How to FIND STOCKS THAT BEAT THE MARKET – Simple indicator to BEAT the S&P500!!

How to FIND STOCKS THAT BEAT THE MARKET – Simple indicator to BEAT the S&P500!!


so how do I find stocks that are beer in
the market how do I know if a stock that I wanna buy is beer in the market you
know this is a very important question because if you want to buy stocks that
have a high growth potential you need them to be their index of reference hey it’s Daria and this is Divity trading a
platform where we can share our best tips and tools when it comes to trading
investing or finance in general and if you love the subject please consider
subscribing you know out there there are so many stocks available if we just
consider the US stock market we have something around 7,000 stocks but not
all these talks are good and not all these stocks are performing better than
the market so how can I verify if a stock is beer in the market to do that
we just need to use the so called index of relative strength and know I’m not
talking about the other side but hey if you enjoyed the video please leave it a
like and let me know in the comments down below if you already knew about the
index of relative strength and do you know how to use it to use the index of
relative strength and again I’m not talking about the other side we firstly
need to understand what this indicator is so this indicator it’s just a ratio
between two different instruments basically it makes a comparison between
one instrument and the other by actually dividing them for example if I want to
make a comparison between a certain stock and a certain index such as the
S&P 500 for example I can use this indicator and it will plot me a chart if
the line on the chart is declining that means that the stock is weaker than the
S&P 500 on the other hand if the line on the chart is increasing that means that
the stock is stronger than the S&P 500 now and this is very important if the
line on the chart is increasing it does not mean that the stock price is
increasing this is just because it’s a fraction so we have either a numerator
that is increasing so the stock is actually increasing its price or we can
have a denominator that is decreasing so in this case would be the
index the S&P 500 that is decreasing without the need to have the stock to
increase and involve these scenarios so the start increasing or the index
decreasing we would still have the same increasing line in addition we can have
a scenario where the denominator so the index is decreasing at a higher ratio
than the numerator so the stock and so in this case we would still have the
line increasing the same thing applies with a decreasing line in this case we
have either a numerator that is decreasing a denominator that is
increasing or a numerator that is decreasing at a higher rate than the
denominator but so how can we use this indicator well the first option that we
have is the one that we talked about earlier so we can compare a certain
stock with the general market so we can take a specific stock and compare it
with the S&P 500 the Russell 2000 or the general Dow Jones another way is to
compare a certain stock with its sectors index so for example if I want to see if
our desk is meeting a sector of reference I can compare it with the Dow
Jones technology to know the sector of a stock you can just use fin viscom you
type in the name of the stock and it will tell you the sector I will put a
link for fingers come in the description but where do I find the indicator how do
i plot the chart well to do that you obviously need to use a platform for
stock analysis and in this case I can recommend you to use the pro real time I
will put a link in the description for this pattern is very simple
you just add the indicator choose the index of reference and then when you
type in in the search bar the name of the stock you want to compare it will
automatically compare it with the index you chose earlier and then plot you the
chart in this case for example we can say that from November 2018 and February
2019 Autodesk was building each sector whereas from February 2019
– now is neither outperforming or underperforming each sector
one thing to keep in mind is that you need to compare this stock with a
relevant index you cannot compare a US stock with a new European stock index it
doesn’t work that way it would just give you results that are insignificant you
need to compare it with the right country and also the right sector
another good way to use this indicator is to find the best sectors to invest in
the sectors that are beat in the general market if a compare a sector such as the
technological sector with a market of reference such as the US market I can
see if that sector is outperforming or underperforming the market to do that
it’s very simple it’s like with stocks you just take the indicator put in the
index such as the S&P 500 or the Dow Jones and then when you go in the search
bar you search for the sectors index such as the Dow Jones Technology and
then the indicator will plot you the line of relative strength in this case
we can see that from November 2000 in nineteen and April 2000 in nineteen the
sector the technological sector was doing better than the S&P 500 whereas
from April 2019 to now it’s doing worse so it’s underperforming the S&P 500 so
at this point it would be a nice idea to consider not investing in this
particular sector and so this is how you can compare a stock or a sector with its
index or market of reference and hey if you enjoyed the video please leave it a
like and let me know in the comments down below if you already knew about the
index of relative strength and did you know to use it in this way and I see you
in the next video so why is it important to have a retirement plan even if you
are young so time makes money with two different mathematical concepts addition
and compound interest the first one means that if you save little money
every month on a 40 plus year scale you’re going to have a pretty decent sum
the second

One comment

  • Divity Finance - Tips for Finance & Investing

    Did you know about the Index of Relative Strength and how to use it?

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