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20091117

Buy When There's Blood In The Streets
Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets."

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."

This is contrarian investing at its heart - the strongly-held belief that the worse...

by Guest - Comments: 0 - Views: 1285
20091117

Finding Profit In Troubled Stocks
Contrarian investors will tell you that the biggest profits come from buying beaten down stocks that eventually turn around. But investing in companies that have seen their share price plummet can be tricky and full of risk; after all, a lot of companies that fall down never get back up.

Spotting a troubled company with the potential to right itself can indeed be profitable. Consider Hilton Hotels (HLT). In late 2001, terrorism fears had an adverse effect on the travel and hotel industries. Its stock value collapsed. But this proved to be a superb...

by Guest - Comments: 0 - Views: 703
20091117

The Basics Of The Bid-Ask Spread
You've probably heard the terms spread or bid and ask before but you may not know what they mean or how they relate to the stock market. The bid-ask spread can affect the price at which a purchase or sale is made - and an investor's overall portfolio return. What this means is that if you want to dabble in the equities markets, you need to become familiar with this concept.

Supply and Demand
Investors must first understand the concept of supply and demand...

by Guest - Comments: 0 - Views: 2195
20091117

How can I prevent commissions and fees from eating up my trading profits?
First off, understand that there is no universal system regarding trading commissions charged by brokerage firms. Some charge rather steep fees for each trade, while others charge very little, depending on the level of service they provide. A discount brokerage firm might charge as little as $10 for a common stock trade or even less, while a full-service broker might easily charge $100 or more per trade.

In these cases, the answer to this question actually has more to do with the amount of money you invest in each trade than it does with how often you trade. If, for example,...

by Guest - Comments: 0 - Views: 1079
20091117

How To Outperform The Market
All investors must reevaluate and refine their investing styles and strategies from time to time. As we gain investing experience and knowledge, our view of the commissions are placed on every trade and, since these commissions are an expense, they eat into the trader's return. Because every trade costs money, a trader must be confident in his or her decision: to achieve profits, the return of a trade must be well above the commission. If a trader is not sure of what he or she is doing and ends up trading more frequently because of blunders, the brokerage costs will...

by Guest - Comments: 0 - Views: 964
20091117

Cyclical Versus Non-Cyclical Stocks
Investors cannot control the cycles of the economy, but they can adjust their investing practices with its ebbs and flows. Adjusting to economic transitions requires an understanding of how industries are characterized by their relationship to the economy. It's important for you to know the fundamental difference between sin" industry and may be unethical for some investors, it does have the characteristics of a non-cyclical sector.

Conclusion
Learning how to predict economic cycles is not within the scope of this article,...

by Guest - Comments: 0 - Views: 3342
20091116

Finding Success Where Indicators Fail
There was a time not too long ago when technical indicators worked just like they were supposed to. Momentum divergences foretold trend changes. Volume kept pace with rallies as they rumbled on. Breakouts from patterns either resulted in immediate rallies for us to buy or, in the worst-case scenario, they failed right away for a quick stop out and a small loss.

In January and early February of 2007, the stock market sported every divergence in the book but kept chugging higher. Pattern breakouts occasionally failed, shaking many traders out before the stock took off.

However,...

by Guest - Comments: 0 - Views: 657
20091116

Retracement Or Reversal: Know The Difference
Most of us have wondered, at some point, whether a decline in the price of a stock we're holding is long term or a mere market hiccup. Some of us have sold our stock in such a situation, only to see it rise to new highs just days later. This is a frustrating and all too common scenario, but it can be avoided if you know how to identify and trade retracements properly.

What Are Retracements?
Retracements are temporary price reversals that take place within a larger trend. The key here is that these price reversals are temporary, and do not indicate a change...

by Guest - Comments: 0 - Views: 1158
20091115

Support And Resistance Reversals
Many traders who use technical analysis often hear phrases that suggest a "broken support level will become a future area of resistance" or that a "previous level of resistance will become a support". For beginner traders phrases like this sound like they're spoken in another language, and even many experienced traders never fully understand or appreciate this intriguing role reversal. This article will attempt to shed light on the importance of support and resistance and illustrate why traders should take note when they reverse roles.

Support and Resistance...

by Guest - Comments: 0 - Views: 702
20091115

Profiting From The Squeeze
You'd be hard-pressed to find a trader who has never heard of John Bollinger and his namesake bands. Most charting programs include Bollinger Bands - of all technical indicators - but although these bands are some of the most useful if applied properly, they are also among the least understood. One good way to get a handle on how the bands function is to read the book "Bollinger on Bollinger Bands", in which Bollinger himself explains the whys and wherefores of using the bands.

According to Bollinger, there's one pattern that raises more questions than any other aspect of Bollinger...

by Guest - Comments: 0 - Views: 1785
20091115

The Anatomy Of Trading Breakouts
Breakout trading is used by active investors to take a position within a trend's early stages. Generally speaking, this strategy can be the starting point for major price moves, expansions in volatility and, when managed properly, can offer limited downside risk. Throughout this article, we'll walk you through the anatomy of this trade from start to finish and offer a few ideas to better manage this trading style.

What Is a Breakout?
A breakout is a stock price that moves outside a defined support or resistance level with increased volume. A breakout trader enters...

by Guest - Comments: 0 - Views: 856
20091115

Gauging Support And Resistance With Price By Volume
Many say that charting is nothing more than predicting the direction of a price between significant support and resistance levels. We know that a support level is a price level which a stock has had difficulty falling below. This is where a lot of buyers tend to enter the stock. Similarly, we know that resistance is a price level above which a stock has difficulty climbing. This is where a lot of buyers take profits and shorts enter. Typically, a stock's price will range between these levels until it breaks out or breaks down. Hundreds of different methods can be used to locate these areas of support...

by Guest - Comments: 0 - Views: 1730
20091115

Trading Psychology And Technical Indicators
When technical tools are used judiciously, their value cannot be overstated. And every time you apply a tool of technical analysis, you are calculating a consensus of bullishness or bearishness among all market participants.

For example, the moving average convergence-divergence (MACD) is simply a tool that measures shifts in consensus from bullishness to bearishness, and vice versa. Extending the basic MACD to a deeper level, we find the MACD-histogram, which is actually a tool for determining the difference between long-term and short-term consensus of value. The measure tracks the...

by Guest - Comments: 0 - Views: 706
20091115

Support & Resistance Basics
The concepts of support and resistance are undoubtedly two of the most highly discussed attributes of technical analysis and they are often regarded as a subject that is complex by those who are just learning to trade. This article will attempt to clarify the complexity surrounding these concepts by focusing on the basics of what traders need to know. You'll learn that these terms are used by traders to refer to price levels on charts that tend to act as barriers from preventing the price of an asset from getting pushed in a certain direction.

At first the explanation and idea behind...

by Guest - Comments: 0 - Views: 775
20091115

Trading on Support
Typically we can assume that only a handful of winning positions are going to generate the majority of your profits. There are certain lucrative trades that are naturally going to be home runs, and these are the ones that you want to be sure to ride for as long as possible. At the same time you want to ensure an appropriate level of discipline in your decision making, preventing you from lingering unnecessarily in a losing position. To ensure the very best exit strategy, you can manage your trailing stops point by point according to the level of technical support garnered by your position. (See...

by Guest - Comments: 0 - Views: 669
20091115

Momentum Indicates Stock Price Strength
Momentum is perhaps the simplest and easiest oscillator to understand and use. Momentum is the measurement of the speed or velocity of price changes. In "Technical Analysis of the Financial Markets", John J. Murphy explains:

"Market momentum is measured by continually taking price differences for a fixed time interval. To construct a 10-day momentum line, simply subtract the closing price 10 days ago from the last closing price. This positive or negative value is then plotted around a zero line. The formula for momentum is:

by Guest - Comments: 0 - Views: 1114
20091115

Divergence: The Trade Most Profitable
Because trends are composed of a series of price swings, momentum plays a key role is assessing trend strength. As such, it is important to know when a trend is slowing down. Less momentum does not always lead to a reversal, but it does signal that something is changing, and that the trend may consolidate or reverse.

Price momentum refers to the direction and magnitude of price. Comparing price swings helps traders gain insight into price momentum. Here, we'll take a look at how to evaluate price momentum and show you what divergence in momentum can tell you about the direction of a...

by Guest - Comments: 0 - Views: 751
20091115

Divergences, Momentum And Rate Of Change
Oscillators tend to be somewhat misunderstood in the trading industry, despite their close association with the all-important concept of momentum. At its most fundamental level, momentum is actually a means of assessing the relative levels of greed or fear in the market at a given point in time. Markets ebb and flow, surge and retreat - the speed of such movement is measured by oscillators.

Oscillators are most useful and issue their most valid trading signals when their readings diverge from prices. A bullish divergence occurs when prices fall to a new low while an oscillator fails...

by Guest - Comments: 0 - Views: 1390
20091115

Momentum and the Relative Strength Index
Every book dealing with the subject of technical analysis devotes at least a couple of chapters discussing both momentum and relative strength index (RSI).

For those of you not familiar with price momentum and the relative strength index, you need to know that J. Welles Wilder first wrote about the subject in the classic "New Concepts In Trading Systems".

To understand how these two indicators can be used together, we must first for a moment review each of them. Momentum is the measurement of the speed or velocity of price changes. In "Technical Analysis of the Financial...

by Guest - Comments: 0 - Views: 708
20091115

Trading On News Releases
One of the great advantages of trading currencies is that the forex market is open 24 hours a day (from 5pm EST on Sunday until 4pm EST Friday). Economic data tends to be one of the most important catalysts for short-term movements in any market, but this is particularly true in the currency market, which responds not only to U.S. economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to inform...

by Guest - Comments: 0 - Views: 652
20091115

Riding The Momentum Investing Wave
On paper, momentum investing seems less like an investing strategy and more like a knee-jerk reaction to market information. The idea of selling losers and buying winners is seductive, but it flies in the face of the tried and true Wall Street adage, "buy low, sell high." In this article, we'll look at momentum investing and try to test its validity as an investing strategy.

The Father of Momentum Investing
Though not the first momentum investor, Richard Driehaus took the practice and made it the strategy he used to run his funds. His philosophy was that more money...

by Guest - Comments: 0 - Views: 752
20091115

Getting Confirmation with the Momentum Strategy
How many times have you decided to invest in an industry and then spent the time, both fundamentally and technically, to research the industry's leading companies only to get cold feet when the time came to put in your buy order? The momentum strategy has been known to work well to overcome this obstacle.

Strategy Examples
The momentum strategy has a number of examples from which to choose; the novice trader is wise to study as many of these examples as possible to develop a sound footing for future buying programs. Here are a few examples:
by Guest - Comments: 0 - Views: 580
20091115

Introduction To Trading: Momentum Traders
In momentum trading, traders focus on stocks that are moving significantly in one direction on high volume. Momentum traders may hold their positions for a few minutes, a couple of hours or even the entire length of the trading day, depending on how quickly the stock moves and when it changes direction.

Reviewing Different Types of Traders
Before we focus on momentum trading, let's review all the major styles of equity trading:
- Scalping - The scalper is an individual who makes dozens or hundreds...
by Guest - Comments: 0 - Views: 624
20091115

Momentum Trading with Discipline
To engage in momentum trading, you must have the mental focus to remain steadfast when things are going your way and to wait when targets are yet to be reached. Momentum trading requires a massive display of discipline, a rare personality attribute that makes short-term momentum trading one of the more difficult means of making a profit. Let's look at a few techniques that can aid in establishing a personal system for success in momentum trading.

Techniques for Entry
The impulse system, a system designed by Dr. Alexander Elder for identifying appropriate entry points...

by Guest - Comments: 0 - Views: 880
20091115

What is Black Monday?
Monday October 19,1987, is known as Black Monday. On that day, stockbrokers in New York, London, Hong Kong, Berlin, Tokyo and just about any other city with an exchange stared at the figures running across their displays with a growing sense of dread. A financial strut had buckled and the strain brought world markets tumbling down.

In the United States, sell orders piled upon sell orders as the Dow shed value of nearly 22%. There had been talk of the U.S. entering a bear cycle, but the markets gave very little warning to the then-new Federal Reserve Chairman Alan Greenspan. Greenspan...

by Guest - Comments: 0 - Views: 588
20091115

Panic Selling - Capitulation Or Crash?
There tends to be a lot of talk about "investor capitulation" when stocks continue to tank. But what is meant by capitulation in Wall Street terms and what does it mean for future stock trends? This article will discuss both.

Capitulation is defined in the American Heritage Dictionary as the following:

ca·pit·u·la·tion (n)

1. The act of surrendering or giving up. Surrender.
2. A document containing the terms of surrender.

In Wall Street the term refers to the time when investors (all of them) sell...

by Guest - Comments: 0 - Views: 741
20091115

The 5 Biggest Stock Market Myths
When fiascos like the Enron bankruptcy, auditing scandals and analysts' conflict of interest occur, investor confidence can be at an all-time low. Many investors are wonder whether or not investing in stocks is worth all the hassle. At the same time, however, it's important to keep a realistic view of the stock market. Regardless of the real problems, common myths about the stock market often arise. Here we go over these myths in order to bust them.

1) Investing in stocks is just like gambling.
This reasoning causes many people to shy away from the stock market....

by Guest - Comments: 0 - Views: 1281
20091115

Traders: Profit From Other Investors' Fear
It can be said that to trade effectively, one has to understand that markets are filled with an extremely large number of market participants, along with their hopes, fears and thoughts - both rational and irrational. As traders, we are ultimately trading people and not stocks. It is people and their thoughts and expectations that push a stock to support and resistance. Fundamentals don't move stocks in the near term, it is people's expectations that do. A stock can have a 3% move in a day without any change in the underlying fundamentals. Money, and the thought of making or losing it, has a way...

by Guest - Comments: 0 - Views: 567
20091115

Introduction To Types Of Trading: Scalpers
One of the most confusing aspects of the trading profession is there is no single definition of "trader". Traders come in many different shapes and sizes, colors and varieties.

Traders generally focus on a specific class of security, mostly common stocks, but they may also trade equity options, commodity futures, decimalization, whereby stock prices that were previously quoted in fractions are now quoted in decimals. With fractions, scalpers were always aiming for at least a sixteenth of a point in profit, also known as a teenie, equating to 6.25 cents per...

by Guest - Comments: 0 - Views: 575
20091115

Day Trading: An Introduction
Day trading is defined as the buying and selling of a security within a single trading day. This can occur in any marketplace but is most common in the foreign-exchange ([i]Back testing - This allows traders to look at how a certain strategy would have performed in the past in order to predict more accurately how it will perform in the future (although past performance is not always indicative of future results).

[/i]Combined these tools provide traders with an edge over the rest of the marketplace. It is easy to see why,...

by Guest - Comments: 0 - Views: 564

20091115

What Can Investors Learn From Traders?

The first rule of investing is buy low and sell high. After all, that's the only way you can actually make any money in the market. Nearly all investing game to prevent logic and reason from working all the time. Traders don't need sound logic to be profitable; they just need to know when a stock is rising or falling.

If an investor uses sound logic to buy a stock and the stock sinks anyway, that same investor is apt to internalize the idea that he or she is inadequate as a stock-picker. Or worse, that investor is apt to hold onto a loser, allowing ego to convince him or her that the...

by Guest - Comments: 0 - Views: 541

20091115

Quit Your Job To Trade Stocks?

Trading is often viewed as a high barrier-to-entry field, but this is simply not the case in today's market. Now, anyone with ambition and patience can trade, and do it for a living, even with little to no money. Sound fantastic? It is, and there are so many options available to people with the desire to put in the time to learn.

The New Era of Trading
Changes in technology and increasing volumes on the exchanges have brought about a number of very low barriers-to-entry trading-careers. In some cases no personal capital is required,...

by Guest - Comments: 0 - Views: 599

20091115

Would You Profit As A Day Trader?

Market timing attempts to predict the direction of future market movements in order to buy low and sell high. It is a strategy that most professional Value investing is a clear example, as the strategy is based on buying stocks that trade for less than their intrinsic values and selling them when their value is recognized in the marketplace. Most value investors are known for their patience, as undervalued stocks often remain undervalued for significant periods of time.

To Time or Not to Time?

by Guest - Comments: 0 - Views: 556

20091115

The Memory Of Price

fakeout double top setup might work:

Once the price has exceeded the prior swing high, do nothing until price shows a sign of weakness with a red candle - which indicates a drop in price for that day.
Measure the amplitude of the preceding retrace segment from the segment's swing high to its lowest low.
Add the value of the length of this segment to the most immediate swing high and make that your stop.
Initiate one-half of your position at...

by Guest - Comments: 0 - Views: 629

20091115

Mastering Short-Term Trading

Short-term trading can be very lucrative, but also risky. It can last for as little as a few minutes to as long as several days. To succeed at this strategy, traders must understand the risks and the rewards of each trade. They must not only know how to spot good short-term opportunities, but also must be able to protect themselves from unforeseen events. In this article, we'll examine the basics of spotting good short-term trades and show you how to profit from them.

The Fundamentals of Short-Term Trading
Several basic concepts must be understood and mastered for...

by Guest - Comments: 0 - Views: 1859

20091115

Introduction to Swing Charting

With the strong channels – These can be developed by connecting consecutive highs and consecutive lows. This can help predict prices, place moving take-profit and stop-loss points, or help you liquidate or add to a position in a timely manner. Placing lines that connect highs to highs and another connecting lows to lows creates a channel through which the price moves.

Conclusion
Swing charts offer an easier way to view trends by removing market "noise" and the time factor. They can be used in conjunction with several forms...

by Guest - Comments: 0 - Views: 862

20091115

Multiple Time Frames Can Multiply Returns

In order to consistently make money in the markets, traders need to learn how to identify an underlying trend and trade around it accordingly. Common clichés include: "trade with the trend", "don't fight the tape" and "the trend is your friend".

Trends can be classified as primary, intermediate and short term. However, markets exist in several time frames simultaneously. As such, there can be conflicting trends within a particular stock depending on the time frame being considered. It is not out of the ordinary for a stock to be in a primary uptrend while...

by Guest - Comments: 0 - Views: 545

20091115

The Daily Routine Of A Swing Trader

Swing trading combines fundamental and technical analysis in order to catch momentous price movements while avoiding idle times. The benefits of this type of trading are a more efficient use of capital and higher returns, and the drawbacks are higher commissions and more volatility. Swing trading can be difficult for the average retail trader. The professional traders have more experience, more leverage, more information and lower commissions; however, they are limited by the instruments they are allowed to trade,...

by Guest - Comments: 0 - Views: 671

20091115

How To Break Bad Trading Habits

All traders should have a good trading plan. One of the worst bad habits a trader can have is trading impulsively and without any guidelines. Traders who take the time to make a trading plan are much more likely to succeed, but even with a plan in place we can develop bad habits. A trader will make impulsive trades even with their plan taped to the wall next to them. They may exit winning trades too quickly or let losses go longer than their plan states they should. In this article we will go into how we can change our bad habits. The process involves how we personally view our successes and failures,...

by Guest - Comments: 0 - Views: 566

20091115

Peak-and-Trough Analysis

invest it wisely. Learn, understand and execute.

by Guest - Comments: 0 - Views: 1351

20091115

Find Turning Points With Single-Day Patterns

Technical analysis has a reputation for being complicated and time consuming, but there are many quick techniques that can provide an easy starting point for further research. While single-day patterns should not be relied on exclusively, they can be extremely useful as an on-the-spot analysis to identify potential market turning points. This article will introduce three single-day technical patterns and show how they can be effectively used in everyday trading.

Filling the Void with Gaps
Gap days occur when...

by Guest - Comments: 0 - Views: 563

20091115

Short-, Intermediate- and Long-Term Trends

Simply put, short, intermediate and long-term trends are the three kinds of trends that we see each day in our study of technical analysis. "A trend is your friend", is just one of the sayings that have come out of the study of primary as well as investing.

by Guest - Comments: 0 - Views: 662

20091115

Find A Trend With The Partial Retrace

Identifying when a change in trend is occurring is one of the most important skills a trader can learn. There are several methods that can be used to identify a possible change in trend; however, one of the easiest to spot is the emergence of a new pivot point. While identifying a pivot must always be done in hindsight, one can examine clues on a chart to determine whether the probability of forming a new pivot is high. One technique is to watch for a partial retrace after a trading range has been established....

by Guest - Comments: 0 - Views: 567

20091115

Track Stock Prices With Trendlines

Uptrends and downtrends are hot topics among technical analysts and traders because they ensure that the underlying market conditions are working in favor of a trader's position rather than against it. Trendlines are easily recognizable lines that traders draw on charts to connect a series of prices together. The resulting line is then used to give the trader a good idea of the direction in which an investment's value might move. In this article, you'll discover how to use this tool. It won't be long before you're...

by Guest - Comments: 0 - Views: 636

20091115

Trading Trend Or Range?

Whether trading stocks, countertrend. (What is a countertrend after all, except a trend going the other way?)

Range True range traders don't care about direction. The underlying assumption of range trading is that no matter which way the currency travels, it will most likely return back to its point of origin. In fact, range traders bet on the possibility that prices will trade through the same levels many times, and the traders' goal is to harvest those oscillations for profit over and over again.

Clearly range trading requires...

by Guest - Comments: 0 - Views: 672

20091115

Simple Strategies For Capitalizing On Trends

There are two types of markets in which a trader will trade - a trending market or a sideways market. On any time frame, a trade may be held through both types of market, but it is when the trade is entered and in what type of market (trending or sideways) that determines its level of risk. Risk is simply the amount of price movement we would expect before we can say with some certainty the trade is not moving in our direction (at least for right now), and is moving because of factors beyond simple market noise....

by Guest - Comments: 0 - Views: 960

20091115

Let Your Intuition Guide Your Investments

We all rely on intuition to some extent. In our private lives, we don't question it, but in the investments are a combination of money, market and people-oriented things, you can draw on all possible resources. (Read Trading Psychology: Consensus Indicators for more.)

It is also important not to confuse intuition with prejudices and pure emotions. Not every first impression or spontaneous impulse should be interpreted as intuition, and even less so as productive and useful. And nowhere are unadulterated greed and fear more dangerous than the stock...

by Guest - Comments: 0 - Views: 515

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