A little help needed please

[SGParkinson]

Hi everyone.

I am interested in trading shares for a living. I have learned how to find a businesses fundamentals and read financial reports and I have dabbled in economics (only the basics mind you) and I do my own accounting for the business I have a share in. One day I will sell my share in the business as I primarily want to become a trader and investor in small businesses but that wont be for a few years yet, so I'm gathering as much knowledge as I can to give myself a better foothold.

One of the biggest questions I have is, how and where can I find out if a particular industry is growing more profitable and doing well? For instance I don't want to troll through massive amounts of businesses just to find a good prospect. I want to firstly find the industries that are doing well in a particular economy and then look at the businesses in that industry*

*same goes for the industries that aren't going to do well. I will always look for an opportunity to sell short too.

Are economic indicators the best option for this?

Thanks

 

[malaguti]

Are economic indicators the best option for this?
Thanks

your best best would be to look for the relative strength of sectors within the particular index you are looking at. Relative strength of the banking sector within the FTSE 100 for example, and then you want the relative strength of the individual equities within that sector.
immediately you have the best candidates, is the ones with the highest relative strength. reverse for shorts
that would be one suggestion

 

[SGParkinson]

your best best would be to look for the relative strength of sectors within the particular index you are looking at. Relative strength of the banking sector within the FTSE 100 for example, and then you want the relative strength of the individual equities within that sector.
immediately you have the best candidates, is the ones with the highest relative strength. reverse for shorts
that would be one suggestion

So basically look at the indexes and evaluate all the equities to basically see what's been doing well and not (is there a quicker way to do this?)? If let's say I identify a sector that's doing well in the FTSE, I suppose it stands to reason that the same sector will be doing well in a smaller index within the same country?

 

[malaguti]

So basically look at the indexes and evaluate all the equities to basically see what's been doing well and not (is there a quicker way to do this?)? If let's say I identify a sector that's doing well in the FTSE, I suppose it stands to reason that the same sector will be doing well in a smaller index within the same country?

Yes you should be able to do this for free somewhere, I personally have charting software that does it also. You'll be looking for the top performing sector in the FTSE100, or the top sector in the FTSE 250. I'd stick with these only if you are UK based.
Let me know if you have trouble finding a free service for those sectors etc outperforming the relevant index it resides in

 

[SGParkinson]

Yes you should be able to do this for free somewhere, I personally have charting software that does it also. You'll be looking for the top performing sector in the FTSE100, or the top sector in the FTSE 250. I'd stick with these only if you are UK based.
Let me know if you have trouble finding a free service for those sectors etc outperforming the relevant index it resides in

Ok that clears things up for me a lot. Thanks very much for your help

 

[counter_violent]

Heat maps.

 

[SGParkinson]

Heat maps.

Thanks for the post.

Just looked into heat maps and I think that by the looks of it, they are a fantastic tool that would save a lot of time. Are there options to see an industry performance over a matter of months or maybe years, rather than on a daily basis?

 

[timsk]

Just looked into heat maps and I think that by the looks of it, they are a fantastic tool that would save a lot of time. Are there options to see an industry performance over a matter of months or maybe years, rather than on a daily basis?

Hi SGParkinson,
I don't think you mention which country you'll be focussing on? For U.S. equities, I think the attached charts address your query: S&P sector ETFs
Market carpets (similar to heat maps): MarketCarpet: S&P Sector ETFs
Or, if you want charts of each sector: CandleGlance: Major Industry Groups 1

Alternatively, ShareScope are excellent (I've subscribed to them in the past) and will offer something similar for U.K. sectors - but you'll have to pay.
Tim.