Many of us are ardent traders and we love to be in the market looking out for opportunities. But this does not authorize us to be the advisors elaborating the goodness of this field. There would still be people who would be doubting this field for its unpredictable fluctuations and this would keep them away from becoming a part of this. So what best could explain them the reasons for these fluctuations and make them understand that this is also a viable field for making investments? It is nothing but the various factors that affect and cause fluctuations in the stock market and these are believed to be the best justifications that would elucidate and explain the unexpected and sudden fluctuations.
A successful trading depends on how well a trader understands the market and also the factors that affect it. Now you can also become one if you get to the ones listed below for they are considered the major players in bringing in a change in the prices of the shares.
- Economic condition– a change in the economic factors would bring in a huge change in the stock market. For example, an insurance company, that has been doing well so far has now been affected by the changes in the insurance policies and rates would actually become a very big and a perilous one for the entire industry as a whole.
- Market information – it is said that for a trader to be successful in his stock and trade experiences, it is essential and expected of him that he gets all the latest information from the market. But here too there are certain traders who would look into those that are familiar to them irrespective of whether the others are beneficial or not. So based on this perception of the market the values of the assets or the stocks would get affected.
- World events – this is another important factor that determines the drop or rise in stock prices. When a company announces the closing down of certain departments aiming at reducing the size or if it decides to lay off workers for the same reason, the value of their stocks would fall badly. In the same way, if there is anything bad or unexpected about a company`s performance, the stock or share prices of its competitors go high automatically.
So it is important that the traders take into account the very many various factors that would become the influencing factors in determining the stock prices.