Using Mathematics to predict stock market
Is there a true secret to predict stock market activity? Studies make it evident that mathematics is an effective tool to predict stock market crash and boom. Several scientists have actually tried to find an effective solution to predict stock market action and enable investors to make profits. It appears that with a few mathematical techniques, one can predict stock market rise in advance and benefit from it.
The number phi to predict stock market: Phi is the magical number 1.618 in mathematics and has been used to predict stock market moves. This solution stems from the fact that investors normally have positive and negative opinions in such cases at a ratio close to phi. To predict stock market movement, Experts draw a graph for a particular period. Vertical grid lines represent the main timing points in the market while horizontal lines can be used to denote key price points. The market price shows a number of resistance points. The high and low levels of the market pricing match with the horizontal lines. Thus, the golden ratio, as it is called, helps analysts sketch out a pattern and predict stock market rise.
Fibonacci numbers assist to predict stock market: the Fibonacci series have been used in technical analysis to predict stock market behavior. This theory to predict stock market is demonstrated by the Elliot wave method. All the main moves in the market could be represented as a series of 5 waves each. First wave is up, the next down, the third up, the next a retracement and the final one completes the movement pattern. This sequence is observed to rise at a fixed ratio, growing like compound interest. This predictable pattern of stock price, approximately similar to Fibonacci sequence, is a very good option to predict stock market. Techniques involving these fibs are very popular methods used today to predict stock market moves. Patterns resembling fib sized intervals can provide interesting information to predict stock market crash in advance, thus being a savior to many investment enthusiasts. |
