Candlestick Trading Blog

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The stock price, for shares of particular company, fluctuates continuously and the price is based on many factors. The roles of supply and demand play an extremely important role in the stock market in general. Economics teaches us that when the price for a stock falls is it typically due to lower demand as most of the stock has already been sold off. Conversely, as the price increases it is due to a higher demand as most of the stock is in the process of being bought.

Stock price fluctuates and this fluctuation depends on many factors. One of the most important factors affecting the price is the news. Negative press releases about a company, positive news about a company, and the projected performance by the company all lend a hand to affecting the price of a company’s stock. The Wall Street News especially and the information contained in the publication also affect the company’s stock. Newspapers cover the daily progress of the markets and offer analysis on so-called hot stock market picks and stock market websites also send out newsletters and updated to their members.

When determining the value or worth of a company you must look at the profit made by the company in the previous quarter, not necessarily the price of their stock. The price of the stock does not determine the value, but instead the perceived value of a company is what determines the stock price for that company. Market capitalization is the most important part of determining a stock’s value and this is obtained by taking the total number of outstanding stock in the market and multiplying that with the stock prices to calculate how much a company is worth.

To take this further, you must figure out the earnings per share of a company. Every company must publish a quarterly report that provides the earnings per share of the company. The earnings per share is simply the profit made by the company per share in the last quarter. Therefore it is obvious that you must pay attention to the quarterly reports if you invest in stocks using fundamental analysis. You can also use Japanese Candlesticks, a form of technical analysis that does not look at fundamental factors. It does not look at the specific fundamental factors because these factors are considered to be indicated in the candlestick chart patterns, which therefore indicate history of the price movement.

There are numerous factors that affect the stock price of a company. It is important to have a basic understanding of these factors whether your trade using fundamental or stock technical analysis.