Investors predict daily stock market trends by checking the premarket futures status prior to the opening of the stock market, according to the Houston Chronicle. Opening levels of the stock market typically mirror overnight futures trading. Monitoring stock movements over several days may provide additional insight into market trends.
Premarket futures predict the opening levels of a stock market because the valuation of a significant number of these products is based on stock market indices, as the Houston Chronicle explains. The price movements of futures generally mirror the rest of the stock market. Updated futures pricing information is available on the websites of major financial news providers such as CNN Money and Bloomberg Business.
Prospective traders can improve their forecasting abilities by tracking market trends over a number of days, according to the Houston Chronicle. This approach makes it possible to identify trends that may be otherwise invisible. If a chart of multiple days of trading shows a series of peaks, there is an increased possibility for the trend extending to the succeeding day.
Another forecasting method involves the use of specialized software to track trading activity. This approach allows traders to identity the price range with the greatest level of activity, as explained by the Houston Chronicle. The lower and upper bounds of this price range typically influence stock market trends on the following day.
While investors can predict stock market trends with some accuracy by using several methods, no approach is infallible, as the Houston Chronicle warns. Additionally, a relatively complete understanding of stock market activity requires several years of trading experience.