There are times market conditions are favorable to buy and times it is favorable to sell. The educated investor learns to watch market conditions for these signals and then to act on them. If an investor is buying investments for the long term, then it is not has important to watch for signals on a minute by minute basis, checking the market conditions daily is adequate. It is extremely important for the day traders to watch for signs that the market is changing very closely as they will need to act quickly on any stock market movements.
It can be a full time job to watch the market closely for signals of change. Trading software is available that can alert an investor when these changes are taking place. The software will place alerts on the computer screen for the investor. The investor is able to choose which changes they wish to be notified of. These are usually subscription services and can cost several hundred dollars for the full service. These services include live stock market information and trading software.
Services are available for the investor who doesn’t have the time to closely watch the market. These subscription services will post changes on an hourly or daily basis. Some of these services use market analysts who will watch the market for indicators of a particular signal. Usually these systems use automated software to watch the market. These services should be researched carefully as some are better than others.
It is always important to know how signals are being generated when using a signal provider. There are many different market indicators and sometimes they contradict each other. Depending on how things are changing, conflicting signals may be sent.
The accuracy of indicators also depends on market conditions. Trend indicators will signal buy during market upswings, but long term oscillator indicators will perceive the market as overbought and may send out sell signals. Trend indicators tend to be more accurate during trends and oscillators are better indicators during times of transition. Both indicators may tend to contradict each other depending on market conditions.
It has been suggested that at least 3 market indicators should be used to provide better accuracy. The signals that are used should come from various time frames. Sometimes a short term market correction may cause an upswing, but the market may actually be trending downward. A wide angle view of the market allows variations to become more obvious.
Signals may be sent daily via email, be available on a website, or be part of your trading software and popup on your computer screen. It depends on which service you utilize.
Signal services are usually offered on a monthly basis. Some are quite expensive as much as several hundred dollars a month. These services target the professional trader. For other traders, less expensive services are available.
Each individual investor must decide whether or not these services have value. Whereas they can save time, users must be careful not to become lazy in monitoring the market on their own. Each investor should have the necessary skills and tools to monitor the signal system and to occasionally do market calculations on his own in order to monitor the market and the effectiveness of the system.