In order to make better trades, traders need to understand the basic tenants that affect the stock market. Knowing the basics of the stock market reduces risks and leads to better trades. The following is a presentation of some of the elements that traders must be familiar with to become better traders.

The economy has the greatest affect over the market as a whole. During good economic times companies do better on average and stocks increase in value. Conversely, weakling economic indicators signal lower future prices. Being able to understand economic indicators and their effect on the economy or particular business sectors will lead to better price forecasts and better trades.

A student must understand how the securities that are exchanged on the market work. Traders must understand stock and option basics. In addition to the securities themselves, traders must understand the different stock and option strategies available.

BetterTrades teaches that there are three basic types of analysis that help determine the movement of stock prices.

The first is fundamental analysis, which involves understanding the company in order to determine the true value of the stock. If the calculated stock price is above market than buying that stock leads to profit as the market price moves toward true value. Conversely, a stock that trades above its implicit value should be sold because the long term prospect is that price will fall. In the long term the correct application of fundamental analysis will lead to better trades.

Technical analysis involves making predictions about the future of stock prices by analyzing past price patterns. BetterTrades believes that each stock has a clientele that trades it. It is the personality of the people that regularly trade the stock that will determine future stock prices. Being able to chart past trends and see these patterns forming again leads to finding possible trading opportunities.

Practical analysis involves using the news to determine price movements. News can have a significant effect on stock price. Favorable news will often lead people to buy, which leads to price growth, and bad news will often lead people to sell which leads to price declines. Being able to stay on top of the relevant news about a certain stock is also very valuable in making better trades.

In order to conduct these types of analyses most traders use some type of trading tool. Whether it is a charting tool to analyze past prices, forecasting tool to analyze company value, or some type of news feed to stay on top of relevant news, trading tools can be valuable in finding trading opportunities.