A good place you can start with your analysis is looking where the market is at on an index.
“A market index is a metric that tracks the performance of a group of stocks. Some indices are designed to indicate the overall performance of the market, while others follow a particular sector”
By looking at the index for a country or particular sector can provide us with a very good insight if it is in a bull or bear market.
This insight can help us decide about shares we are interested in or currently hold.
On the Equity smart platform you can find 24 indices listed with a detailed analysis of each one.
A great Index to know and monitor is the ASX200 (XJO).
This Index consists of the top shares by market capitalisation in Australia and can be a great indication of the current market conditions.
Trading as per the ASX200 state can be a great tool for the ultimate conservative trader.
Only buying when the ASX is in a bullish state, and only shorting when in a bearish state.
Another great index to follow is the American Dow Jones Industrial Average.
Because our smaller market tends to follow the bigger market and can be susceptible to react to their movements.
By viewing an index we are looking at the big picture first, then analysing potential companies and smaller details.
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