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How to know when the stock market is recovering?

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Stock market trends

After long periods of decline a difficult task for traders becomes finding out when stable recovery has begun. That is why investors look for certain signs that could show them stock markets have started rising in a stable manner.

Ride the momentum

Growing economy and higher stock prices, as well as growing stock indicators may show that a recovery on the market has started. Sill, weaker trading could undermine the recovery of the stock market. There is no single stock market indicator that could show binary option traders that the stocks are growing in a stable manner. In reality leading indicators could actually give you false signals. That is why traders should keep in mind that their goal is to ride the momentum of the current stock market trend.

Economic recovery helps stocks rising

General economic recovery also helps sustainable growth on the stock market and such indicators are also important to follow. Often stock markets recover, despite the fact that the general condition of the economy does not show to be too good. This happens as stock markets truly look ahead in the future. When big investors show optimism markets start growing. A good example is the rise of US indices and stocks in the first quarter of 2013. After hitting a bottom in 2009 when the world financial and economic crisis started, US stocks started rallying and the Dow has doubled since then. In March 2013 indices like the Dow Jones reached record highs after issues that worried investors in 2012 were actually solved and many companies reported better than expected earnings.

Watch the moves by central banks

In order to know when stock markets would begin to rise investors must also watch the moves by banks. Currently, investors are cheered by the commitment from major central banks to keep supporting growth in the biggest economies in the world.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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