trends than the stock market.
2. Your Investment Vehicles
Where are you planning to trade? Some of these vehicles are sensitive to economic indicators, while others have no rhyme or reason to them.
Take Bitcoin as an example. It outperformed most stock indices, but it’s still a speculative investment.
Stocks are often volatile, but if you invest in conservative mutual funds, you’ll see steady and consistent growth.
3. Company Analysis
For investors that are interested in a particular company, quarterly and annual reports are valuable assets to have. Companies have to file quarterly reports (10-Q) and annual reports (10-K).
These are dense reports that read like snooze fests, but you can’t afford to dismiss them. Companies outline how much cash they have on hand, the competitive risks, and financial statements.
Research the management team of the company. Look at their experience and previous results.
With enough time and experience, you’ll be able to make earnings forecasts based on the financial data in these reports.
4. Use Analysis Tools
Analysis tools distill the most important trading data and centralize the data on one platform. You’ll see stock charts alongside the economic indicators.
There are some tools like spiking.com that do all of the work for you. There are AI-based platforms that automate day trading based on your parameters and market conditions.
Other analysis tools have a demo platform to test different investment strategies without losing money. It’s a way to learn without the risk.
Be a Smart Investor and Use Trading Data
What does it take to be a smart investor and beat the day trader odds? It takes a good investment strategy and analysis skills.
Analyzing trading data is a critical skill to have. It’s how you’ll be able to tell if it’s time to buy, sell, or hold an investment.
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