Global stock markets have caught a very volatile atmosphere over the past year with the recent trade war between the United States and China, with investors largely focusing in late year to mid-year trades. However, investors were only beginning to ink in their thoughts to trade the market, with many still uncertain of what to expect in 2021. The volatile nature of the stock markets in the last decade has given birth to an array of new and innovative investment strategies. In this article we will explore some of the hottest strategies that investors are implementing right now. We will examine bullish and bearish stock indices, as well as how the markets may change over the next 12 months.
bullish index trading strategies have come into force as traders look to ride out the current turbulent period in global stock markets. Bullish stock indexes have picked up after some recent underperformance, but analysts have urged traders to be patient and not to get too excited. But the ink has been hardly dry on this, with traders expecting a continuation of gains over the coming 12 months.
Bearish index strategies have seen a sharp decline in stock market activity over the last two weeks, with investors quick to shift their attention to stocks in Japan following a new government policy that aims to curb the yen. Traders expect the U.S. dollar to suffer a substantial loss versus the Japanese yen over the coming weeks, and the European debt crisis has been cast as a negative influence. However, many traders also believe that the stock market is set to reverse its upward momentum, and traders have pulled out of the Japanese markets in their droves. If these moves continue, then the bearish outlook on global stock indexes looks overly optimistic.
Short of a major depression in the United States or Europe, the bearish outlook is quite bullish for traders who favor index trading strategies. Even though most traders expect the markets to either maintain their recent uptrend or drop back, some are looking for more significant movement. Traders have also been pulling out of the U.S. dollar index, which has lagged other leading stock indices over the past year. Over the last several weeks, technical analysis has been the dominant approach among traders looking for higher-quality gains in global stock indexes.
Technical trading strategies have become popular due to their increased versatility and better profit potential. While the strategy still involves placing an order with a financial instrument and waiting for that instrument to perform in a manner that matches your forecast, the flexibility of global stock indexes allows you to profit from short and intermediate term trends. Many of the world’s top corporations have long since used the financial instrument to increase their own value and their profits. With the introduction of index funds, however, anyone can become involved in day trading, even if they don’t have previous experience in trading stocks themselves.
Most people who follow global stock indexes have not traded on major exchanges like the New York Stock Exchange or the NASDAQ since their introduction. These markets operate much differently than standard general-purpose stock exchanges. Instead of using OTC markets, however, investors place trades on the over-the-counter market. Because these markets are unregulated and offer lower fees than OTC trading accounts, they attract a lot of new participants. This means that even those who may not have had any experience trading on general exchanges can generate returns on their investments through these markets.
One particular chart that is quite popular during the recent upswing is the Dow Jones Industrial Average. The upswings in this particular index mirror the dramatic ups and downs of global stock indexes. Investors who trade on OTC markets will need to pay special attention to changes in the Dow Jones as this can provide strong signals for short-term gains or a decline to long-term losses. Upswings in the DJIA are also expected during the upcoming months. A sharp upbow in the DJIA indicates that the economy is performing well and can benefit consumers and businesses.
One other indicator that investors should pay close attention to during the upcoming months is U.S. interest rates. Changes in interest rates can alter the strength of the dollar and change the value of the global stock indexes. Traders will want to remain well-informed about changes in U.S. interest rates because they can have a significant impact on both the direction and strength of the U.S. dollar. Traders should monitor the changing interest rates around the clock and stay on top of market news in order to make the most accurate investment decisions. In addition, if an uptrend continues in global financial markets, then the chances of a sustained uptrend should increase. Staying on top of global stock indexes through the bull market will help investors make the most prudent moves possible during the bear market.