The common principal involved in stock-trading is “demand and supply”. The value of a company share increases when there is a demand for it in the market.
Let us take an example of two companies, one is a steel company and another one is a coal company.
Before this I want to explain the functionality of these two companies. For the manufacture of steel, the main raw material required is coal. So if the demand for manufacture is increased, the coal producing company value increases more in the market than the steel producing company. As such, the trader has to think about the demand and supply.
The share market price of a company also depends on the current trend, commodity demands in Europe and Asian markets.
If the government has announced some news in favor of banking sector, then the nationalised bank shares will get increased.
After this, if the bank release any benefits to farmers regarding the release of government notes, then poultry and related share will get increased. Thus the trading wholly depends on the demand and supply and the current market trend with current affairs.
By this we can understand the awareness of various companies’ stock.
Also there are various new software’s are implemented to draw the trade graph and its future predictions. The algorithm used for this is the ant colony optimization algorithm.
The purpose of this algorithm is to find the shortest path, by this if the user searches about a particular company more times, they company has got some merit or demerit, which hikes the ratio of demand for that particular company.
By this the users are suggested to buy the most searched company.
The share price prediction software’s are available in free wares and some are available for low cost. If we learn to use both the software’s and also to analyse by self, the the most accuracy will result in the prediction. The way to use these software’s is the analysis of the line graph, which shows the current, past trading value of that particular company.
If the company shows a steady growth rate in the past, then the experts suggest to buy the share as a long term investment. If the graph shows a sudden peak in the morning, then tat company is good for the one day purchase. By this the we can make the prediction more accurate.