Jo Shouoko's ascentism ~ Is analysis of the Nikkei Average necessary for day trading individual stocks? ~

Hello everyone. I’m Akiko Shiro, the Sparkling Chartist.

The Rugby World Cup is reaching its climax, isn’t it?

Because Japan hosted it, my fan spirit was also sparked.

In today’s Upwardism, I will continue answering your questions.

In my course, even when trading individual stocks, I tell students, “Let’s check the overall mood of the Nikkei 225 first, okay?”

A student asked me, “Why do we need to analyze the Nikkei 225 when trading individual stocks?”

Among readers of this article, there may be some who only analyze the stocks they are going to trade, right?

But checking the Nikkei 225 outlook is very important.

The Nikkei 225 can be regarded as an indicator representing the overall Japanese economy.

When the Nikkei 225 is weak, stocks that are going up are considered strong stocks.

When the Nikkei 225 is strong, stocks that are going down are considered weak stocks.

Of course, there are also stocks that move in tandem with a strong Nikkei 225.

In that case, which has a larger rise—the Nikkei 225 or the individual stock?

If you look at such aspects, your trading strategy for individual stocks changes, and the accuracy of your forecasts improves.

Are the correlations between the Nikkei 225 and individual stocks proportional, inversely proportional, or in sync?

What about the strength or weakness?

These are the kinds of questions I pay attention to.

If you don’t get bound by the movements of the specific stocks you own and instead look at the whole picture when trading, your perspective may broaden and your viewpoint may change.

I discuss this way of thinking in my videos.

Please take a look.