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What is the best tool to predict stock markets?

This article explains which technical tools can be used to predict stock markets moves successfully.

Although there are many tools, but most people cannot use them properly, reasons below. To predict moves of a stock, first and foremost look at its "trend". Trend and Price action is the very first requirement of any technical analysis, the very first. Details of trend analysis are explained in this training material https://MunafaSutra.com/page/ebook Coming back to the question, once you have identified the trend, then move to the next step, candle stick formations. Candle sticks behave differently in different trends. In an uptrend, a morning star candle pattern will indicate trend continuation, and a buy trade can be initiated here. In a downtrend, the same morning star pattern will simply indicate a pullback, and its not safe to buy the stock here. Stock can start falling anytime again. If you are making a loss, then this is the time to exit the trade and reduce your loss. Still if things are not very clear, then you can use an indicator like MACD or ADX etc. Remember, indicators are just math calculations on price, mostly done to smoothen the price or to measure buying/selling pressure. Indicators also behave differently in different trends. Simply knowing a value for an indicator is not enough. You need to and certainly need to understand what the indicator is doing with its math. Most people will tell you that a value of 70-80 in stochastics means that stock is overbought, but if you ask them what stochastics measures, then they will not be able to tell. Most people, not all. Stochastics measures the distance of current price from recent HIGHS and LOWS. If price is too close to a LOW point, then stochastics will show a low value, and vice versa. This indicator will give you shocking results depending on trend. Suppose a stock is in uptrend. In an uptrend, a stock will keep making new HIGHS. Stochastics will keep showing you really high values, above 80 etc. You will keep thinking, "stock is overbought, but why is it not falling..." You forgot to notice the trend, that is why. Its not supposed to fall, doesn't matters what the indicator says. Same indicator will give correct signal in a range bound stock. A range bound stock will start falling near a recent HIGH point. As soon as stochastics will go 80, you will see the stock falling, it has reached those recent HIGHS. ADX is another good indicator, but even this will behave differently depending on trend. ADX has 3 lines, a positive DY line (green), a negative DY line (red), and a momentum line (white or blue or black) In an uptrending stock, if green line goes above the red line, then its time to get in on the stock, specially if momentum line is also shooting up. In a downtrend, if green line goes above red, and you are stuck in a loss making trade, think of exiting here to reduce your loss. Do not start buying here. Do not think of averaging here. Stock will fall again, because of the downtrend. Momentum line in ADX will shoot up very quickly. If a stock gives a nice move on a single day, like 7% to 10%, then momentum line will shoot up, giving a false signal in a downtrend. This is just a pullback in a downtrend, stock will fall again. Do not start buying here based on momentum line values. Alternatively, in an uptrending stock, a shooting up of momentum line will indicate trend continuation, and buy trades can be initiated here with confidence! There is no indicator which you can take on its face value. You need to understand what the indicator is measuring, or else you will definitely fall for false signals. Read that training mateerial mentioned above. It explains all these things in great details, with examples from real markets. https://MunafaSutra.com/page/ebook