Sensex News

Mexican Stock Market

2009-09-02T20:45:00.003-07:00

Before we analyze the history of the Mexican Stock Market or Bolsa, let's first consider the strength of the Mexican Peso. Ten years ago, the MX Peso was worth 9.7 cents and today it's worth 9.5 cents; essentially unchanged. Even though the Mexican Peso is not fixed to the US Dollar, the Peso has held firm with the Dollar at a rate of approximately 10:1 during the past decade, trading in a range from $.088 US / MX Peso to $.111 US / MX Peso.

One of the most significant reasons for the firm currency in Mexico must be attributed to the policies of the new governing party that has been in control since 2000. Mexico has been governed by Harvard alumni during most of the time frame shown above and will continue under the same leadership for at least another four years. The PAN party, led first by President Fox and currently by President Calderon supports balanced fiscal trade, flat taxes, lower taxes, and free trade. Calderon's motto is to "Drive Mexico into the Future" which represents privatization, liberalization, political freedom, and market control of the economy. With these fiscal policies and close ties to the US and Canada, it's no wonder that the Mexican stock market has performed so well, advancing more than six-fold during the past decade.

The EWW fund consists of a large basket of Mexican stocks and trades on the American Stock Exchange. During the past 10 years, the gain of the S&P 500 has been less than 25% while the Canadian stocks advanced approximately 200% and the Mexican stocks a whooping 600%. If you were to average the gains over 10 years and compound them annually, the US stocks have gained at rate of 2% per year, the Canadian stocks at 7%, and the Mexican stocks at 20% per year.

Put another way, a $1,000 investment in the US after 10 years is worth $1,250 today, in Canada it's worth $3,000 and in Mexico it's worth $7,000! A gain of $6,000 in Mexico while only $250 in the US, i.e., 24 times as much! Just imagine, a $200,000 investment ten years ago compounded annually at 20% would now be worth about $1,400,000 or if the gain were taken out each year, you would have had a $40,000 per year income and would still have your original $200,000 principal. Keep in mind that you can live like a king in Mexico on $40,000 per year; even better if you're retired and have social security income to add to your investment gains!

Just recently, we have witness a very tenuous economy in America and a near crash of the US stock market which has affected all economies and stock markets throughout the world. While the US stock market has dropped by 15.4%, the Canadian market fell by only 6.6% and the Mexican market by a mere 4.7%, making it the second least affected market in the world. During the past decade, the Canadian Dollar has strengthened significantly against the US Dollar and the Canadian stock market has far outperformed the US market, falling off its recent highs by a much lesser extent. These facts combined with the cold winters in Canada, provide an explanation for why the Canadians continue to flood the Mexican real estate market.

We were among the first of the fortunate retirees to move to Puerto Vallarta, Mexico in 1997 and have ridden the entire economic wave of growth and prosperity. Not only have our investments in the Mexican Bolsa multiplied by a factor of six but our real estate investments have at least tripled in value.

During the past decade we have witnessed a construction boom in Vallarta and an ever increasing influx of retired North Americans as the population of Vallarta has exploded to 350,000 residents. We have seen a complete revamping of the city's infrastructure with new water treatment facilities, power distribution systems, new and improved roads and highways, a tripling of the size of the International Airport, a tripling of the size of the Marine Terminal, a huge new Bus Terminal, a huge modern Convention Center, etc. Along with the increased infrastructure, all of the "big box" stores including Sam's Club, Mega Wal-Mart, Costco, Home Depot, Office Supply, etc. have moved to Vallarta. A half a dozen new golf courses have been built, a number of new yachting marinas have been built and existing ones enlarged, and clubs for all other activities have sprung up throughout the town.

All of this growth has taken place in PV while the city managers have maintained the city's atmosphere of a quaint Mexican fishing village. The cobblestone roads, the sound of mariachis in the air, the colorful tropical flora and fauna, the magnificent sunsets, the beautiful beaches along the Banderas Bay shoreline, and the majestic Sierra Madre Mountains as a backdrop will always provide the feeling of being in Paradise. This continues to hold true while the explosive growth in Vallarta now provides the creature comforts and conveniences of a large modern city, i.e. the best of everything is available in PV where the average daily temperature from November through May is 73*F with virtually no rain.

In summarizing, if you're approaching the end of your career, retiring and investing in Mexico is worth your consideration. It was the best decision we ever made; one that we'll never regret after enjoying eleven years of fun and prosperity. At this time, we see very few signs of a slowdown in Puerto Vallarta and living conditions couldn't be much better; however, as they say in the investment community, "past performance is no guarantee of future results"!

Determine Stock Market Position

2009-09-02T20:45:00.001-07:00

When trading in the stock market, position sizing is where all the tools of money management come together. It’s perhaps the most important part of your stock market money management rules. Position sizing is simply deciding how much you are going to put into any one stock market trade. You can calculate your position size using the other tools of stock market money management, your maximum loss and your stop loss.

However, many stock market traders believe that they’re doing an adequate job of position sizing by simply having a stop loss in place. While this will tell them when to get out of a stock market position, and will, with a maximum loss, determine how much capital they’re risking, it doesn’t answer the question of how much or how many units they can buy.

If you have already calculated your maximum loss and your stop loss, you can take these values, and plug them into a formula that will calculate how many shares you can purchase without exceeding your maximum loss. Although it is simple, the formula I’m about to give you is extremely powerful. The number of shares for your position is equal to your maximum loss divided by your stop loss size.

You’re already familiar with what a maximum loss is; but may not be recognize the term stop loss size. A stop loss size is the difference between your entry price and your stop loss value. If you were to enter the stock market with a one-dollar trade and set your stop loss at 90 cents, the stop loss value would be the difference between your entry price and your stock price, ten cents. Once you’ve entered these values into the formula, you can calculate how many shares you should buy so that you never risk more than your maximum loss.

Let’s look at how the formula works in practice. If your trading float was $20,000, and you were risking 2%, your maximum loss would be $400. If your stock market entry price was one dollar, and your stop loss value was 90 cents, your stop size would be ten cents. Now, the number of shares is equal to your maximum loss divided by your stop size. In this example, you can purchase 4,000 shares. If this stock reaches your stop loss, and you have to exit the position, you know you’re not going to risk or lose more than 2% of your float, which is $400.

This formula ensures the safety of your trading float. A little finessing that some of my clients like to do is to class their brokerage fee as part of the maximum loss. You could do this by subtracting the stock market brokerage fee from your maximum loss. If the stock market brokerage fee was $40 for your return trip, subtract 40 dollars from your maximum loss. Instead of entering $400 into the formula, you’d now enter $360. Once this is computed out, you can determine how many shares you’d buy, and know that you had included brokerage as part of your maximum loss.

By setting your position size so that you follow the 2% rule, you’re using a strategy that will limit the size of your losses during losing streaks. When you experience a winning streak, your position sizes will grow in a similar manner. By changing the amount of capital you’re deciding to risk, you’ll change the characteristics of your risk to reward ratio. All of your stock market money management rules will work together to make your trading system as profitable as possible.

Tips for Stock Market Trading

2009-09-02T20:44:00.002-07:00

The internet is jam packed with so-called independent experts who claim that they made a fortune trading stocks. They are only too willing to share those tips with you for a price. Maybe you recognize the name of the expert, maybe you don’t. Which expert is right? Here are 10 tips common to the best stock market trading strategies.

1. Set financial limits. Dumping all your cash into a stock hoping for fast return is not investing. You might as well put that money on a horse in the fifth race and admit to gambling. Stock market investors decide how much money to put at risk before buying.

2. Buy low – sell high. That’s the tried and true formula for making money in the stock market. The problem is determining those points. No magic here, just plenty of analysis and research to achieve that simple yet elusive goal.

3. Price rules, value drools. The best research may show that a stock is undervalued or overvalued but the proof is in the price. For totally absurd reasons a stock price may rise or fall regardless of what you and the experts believe is the value. As with anything, the actual price is what people are willing to pay.

4. What goes up, comes down. Even a Cinderella stock on a wild ride to the top is headed back to the bottom when the clock strikes midnight. Online stock traders must get off with some profits before riding their pride to a crushing loss.

5. Change happens. Stocks are subject to directional swings that make no sense. The trends may show it or the change may be due to external events. Either way, smart online stock traders live with it and move on. Asking “why” is not as important as deciding “what now”.

6. Yield for Curves Ahead. Once a market move is evident, watch for the direction and duration of the trend. Generally a trend move during a bull market is more likely to be positive. A trend move during a stalled or bear market is more likely to be negative.

7. Says who? The internet is jam packed with stock market trading advice from software vendors, online trading firms, stock market newsletters, analysts and people who want to make money from you. How reliable is their advice? Keep a healthy skepticism about whose advice you use in making trading decisions.

8. Expertise is no substitute for Instinct. If technical tools alone made for success than the market would be packed with millionaires. Instinct leads the pack when analysis shows up a day late and a few dollars short.

9. The Efficient Market does not exist. The Efficient Market Hypothesis is a myth. The idea that the stock market will benevolently work itself out from peaks and valleys to a level playing field only works in textbook models of capitalism.

10. Be True to Your School. Consistently apply your trading strategy. Flipping strategies only leads to confusion. If the latest hot tip does not fit your trading strategy, it’s not for you.

Trend in the Stock Market

2009-09-02T20:44:00.001-07:00

Everyone who has been trading even for only a short time has heard the adage the Trend is your Friend. If we are trading against the trend we are like salmon swimming upstream. However we should not only know the trend of the stock because a stock will often move in sympathy to how the overall indexes are moving. So first we must identify the trend of the indexes. Then ideally if we can find an industry moving in the same direction of the index we would like to pick a stock from that industry to trade. For example if the S&P is trending up and the overall banking industry is moving up we could purchase stock in Wells Fargo (WFC).

1.Identify the trend of the overall indexes (the S&P, Dow and Nasdaq)
2.Identify the trend of an industry.
3.Identify the trend of an individual stock within that industry.

How To Identify The Trend
There are many different ways to identify a trend. The method we use for determining the trend on an index or industry is looking at the Weekly Charts. When the market breaks above the highest high of the past 3 weeks then we say that the market is in an uptrend. If it has broken below the lowest low in the past 3 weeks then it is in a down trend.

For an individual stock we use the monthly charts and if it has broken above the highest high of the past 3 months then the stock is in an uptrend. If it has broken below the lowest low of the past 3 months than it is in a downtrend.

Technical Analysis Vs. Fundamental Analysis- Technical analysis is the study of price action and timing to enter the market. Fundamental analysis is the use of information about the company's financial condition to make investment decisions.

These are two different and often competing schools of thought where one school says that the other is wrong. At OptionSpreadTrades.com we believe that both schools are right, but give us different information. A useful way to think of it is the fundamentals will tell you Why a stock is moving and the technicals will tell you When the stock will move.

Technical Analysis
There are entire books written on technical analysis and it is beyond the scope of this course. Some of the tools that we use at OptionSpreadTrades.com are things like overbought and oversold indicators like Stochastics, Momentum indicators and Bollinger Bands, which are standard deviations to tell us when a market is going to reverse direction.

Fundamental Analysis
This school looks at things like price to earnings ratios, the amount of debt a company has, and earnings per share to determine the value of a company. It is important to look at both technical and fundamental factors when deciding which stocks to buy or short sell. Because if you buy a stock that is technically ready to move up it is better to purchase one that also has good fundamentals as well because this makes it likely that the stock will move up more than one that doesn't have good fundamentals.

Summary
1. Identify the trend of the overall indexes (the S&P, Dow and Nasdaq)
2. Identify the trend of an industry.
3. Identify the trend of an individual stock within that industry.
4. Technical Analysis tells you when a market will move
5. Fundamental Analysis tells you why a market move.
6. All of these factors are important for deciding which stocks to buy or short sell.

1929 Stock Market Crash

2009-09-02T20:43:00.002-07:00

The 1920s were a time of great financial prosperity. During the early part of the 1920s real estate is booming causing many people to get into the real estate bandwagon that was promising riches for everyone. Not only that but the stock market was going up to levels never seen before and this caused a frenzy of buying that everyone wanted to get into. It was such a high time of great speculation and investment that it was called the booming 20s.

If you had invested in real estate or the stock markets in the early part of the 1920s and got out by the middle of the 1920s you would've made a lot of money and been well off, but as with any boom people thought that the stock market was going to go up forever, but as we all well know nothing ever does, and the faster something goes up the quicker it will go down, but nobody could have ever predicted the crash of 1929. It was so sudden and so severe that it caught many people by surprise and left a large part of the investor population in bankruptcy. Let us analyze why this happened.`

One of the biggest problems during the boom time of the stock market is that brokers were so confident that stocks were going to keep going up that they were allowing investors to buy stock on margin. This meant that brokers were now allowing investors to borrow on top of their original investment to buy even more stock.

For example if I have $1000 and I wanted to buy $1500 of stock might broker would have lent me $500 on top of my original thousand dollars to reinvest into that stock. Brokers in the 1920s were allowing their investors to borrow on average of up to 66% on margin , and this was an unprecedented amount of margin that the market ever experienced. This was a very dangerous way to invest. When the stock market crash of 1929 happened within a three-day span.

Investors not only lost 100% of their investment but also the margin call on top of that, which meant that not only did many investors become broke, but on top of that they owed money which they could not hope to pay back. It had gotten so bad that many of the male investors had committed suicide to prevent themselves from paying back the money they all and also protecting their families. After the crash the New York Stock Exchange then implemented rules to limit the amount that a broker can lend to an investor on margin.

Another reason that the stock market crash so suddenly in 1929 is that short sellers were allowed to do short any stock no matter how hard it was going down. Shorting the stock means that you are selling a stock in the hopes that that stock will go down, and when it does go down you can buy that stock and pocket the difference. The short sellers smell blood when they saw that the market was crashing and they made out like bandits, but the effect that they had on the stock market is that they caused the prices of individual stocks to go down so fast and so hard that investors did not have a chance to sell their stock to get out of the market, because the market makers know that the stocks were going to go down and refuse to execute there buy orders. The New York Stock Exchange also make sure that this would never happen again by implementing the uptick rule. The uptick rule is essentially means that you cannot short a stock until there is a green uptick in its price, which means the stock has to go up before you can short it.

The market exchanges learned a a big lesson from the 1929 stock market crash and it saved them many times. For example the stock market crash of 1987 was a good size percentage drop but it was nowhere near the 1929 stock market crash and one of the reasons that the markets recovered very quickly in 1987 is the uptick rule. Short sellers can no longer make an easy buck from the panic and distraught of their fellow investors.

Russian Stock Market

2009-09-02T20:43:00.001-07:00

The majority of experienced investors will be fully aware of how poor the Russian stock markets performed in 2008. The Micex (the name of the country's benchmark index) fell an astonishing sixty percent from May to October 2008. The main stock exchanges were forced (by the country's regulator) to close for two consecutive days due to these staggering falls. That was then but things to day are some what different.

"The fight back has begun" shouted one trader, yes the Russian stock markets are fighting back and have had a decent start to 2009. Will this rise continue in the medium to long term? Well who knows? At the moment the people "in the know" are sounding very bullish about the future prospects and believe that there is money to be made.

I was speaking over the weekend to an experienced financial adviser who told me that the Russian market was still trading at a discount of over forty percent to global emerging markets and that he was receiving regular requests from the "big players" within his client bank to start investing their money in the region.

I am not a financial adviser therefore please do not take what I write in this article as "financial advice". I am however a speculative investor who has been "gambling" on a Russian recovery for a while and I am planning to keep investing in the area for some time to come as I believe that the recovery has only just begun.

Watch this space and hopefully we will see a major Russian recovery, I just hope that it happens!

Poker and the Stock Market

2009-09-02T20:42:00.000-07:00

I was out of town this weekend in Southern NJ, Atlantic City to be exact. After finishing my business at the convention center, I traveled back to the newest casino, the Borgata where I was staying for the night. I don’t consider myself a gambler and have never enjoyed losing money at the tables. When I do gamble, my preferred games have always been craps and blackjack. Until recently, I had never played at a poker table in a casino environment but I enjoy the game of poker and have only played in backyard and basement games with old buddies. Many people consider the game of poker pure luck but this is not an accurate observation. Many factors run parallel with the game of poker and the game of stock market investing. Luck may play a part but rules, odds and money management are the largest components of the two entities.

When investing in the stock market, it is essential to have a sound set of rules or a system that has been tested in real time, no back testing or historical testing needed. After the system has been tested, the investor needs to follow rules in order to preserve capital and cut losses. The investor must also consider the odds of his/her stock making a gain or making a loss. Price objectives and targets should be a large part of every investor’s system. With proper money management and calculated expectancy, the investor should aim to trade only in situations where the odds are in his/her favor. In a strong bull market, it may not be wise to start shorting many stocks; the odds of making a big gain with this strategy could be very low. Another major component that works its way into investing is psychology and/or human emotion. Stocks are made up of human character traits, similar to the type of people that own them. Some stocks are risky and volatile while other stocks are conservative and predictable. The market repeats cycles and specific chart patterns because humans repeat their actions and character tendencies.

Now, back to the poker table; as I sat down and started to play, my first goal was to become familiar with the character traits of the players around me. With 10 players at the table, I had plenty of time to evaluate the people I was playing with, without risking a great deal of money. After several rounds of play, I was aware that the gentleman to my right would only bet high odd hands and would fold every other hand. He was very edgy and nervous and folded his cards with force when he was angry. The gentleman to the left would also play hands with high odds but I did see him call bets with some hands that were risky with lower odds. One gentleman across the table was the bluffer and always had a smirk on his face with a pair of dark glasses. I challenged this man on several occasions and paid to see his cards because I felt he had nothing. More times than not, I was right and still beat him with an average hand. I could go on but you understand the point I am trying to make: all poker players and investors bring their emotions to the table.

I won’t get into the exact rules of playing poker but I can tell you that only two players are required to bet per round while the other eight can view their first two cards without risking a cent. My game of choice is Texas Hold’em, the current craze across the country and one that excites me when I am in the environment. The two players required to bet represent the big and small blinds. If you are the dealer or anoy other players at the table, you can view your first two cards for free without an bet. If the hand is weak, you can fold and keep your gambling stake.

Here is where it gets interesting; if I have a decent hand, I can decide to call the larger blind and see the next three cards on the flop, which is still a low risk investment. If the flop doesn’t provide me with the cards I need, I can immediately cut my losses short by folding and wait for the next game. The same is true in investing; I can cut a loss short and wait for the next opportunity without risking the farm if I realize an immediate loss. If the cards are good and my probabilities of winning the hand are high, I can call the bet or raise the bet. A fourth and fifth card (the turn and the river) are placed on the table after the flop and betting continues with each round. Again, I can decide if I would like to call, raise or cut my losses short. The connection I am trying to make with investing in the stock market and playing poker relates directly to cutting losses short (capital preservation and money management) and my odds of winning the game (in the stock market this could be called expectancy).

In my opinion, the best game to play at the casino is $1-$2 no limit style. This means that the blinds are held to a minimum and it will only cost you a couple of dollars to see the flop in many cases. The “no-limit” aspect allows your upside potential to be unlimited which carries through to investing. If you cut losses short and ride your winner, the up-side potential in investing can also be unlimited, especially when using options (but that is for another discussion). Last night, I could see my first two cards for free, eight out of every ten hands and I could fold if they were no good. If they were good, I put money on the table after my idea. In the real world, the world of stock investing, you should always put money after your best ideas. The ensuing gain or loss will tell you if you are right. Again, for the umpteenth time in this article, the most important part of both games is cutting losses short and moving on without mixing emotions into the decisions.

All investors and poker players bring emotions to the table, some people control them better while other people employ better systems and understand the odds on a higher level. The bottom line is to understand the situation around you and to use a sound system to raise your odds. Never bet a hand that represents a low chance of winning and never ride a loss that could multiply overnight. Cut losses short and get out of the game and wait for the next opportunity because they are always around the corner.

Stock Market Strategies

2009-09-02T20:41:00.000-07:00

Investing in the stock market is something that many people do simply as a hobby, but some people have bigger dreams. So many people want to take investing a step further and gain their financial freedom through it. The problem most people have is that they have no idea how to build on their investments and make sustainable career out of it. I am going to show you a way to invest that allows you to build you gains up and finally get financial freedom.

The method I will be talking about is called trend investing. This is when you look for trends in a stock price. The trend can come in many forms. Some might be a stock price rising for three months and then dropping 20%. Another might be a stock price that slowly drops only to have a big increase suddenly. Either way, this information gives you the perfect information to invest at the perfect times.

Now, how does this method let us build up our investing into a career? Well, you see, a trend is called a trend because it happens over and over again. So, if you can invest in a stock based on a trend, then you can do it again with the same stock. So by writing down the stock and its trend, you now know when to come back and invest in it.

This allows you to mark down multiple trends and have tons of investment opportunities. What if you had 10 stock trends written down? You would always have a profitable investment just waiting for you!

Benefits of Penny Stocks and Trading

2009-08-16T22:56:00.001-07:00

Many people have begun to take a keen interest in penny stocks and this is really something you need to take into account when you are trying to get into the game of trading as fast as you can. Ahead of you lie several roads you can take, and based on the current economic crisis, you would probably want to get into markets with a good volume, activity, fluid and one that allows you to speculate from any channel.

Online trading has become one of the more popular ways to trade in the penny stocks market and now, any one with a casual interest to make money can actually hop on to the Forex market from the comfort of their own home. Apart from the initial learning period which everyone has to undergo, what you need to know is that you might just well be earning a steady and sustained income just from a few hours of work. One of the main benefits of the Forex market is that there is no geographical location or trading floor which you have to contend with.

One of the down sides of markets with physical trading floors is that they are bound by red tape and rules, and taxations specific to the country in which you are trading in. This is why the Forex market is so popular, because it moves from region to region, and all the trading can be done remotely and online. This is why you need to consider as much as you can about the Forex market, and also, you need to know that you can access their account from any place on the world. This also means that they are able to actually to trade in the currency pair of their choosing, in their regional conditions from anywhere in the world and this is the great advantage of the currency market.

Another good thing about the currency market is that it is a true over the counter market that is also a zero sum game. This means that you would be able to win, if you work hard enough. And this is what a market should be. Granted that the currency market is subject to the same degrees of volatility and unpredictability as any other market, it is a much easier market to maneuver when you know what you are doing. The benefits of penny stocks and trading is one that has been around for a long time, and all you need to do is to actually find out more about the currency market.

There are plenty of sites that are out there that allow you to find out as much as you can about the Forex market. One of the things you need to know about is that the Forex market has a wide support structure that allows you to actually come on with some help. No longer will you be drowning in a market out there to eat you alive, you will be in a market that gets you places and there are people who will help you.

Stock Trading Charts For Profit

2009-08-16T22:54:00.000-07:00

Stock trading charts are a vital part of any stock trader's armoury, and this article will give you 5 tips on how to use them for profit.

1. Only use charts to confirm what your research tells you.

Some traders boast that they can look at any chart and tell what it's going to do next. The only trouble is that they get it wrong nearly as often as they get it right. The factors that influence a stock's price can cause it to take off in either direction at any time, no matter what it has been doing recently.

Charts alone are treacherous. Even traders who use them extensively also have their ear to the ground to keep abreast of developments affecting the price of stocks they have a stake in. Learn as much as you can about the stock you're interested in trading.

Research the company, what it produces, what its main markets are, what problems it is facing, and what projects it has in the pipeline. This isn't too difficult as most of this can be found online. Once you've discovered stock that is under or over valued then consult the chart.

2. Interpreting chart patterns

Patterns on charts often exist only in the trader's imagination. Only give any weight to a pattern if it jumps off the chart at you. Don't try and impose any that aren't there. The main pattern to look for is a trend - higher lows or lower highs. If you can find just one or two established trends each week that you profit from then you'll do well.

Other patterns include the "head and shoulders", the "double top" and the "double bottom". If you see either of the first two on a recent chart then there's a strong probability that the current movement is generally downwards. The "double bottom" indicates that the price has probably reached as low as it's likely to go prior to moving up again.

3. Establishing resistance and support levels

These are imaginary lines on stock trading charts indicating where the price is unable to rise or fall further. They may not necessarily be horizontal - sometimes they can be shown to slant up or downwards. If the price is moving fairly rapidly towards such a line there is a strong possibility it will breach that line and move into a new trading range. Often the line breached becomes its opposite, i.e. resistance becomes the new support, or support becomes the new resistance.

If the price is moving slowly towards such a line it's a sign that the price will probably not move much further in that direction and is more likely to reverse.

4. Deciding on your stop loss and profit taking levels

This is where a chart really comes into its own. If your stock market graph shows a clear trading range outside of which the price rarely goes, then you can set your stop loss and profit taking levels with confidence. This works with medium to long term trading only, where you have sufficient capital to afford sufficient stop loss levels. It can't be relied on in day trading, where stop loss margins are necessarily narrow and quick profits are sought.

5. Accept their limitations

If you accept that charts aren't a crystal ball to see into the future, but are simply an aid to making trading decisions, then you will avoid making the mistakes that unsuccessful traders make. Those mistakes are usually caused by greed and fear, the two predominant factors fueling price movements in the stock market.

In short, stock trading charts are a priceless asset to any successful financial trader provided you know how to use them and don't substitute them for doing your homework.

Best Stock Picker Review For Day Trading

2009-08-16T22:52:00.000-07:00

The reason I've put together this stock picker review is because there are so many options on the market today and I've had a number of friends ask my opinion on this technology and whether or not it works and who it works for, so I decided to put together this stock picker review based on my current favorite system. If you're new to the stock market, have been day trading for some time but aren't seeing the profits you'd like, or simply don't have the time to devote to day trading, you'll likely gain something very important in this stock picker review.

Day Trading Robot is a picker which analyzes market data and puts together a remarkably precise depiction of where the market will go next. It does this by exploiting the market's habit of evolving in patterns which repeat themselves every several years. It keeps massive past trend databases which it constantly appends and references to look for overlaps in contemporary market graphs.

By taking the past scope of the market into account every time it analyzes real time market data it can accurately predict how the market will behave as well as certain stocks in the immediate future. Once Day Trading Robot has made it's picks it notifies you so that you can trade accordingly with all that is left to do being enacting the trades.

Something I'd like to point out in this stock picker review of Day Trading Robot is particularly what separates it from the rest and makes it the best as far as my money goes. This picker focuses on penny stocks when generating picks, penny stocks which have a penchant of going on profitable jumps. Penny stocks are ideal stocks to target with a picker because of the simple fact that they are cheaper, more potentially influenced trades to make.

Because of their cheaper prices, it takes a great deal of less market activity to affect one of these stocks, making it possible for these profitable massive fluctuations. This is why you'll commonly see these cheaper stocks double or triple sometimes over the course of a few hours or a day. The trick is identifying those which are due to perform well and those which will remain static or devalue, hence using a capable stock picker like Day Trading Robot which is solely designed to target penny stocks.

For example, the first pick which I received from Day Trading Robot months ago was for a penny stock valued at 15 cents. I invested in that stock, not much, maybe around 1000 shares, and logged out of my account. I checked back in on it at the end of the day to find that that stock had jumped to 31 cents a share. I had just doubled my investment over the course of a day.

I wasn't used to this kind of activity, so I had to log out and back in to be sure I was reading it correctly. At this point I began checking in and out on that stock compulsively on the hour and watched as it continued to climb - there is no better feeling than that. Eventually it settled at 48 cents a share, hovered for a bit, then began to come back down. By the time I got out I had tripled my investment in a day and a half.

Canadian Stock Alerts

2009-08-16T22:51:00.000-07:00

My main attraction to any stock these days is purely in the volume of shares it trades that day. It's not complicated, as it tells me that very clearly there is serious trading activity in that one stock.

There is nothing worse than an illiquid stock, a stock that doesn't trade very many shares or some days doesn't trade at all. I avoid these at all costs as it becomes impossible to exit that stock easily. The only exception to the volume rule is a speculation play that I am prepared to wait on.

So what are Canadian Stock Alerts, for the most part they are only stocks that trade with strong volume, I am even more interested in stocks that trade with unusual volume, meaning far more shares being traded today than their normal daily average. When that happens, something serious is going on, and a great many new investors are also paying attention.

But sometimes you'll see a stock trading with an unusually high volume of shares and the stock is actually going down. Remember great volume means something, and Canadian Stock Alerts is only interested in volume. In many cases that stock that is going down, is actually just being pulled back or in fact oversold.

As I'm sure you'll agree, many times this has nothing to do with that stock itself. When the entire market pulls back it usually pulls everything back with it, especially if the previous day or two were both up days.

Example: On Monday a stock goes from $1.00 to $1.15 and on Tuesday it surges higher to close at $1.29, you know that sooner or later it'll give something back, after all it just climbed 30% in just two days. On Wednesday the entire market pulls back and our stock falls from $1.29 to $1.16 and it does so on huge trading volume. This becomes a huge alert for me personally.

Even Warren Buffet invests this way, buying certain stocks that have fallen out of favor, but are still value oriented stocks. It always makes sense to consider buying a value stock on the way down, as their value will rarely leave down for long.

It is the nature of the markets at work generally, the weak hands get out and everyone else is taking some profits off the table. This is as common as it gets.

That said, on Wednesday I'll usually find many Canadian Stock Alerts that can be great buying opportunities. Remember the stock isn't going down on bad news, it went down with the rest of the market. There's a huge difference here, the stock simply got sideswiped by the entire downward trend of the market.

Watching the heavy volume on the way down, you can usually see a levelling off point. Watch the bids on Level II and you'll see where there is a huge level of buying support on the bid side. That becomes our entry point.

These pull backs look and feel pretty dramatic, their rebound can look just as dramatic. Buying in at $1.16 and watching it climb back to $1.26 on a bad market day is not unusual at all. Now imagine that you bought 5000 shares, you could have netted $500.00 profit (minus commission) in one day.

Again, a volume trend is what we all need to pay attention to.

Techniques for Stock Market Analysis

2008-11-19T23:44:00.000-08:00

Two popular types of stock analysis include technical analysis and fundamental analysis. Technical analysis is a financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market data, primarily price and volume. Technical analysis in its purest form considers only the actual price and volume behavior of the market or instrument, on the assumption that price and volume are the two most relevant factors in determining the future direction and behavior of a particular stock or market.

Technical analysis is embraced by some and hated by others. It is widely used among traders looking for stock trades and deciding how to trade stocks. Technical analysts consider stock trends based on their chart and stock market close each day while completing stock technical analysis.

Technical analysts say that a market's price reflects all relevant information, so their analysis looks more at "internals" than at "externals" such as news events. Price action also tends to repeat itself because investors collectively tend toward patterned behavior – hence technicians' focus on identifiable trends and conditions.

When completing stock market analysis it’s important to consider stock market trends and look at the macro environment of the economy. One should study the stock indices and how they have performed lately and even years in the past by considering the stock chart of the market. Stock earnings can affect the stock market as a whole or just a few industries.

An industry that is hot could have many hot stocks within it and momentum stocks that could be very good stock ideas. Some investors decide to daytrade individual stocks that are hot and may trade up during one stock market session. It is important to do technical analysis when day trading. Investing should be considered risky and each investor needs to consider their risk tolerance.

Individual stocks can be undervalued stocks or bargain stocks that are cheap stocks. It is important to look at a stocks PE and other ratios that act as tools for investors. When considering the value of a stock, an investor needs to look at the company’s market capitalization or market cap to first have a point of comparison while researching stocks. Stock trends are also important to pay attention to as well as general stock market news for stock market analysis

Stocks trade on several exchanges including the NASDAQ, AMEX, NYSE, OTCBB and Pink Sheets. This is where buying stocks occurs by online brokers for their clients. Investors can look for value stock or any other kind of stock they want. It is important to find as much stock market information as possible to experience new information and facts.

There are many stock tips and penny picks out there that investors can start to build a stock list or screening NASDAQ and AMEX stocks with a stock screen for new stock ideas. There are lots of investment opportunities out there in the stock market.

Factors That Affect and Predict Stock Prices

2008-11-17T03:56:00.000-08:00

This is the most frequent question that most stock/options traders may have in their minds. Stocks price changes due to market forces, i.e. buying and selling of the available stocks in the market. The following are the factors that affect or even predict the buying or selling of stock that ultimately affects stock prices of companies.

· Market sentiment. The price of the stock of a company is affected most of the time by the general market direction during a session. In a bull market, the stock price of most companies will rise and in a bear market the stock price of most companies will fall. One can gauge the market sentiment by looking at stock indexes or its future price movement. The stock indexes are S&P 500, Dow Jones Industrial Index, Nasdaq (USA), ASX100, ASX (Australia), Nikkei 225 (Japan), Euronext 100, Euronext 150 (Europe Union), DAX, TECDAX (Germany), FTSE 100, FTSE All Shares, FTSE Techmark (United Kingdom.

· The performance of the industry. The performance of the sector or industry that the company is in also plays in part in determining the stock price of the company. Most of the times, the stock price of the companies in the same industry will move in tandem with each other. This is because market conditions will generally affects the companies in the same industry the same way. Of course, there are exceptions to this. Sometimes, the stock price of a company will benefit from a piece of bad news in its competitor if the companies are competing for the same target market.

· The earning results and earning guidance. The main objective of a company is to make profit. Therefore, investors and traders always assess a company based on its Earning Per Share (bottom line) and Revenue (top line) and its future earning potential. In US, companies generally report the earnings results every quarter-yearly. A company that achieves good earning results (EPS and Revenue) expects a boost in its share price and one that delivers poor earning result shall see a beating in its share price. Sometimes, besides reporting the EPS and Revenue for the past quarter, a company may also issue guidance (expected value) for the EPS and Revenue in coming quarter or coming years. This is also closely monitored by investors and is an important factor that will affect the company stock price.

· Take-over or merger. In general, a company being taken-over is anticipated to get a stock price boost and the company taking over another company shall experience a drop in its share price. This is assuming that the company is being taken over at a premium, meaning it is being bought over at a higher price than its last traded stock price. Depends on the agreed term, a company can be bought over by cash or stock (of the acquirer) or a combination of the two. In some minority cases, the stock price of the acquirer may get a boost if it is perceived that the acquisition shall contribute to its earning or revenue in the near future.

· New product introduction to markets or introduction of an existing product to new markets. The introduction of new product to market is seen as a revenue enhancer for a company. This also applies to an existing product that breaks into new markets. Sometimes, the prospect of a new product introduction suffices to improve the stock price of a company, this is often observed in surges in stock prices of pharmaceuticals companies after the announcement of successful clinical trials, or FDA approvals for new drugs.

· New major contracts or major Government Orders. A company that is able to obtain new major contracts or major government order is expected to see a bull run in its stock price. Those companies that fail in the contract bidding normally experience the fate of sell-off in its stocks.

· Share buy-back. The act of share buy-back by a company will reduce the number of share available in the open market. Due to the law of supply and demand, a reduction in share available for trading in this case will cause a drop in supply, this will normally help increase the share price. Also, the continuing buying back of share of a company will also acts as a support for the share price that helps to maintain or increase the share price. The investors may also see the share buy-back by company as a confidence booster for them in the company itself. Therefore, share buy-back is quite often used as a tool to deliver value to the investors.

· Dividend. After the announcement of a dividend. The stock price may increase by an amount close to the dividend per share value. However, the stock price may drop on the ex-dividend date by the dividend per share amount. This is because anyone buying a stock on or after the ex-dividend date are not entitled to the corresponding dividend payment.

· Stock splits. Stock split in theory, should not have an impact to the stock price. However, it is generally observed that the stock price increases (after taking into account the increase in the number of share) after a stock split. Some attributed to the better affordability of the stock after stock split, some attributed this to the perception of cheap stock due to the lower stock price after the stock split. Some however believes that stock split has no real impact on the stock price (effective stock price, taking into account the change in number of shares), as the stock price will increase regardless of stock split.

· Insider trading. Insiders include CEO, COO, CFO, Chairman, board directors etc, who has first hand information about the operations and the financial status of a company. Therefore, the buying or selling of stocks by these insiders may herald some good or bad news about the company. This is being watched closely by savvy stock investors/traders. However, do be aware that due to compensation package that comes in the form of stock or stock options, the insiders may sell their stocks/stock options to cash-in their compensation benefits. So in this case, it may not signal anything significant about the company. A savvy investor should know how to observe and filter out this piece of information from your investment or trading decisions.

· Investment Gurus / Hedge Funds trading. The investment decision of highly revered investment gurus like Warren Buffett, George Soros, Carl Icahn are closely monitored by investors and therefore will move the market. Hedge fund stock buying and selling are another source of information regarding the flow of "smart money".

· Analyst upgrade / downgrades. Analyst upgrade and downgrade to a stock may have positive or negative impact to the stock prices. However, one needs to be wary of the fact that quite often analysts' upgrades or downgrades happen "after" some important news about a company. For example following a extremely disappointing earning result, many analysts will likely to downgrade the company stock. So, it is very likely that by then the stock price of that company has already priced-in the poor earning result, and analyst downgrade may not have further impact to the stock price.

· Addition/Removal to/from Stock Index. Stock Index Fund are those funds that invest in those company stocks that are included in a particular stock index (e.g. S&P 500, Nasdaq-100, Dow Jones U.S. Large Cap etc.) . Therefore, an inclusion of a company stock to a stock index will generate buying interest in the stock for these stock index fund managers. The stock index fund managers will dispose of the stock that has been removed from the stock index.

· Others. These include news about new technology, patent approval, war, natural disaster, product recalls and lawsuits that shall have positive and negative impact to the relevant company stocks. The health or mishap of a key leader in a company may also affect the stock price of the company. Take a look at the recent news about Apple Computer.

Stock Market Rallies

2008-11-14T02:12:00.000-08:00

The stock market rallied on Friday and boy was the press upset. When I turned on my car radio I caught the market report near the end and I didn't hear the news about the stock market rally. All I heard was very depressed journalists reporting. They sounded so sad and upset. I said to myself, "oh no, what terrible thing is happening now! More miners trapped? Are more bridges falling down? No! Please don't tell me anything like that!"

So, what was this cataclysmic event that made these reporters so sad? Well, it turns out, the terrible thing was the stock market soared 233 points, and now, for the second day in a row the Dow Jones Average moved quickly and strongly upward. The day before this 233-point rise the stock market had fallen over 300 points in the morning, but then in the afternoon it turned around and rallied over 300 points!

This means the stock market moved up over 500 points in less than two days. The people who were reporting it were absolutely suicidal!

When I got home I turned on the television and caught the nightly news. The newsmen and women were almost crying. How terrible! The stock market rallied. They didn't even mention how high it went, they tried, but they choked every time they tried to say t-t-t-two. The best they could do was refer to it as a "triple-digit-gain."

I remember when a stock market rally was a positive event. It used to be everyone would be happy for those who were invested in the market when it rallied. Now, almost everybody, through 401(k) 's and such, has money invested in the stock market. So, you would think a stock market rally would be a joyful event.

Well, a stock market rally is a joyful event for normal people, but not for members of the press. Their hatred for George W. Bush overshadows all logic. They don't even realize they make fools of themselves when they make a stock market rally sound like a funeral march.

For the previous two weeks, the stock market had been plunging. The mainstream media had their hearts set on a full-fledged stock market crash. Oh! What joy! A stock market crash! Then they could all talk about how much the country needed a new direction! (Choke, gag, cough) However, much to their dismay, the Federal Reserve stepped in and lowered the discount rate. The stock market loved this move because it worked and the press hated it for the same reason.

Suppose after the 300 point drop on the day before the Fed move, the stock market had dropped another 300 points instead of bouncing back 300 points. Then the next day the Fed did nothing. Would the press have lauded that move? Of course not! That 's why the press wanted a stock market crash! Ripping anyone in the Bush administration is indigenous to their nature. It is when they're talking down from their imaginary perches situated high above George Bush that they are in their element. This is when they report with smiles on their faces.

So, it 's too bad for them. There was no stock market crash. Curses! It would have made their job of getting Hillary Clinton elected president a lot easier. Dow zero! Strike up the band! Happy days are here again! They're all just mainstream media dreams now.

I would like to thank Fed Chairman Ben Bernanke, he did a great job. I would also like to thank George W. Bush for having him on his team. Oh yeah, and I'd like to thank the press. It was great fun watching them. Boy! I can't wait until the day after we win the war!

Say Hello to Profits in Stock Market

2008-11-11T23:58:00.000-08:00

The stock market is like a gregarious, uncertain beast – you can never predict which turn it's going to take or which direction it is headed for. Having said that, let us also admit that the stock market is one of the most exciting markets in the world that can make your fortunes if you play it right.

And, if you want to play the stock market right, you have to figure out how it ticks. Here then are basics and fundamentals of a stock market that will clue you on:

What Is A Stock Market?

A stock market is a trading place where you can buy and sell stock (shares) issued by a company. Alternatively, you can also trade in several derivative products, which are basically financial instruments in the form of contracts, where the parties to the contract agree to exchange payments based on the value of a share at a future date.

Stock Market Trading Explained

Many individuals and entities trade in the stock market. Small investors, day traders who square up their transactions on the same day, investment/financial companies, banks, hedge funds, individuals with a high net worth, institutions, mutual funds – all are involved in stock market trading.

These individuals and entities place their buy or sell orders through a market intermediary, called the stockbroker. Majority of the transactions are routed through a network of computers that execute orders in a matter of seconds.

Stock Market Strategies

In the stock market, you can buy and sell the stocks you own. Besides this, there are several strategies such as short-selling, which means you do not own the stock, but sell it nevertheless (by borrowing it from your broker at a fee) because you feel its price is going to drop – and when the price does drop, you buy it back. Plus, you can buy or sell stocks at a future date if you trade in the derivatives market. Then, you can also indulge in margin buying, which in simple terms means you borrow money to buy stocks, thereby exposing yourself to debt.

Stock Market Index

The stock market index is a value, determined by the stock exchange authorities, that reflects the market's movement. This value is based on a handful of high-volume and reputed stocks – these are weighed and a number is given to them. This number or value fluctuates according to the movement in the prices of these stocks and this is what indices such as the Dow Jones, the NASDAQ, the S & P (Standard & Poor) are all about.

Methods That Influence Investment Decisions

There are two methods that can influence investment decisions in a stock market: (i) Fundamental analysis is a method, wherein the companies past and current performance is analyzed along with the factors that will affect its future profitability. Medium-long term investors invest on the basis of fundamental analysis. (ii) Technical analysis is another method that studies the correlation of price and volumes over a span of time and then gives a buy or a sell signal on the basis of this correlation.

There, those were basics of the stock market. If you want to trade successfully, then you have to understand how the stock market works, because there is no other way, no other shortcut. Happy trading.

Way To Build A List Of Penny Stocks

2008-11-10T03:21:00.000-08:00

Trading stocks on the Over the Counter Bulletin Board or Pink Sheet stock exchanges is probably the riskiest of all forms of trading. With the potential of astronomical gains, penny stocks have drawn many people into the world of speculation, often with disastrous results. Unfortunately, this happens more often than it should because one of the characteristics of penny stocks that draws people in, is their low share price. This fact alone is the number one factor why people that cannot afford to lose money in the stock market begin trading penny stocks; minimal cost per share.

However, trading penny stocks does not always equate to losing all funds in brokerage accounts. If a person, new to these stock exchanges, spends time acquiring knowledge and learning how micro-cap securities trade, they are on the way to potential profits. Implementing and testing a trading system designed specifically for trading penny stocks is the first piece of the puzzle. Once a sufficient amount of testing has been completed, finding potential securities to trade is the next step.

Building a list of penny stocks that have potential to increase in share price is difficult partly because companies trading on the Pink Sheet exchange are not transparent allowing investors to see financial statements and other aspects of the company. The Over the Counter Bulletin Board exchange requires companies to file Securities and Exchange Commission financial reports quarterly which allows for more transparency. This makes OTCBB stocks less risky than Pink Sheet Stocks. If at all possible, it is best to refrain from trading Pink Sheet stocks and focus on OTCBB securities until a complete understanding of penny stocks is attained.

It is best to first differentiate between varying sectors within the market itself and determine which sectors may be in favor when building a penny stock list. Once favorable sectors have been determined, it is time to begin screening potential stocks to add to the list. Investors and traders usually break down into two different groups, one being technical and the other being fundamental. Technical traders rely solely on charts, trading patterns, oscillators and various other indicators to determine which stocks to trade. Fundamental traders rely on the financial aspects of the company. Profit and loss statements, amount of debt, various ratios and ultimately the company bottom line. These two camps are uniquely different and seldom will you find a combination of both trading the larger exchanges with both being adherents to their methodology.

However, a combination of both camps is ideal for trading smaller stocks utilizing both methods when building a list of penny stocks. Fundamentally, acquiring as much information as possible about the company can give the trader an idea of the financial condition of the company and determine if they can implement their business plan. By reading chart patterns, support and resistance levels as well as other indictors can help the trader learn how the stock trades which helps determine the technical character of the stock.

Over time, the penny stock trader will learn which stocks have potential and which ones do not have potential. Eventually the trader will build a list of penny stocks that have the best possibility of gaining in value and will soon have a core of penny stocks that can be bought and sold many times over once the trader learns their fundamental and technical characteristics.

Tips for New Penny Stock Investors

2008-11-10T03:20:00.001-08:00

Many people who have never played the stock market game before start with penny stocks. Heck, even if you've been around investing for decades, penny stocks are still your ticket to triple, quadruple or even quintuple-digit gains. You just can't see those if you bet on the Dow.

The problem is penny stocks are a bit more difficult to research than their large blue chip cousins. To make this a bit simpler for first-time investors, here are 10 things to keep in mind when looking for solid penny stock plays:

1. Think Outside the Box

When it comes to penny stocks, some of the wackiest ideas have translated into serious gains for investors who were willing to think outside the box…

Back in the day, who would've thought that computers were the "wave of the future"? Early investors in companies like Microsoft and Yahoo, that's who! They made a bundle by thinking outside the box and betting on business models and technologies that were out of the ordinary.

There are new technologies and business models out there in the penny stock world today. Are you willing to think outside the box on your next penny investment?

2. Know What You Own

In the world of Wall Street, whether you're investing in penny stocks or blue chips, one of the biggest rules is to "know what you own." What does that mean?

You should know the company you're investing in inside and out. Know its business. Know how it makes money. Know its management.

But as important as this rule is for any investor, it's doubly important for investors in penny stocks! That's because with penny stocks, share prices can change quickly if you don't keep a handle on them.

So know what you own and your investments won't end up owning you.

3. Don't Get in Over Your Head

When you see a hot penny stock that's ready to take off, it can be hard to keep from cashing out your 401(k) to buy as many shares as you can…getting in over your head with penny stocks is an almost sure way to get burned.

Even though penny stocks can make you some serious money, they're volatile - and that means you shouldn't put more than 10% of your portfolio on the line.

What's the smart penny investor to do? Set up an account for just penny stocks and load it only with money you're prepared to lose.

4. Don't Be Afraid to Ask…

One of the beauties of penny stocks is the fact that they're smaller companies that are out there for smaller investors.

As an individual investor, a big multinational might not give you the time of day. That's usually not the case with penny stocks. In fact, it's not unheard-of for individual investors to pick up the phone and chat with a company's CEO or CFO on the spot.

If you've got a burning question about a penny stock prospect, e-mailing or calling the company's investment relations firm or corporate offices might be one of the most telling ways to figure out if that stock's for you.

5. Be a Skeptic

Remember when we said to think outside the box? Well, do that, but don't forget to be a skeptic…

Just because a company has an interesting new idea doesn't necessarily mean it's a good penny stock prospect for your portfolio. The key is…Do you think that it can monetize its idea?

If that answer isn't immediately clear, it's time to dig a little deeper into that company's prospects. Thinking outside the box is a great way to get innovative companies on your radar, but being a skeptic is the only way to make sure that translates into gains for your portfolio.

6. Think, Then Buy

When you're ready to buy shares of a penny stock, make sure you take a second to think about what you're doing. All too many first-time penny investors take the jump on just a few shares of a penny stock without realizing how much the size of their investment will affect their returns.

Think about it this way…You're an investor who sees an attractive stock for $1 per share. You don't have a large portfolio yet, and you don't want to take too much of a risk, so you buy just 50 shares for $50.

Turns out you picked a winner that made 40% in just a week - $20 of pure profit. You sell and rejoice in your penny stock success. But wait…is that celebration justified?

You're forgetting about those $10 execution fees you paid to buy and sell that stock. That's $20 altogether. Looks like you only broke even, despite the fact that you had a stellar stock.

When you're buying penny stocks, make sure you're buying a large enough quantity that account costs (like execution fees) don't eat up your profits. You can find out your minimum returns to break even with this:

Execution Fees/Stock Acquisition Price x 100 = Break-even Gain (Percent) Needed

7. Don't Get Greedy

Lots of penny stock investors see 200%, 500%, even 1,000% gains on a stock but still end up losing money in the end. It's not because they didn't plan their buys properly…it's because they got greedy!

It doesn't matter how much money a stock makes if you're not ready to press the button and realize those gains. That's why you need to set solid exit points for any penny stock you buy.

It's human nature to want to hold onto an investment as you see it climb with no end in sight, but doing that is a great way to miss out if that trend turns around. When you analyze an investment, think about a logical exit price and sell for that. Picking solid exit points will become easier as you develop your investing chops.

8. Don't Get Too Nervous

The flip side of getting greedy is getting nervous with stocks that are seeing major gains in short periods of time. Relax. As a penny stock investor, you've got to be ice-cold when you see one of your picks take off.

Again, it comes down to picking good exit points for your investments. If you're sure that your stock is bound to start losing ground before you hit that target price, maybe it's time to re-evaluate what that price should be.

Remember, you can reanalyze your targets anytime, but you should never make trades on emotion alone.

9. Be Realistic

While investors might hope for tripe-digit gains on every pick they make, even the most seasoned pros of the investing world make bad picks from time to time. That's why having realistic expectations is so critical.

As with picking the right target prices, knowing what kind of gains to expect comes with experience as a penny investor. It's tricky to know when you should expect 20% from a stock and when you should expect 200%.

But setting those realistic expectations now, from the get-go, will get you into a habit that will help you structure your portfolio in a way that will get you the most bang for your investment buck.

10. Be Ready for the Next One

It's easy to sit back and relax after you've just made a trade - especially if you banked a nice gain. But not so fast!

As much as you might want to bask in your investing success, fight that urge.

The secret to the penny stock game is to always be on the move. Always be on the lookout for that next penny powerhouse - the next one might just be your best yet.

The Stock Market Drop

2008-11-05T19:22:00.000-08:00

Imagine your friends laughing when you say you made a lot of money as the stock market dropped. Then imagine their faces when you show them your incredible gains. They won't laugh any more. They'll beg for help.

Everybody loves it when the stock market goes up. Many people panic when it falls. But they don't need to. An American market exists that allows traders to make money regardless of whether stocks are going up or down.

Professional investors know how to hedge their bet. They take precautions because they know the economy will move through various cycles. What goes up will eventually come down.

The common man and woman are different. They assume investing is difficult so they don't take time to learn simple methods that might benefit their lifelong effort to get ahead. They throw their money into mutual funds or a 401-K account and hope for the best. This may work when things are going well in the financial markets. In a crisis, this method will be the cause of many a sleepless night.

Every family could use some extra money each month. And it's not a pipe dream, if you are capable of taking simple direction and absorbing new information.

Here's how you to make money when the stock market falls: hedge your bet by trading the mini-sized Dow Jones futures market. I know what you're thinking. Futures?! Isn't that a great way to lose money? My answer: Have you ever lost money in the stock market?

Today's economic conditions should be a reminder that our money is always at risk. Yesterday's victories may be tomorrow's defeats. All the more reason to hedge - always - your most important investments.

The mini-sized Dow Jones electronic market is global and stays open for business throughout the night and into the next day. It closes briefly at the end of each business day, all day Saturday, then opens again late Sunday afternoon. Plenty of time to access and manage your online account.

One significant reason for learning this market is its simplicity. You can learn to trade the market up and down - and it's all legal. For people who have only traded stocks, it is sometimes difficult to understand how a futures trader can make money when a market drops. But it's true, it can be done, without breaking any laws.

This is not true of some "short selling" that takes place in the stock market. Some rogue brokerages break Securities and Exchange Commission rules and in the process rob good, honest investors. That is not what I'm suggesting. But that illegal practice is precisely why you would be wise to learn how to hedge your stock portfolio with the mini-sized Dow Jones futures market.

There are many tutorials to help you understand how to trade this market. Google "mini-sized Dow Jones" or "the mini-Dow" and you'll have plenty to choose from.

But don't fall for offers that ask you to pay big bucks for software and platforms you won't need. I'm not suggesting you day trade - not at first anyway. So choose a guidebook that is modestly priced and then learn as much as you can from it before buying your next book.

The Chicago Board of Trade and the CME Group Exchange websites offer good, free information to help you understand the basics of trading futures. Take full advantage.

Finally, be a specialist. Master the one market that can do you the most good. The mini-sized Dow Jones stock index will be enormously beneficial if you have long-term or short-term stock investments. You'll soon realize that by concentrating on one market you don't have to be Warren Buffet to make smart moves.

Best Stock Trading Software

2008-11-03T00:35:00.000-08:00

This post covers a topic that has recently moved to center stage--at least it seems that way. If you've been thinking you need to know more about it, here's your opportunity.

Since the advent of the internet and more powerful personal computers, many stock players have been looking for the best stock trading software that the market can offer. After all, what a better way to analyze the market with an online stock trading software? Capable of calculating all the important indexes and show you, in a single screen and at full color, which shares should you be considering. But, are they worth your time and money?

Let's dig in to find more.

Stock Trading Software

Right now, there are more than 200 hundred stock exchange markets in Earth. These organizations trade the shares of thousands of companies around the planet. Ergo, they produce huge quantities of information. If you really want to be connected to the world, how are you going to master all this data?

If you try to do it, you will find that it is an impossible task. There are too many variables to consider, and the human mind isn't prepared for that level of information. The only way to do it is with a online stock trading software. Today, personal computers have enough power for processing these amounts of information. So, for the first time in history, people can look at stock markets of any part of the world and analyze it's movements.

Benefits Of Stock Trading Software,/b>

The main benefit is that you are going to save enormous amounts of time. You will not have to spend hours behind the Yahoo or Google stock pages, or with the newspaper, interpreting the data. A stock trading software will download all the information that you need and in no time you will find yourself with all the processed data that you require for making the right choice.

The second benefit is that it will show you cold numbers. That means that you won't be a victim of your emotions. We are humans, and there is no way in which we can detach our emotions from our decisions. Since the stock trading software package doesn't have emotions, it will tell you nothing but the truth.

The final benefit is that you will be able to broaden your portfolio, making it more secure. That way, if the stock market of a determined country falls down, you won't be very affected. With the best stock trading software you can invest in fishmeal at Chile, in mining at Peru, in biotechnology at China and even software companies at Korea (a very interesting market considering the amount of people that play Massively-Multiplayer Online Role-Playing Games).

So far, we've uncovered some interesting facts about stock trading software, stock trading robot, stock, automatic buying selling stock, stock automation. You may decide that the following information is even more interesting.

Tips For Choosing The Best Stock Trading Software

The most important tip for choosing the best software stock trading package is that you feel comfortable with it. There isn't something more frustrating than having to use a software that you don't like. If that is the case, sooner or later you will uninstall it, feeling that you have paid unnecessary money for a lemon.

Do not place yourself into that position. Use the trial-periods offered by the different stock market trading software companies. It is the only way in which you are going to find out if there is a good chemistry between you and the product. After all, a practical software stock trading package is what you should be looking for.

The second tip is to look for a company that has been some time in the market. This is a proof that they offer a good product and that you will receive support for your acquisition. There are many stock and trading software companies that come and go, specially those that make free stock trading software.

Finally, do not trust stock trading software that promises you to make you rich, or that it can predict the future movements of stock. If that really was the case, would you sell it at $50 a copy instead of using it for making yourself filthy rich? This kind of programs are nothing but a scam so do not spend your time with them.

Remember that a stock trading software isn't the only thing that you need for making yourself rich. These programs are tools, not decision makers. It is you, the investor, the one who has to interpret that information and decide if it is worth using it or not. After all, the computer can't known how much is going to affect a company to have a backlog, or if their operations are on the brink of being nationalized by a foreign country.

You can't predict when knowing something extra about stock trading software, stock trading robot, stock, automatic buying selling stock, stock automation will come in handy. If you learned anything new about stock trading software, stock trading robot, stock, automatic buying selling stock, stock automation in this article, you should file the article where you can find it again.

Factors That Affect and Predict Stock Prices

2008-11-03T00:34:00.000-08:00

Stock Market Movement

2008-10-28T08:58:00.000-07:00

Understanding Stock Market Movement

Given enough time investing in the stock market, a trader will tell you that the research and analysis require the most time. In order to be successful, an investor needs to understand how the markets move and how to interpret differences in the various market indexes and what they mean. This kind of evaluation becomes an important part of an investor’s technical analysis of the stock market. It can add further clarity to various stock market movements and help an investor to find potential trades.

Let’s start this review by looking at each of the big three market indexes:
• S&P 500 – This market index is most commonly used by professionals in the financial world because it includes such a large sector of the market. It includes 500 of the most widely traded stocks and because it is a market cap weighted index, changes in larger companies tend to reflect more strongly than small cap stocks. The S&P 500 tends to be a more accurate indicator of market movements than the Dow.
• The NASDAQ Stock Market Composite – Even though this market index includes all of the stocks that are listed on the NASDAQ market, it is historically weighted toward technology stocks. This condition is the result of the fact that it is a market cap weighted index and thus the large cap stocks of technology companies strongly influence this index.
• The Dow Jones Industrial Average – This is the old-timer of the bunch. The Dow is the oldest, most widely known and most quoted of all the market indexes. The Dow tracks 30 of the most influential companies in the US and because it represents only large companies, it misses out on the small and mid-size companies completely. Unlike the S&P 500 and the NASDAQ, the Dow is a price weighted market index which means that if a stock price changes by $1, the effect on the market index is the same no matter the price of the stock. The Dow reflects only about 25% of the total market but changes in the Dow tend to reflect consumer confidence in the stock market as a whole.

What perspective does each index take?
Because each of the indexes takes a different approach, the stock market movement for each is different. For example, the NASDAQ structured so that technology stocks enjoy greater prominence that those in other stock sectors. This was evident in the late 1990’s when the technology boom was taking place. As events unfold that effect the technology sector, the NASDAQ will tend to see the most dramatic stock market movement, although the Dow will also be significantly affected.

The S&P 500, on the other hand, is not as severely impacted by tech stocks but tends to have a stock market movement that more accurately reflects the market in its entirety. Because it is weighted to the larger stocks it does not have the violent reaction to Wall Street news that its small-cap stocks might cause. The overall balance of the S&P 500 causes a more accurate representation of market movement than the Dow. This is the reason that most financial professionals use it as their barometer for stock market movement.

The Dow is the interesting one of the bunch; the granddaddy of the market indexes, it looks only to the 30 most influential stocks for its analysis of market movements. These are all large-cap stocks so they do not accurately evaluate the entire market, yet the Dow has proven to be the best market index for indicating consumer confidence.
Conclusion

No one index gives you the entire picture of stock market movements. The combination of the three can help you draw better conclusions about the market movements and what is motivating them. Activity by the tech sector will appear with strong reactions by the NASDAQ. Strong movements by the Dow can indicate whether the consumers are feeling good about the market in general. The Dow, though weighted to the top, will be a better indication of the overall stock market movement. By considering all three, successful traders can locate where highs and lows in stock market movement can be found and invest accordingly.

Stock Market Research

2008-10-28T08:57:00.002-07:00

It is nothing but foolishness to invest in the stock market without knowing about the market and market condition. But market research can help you gather relevant information about the stock business, which will help you play safe in the stock market. Market research companies advise you to study closely the performance chart, stock price, day trading and penny stocks of the company. They advise you to look for a reliable and experienced stockbroker. You can even refer to Stock Market Research Guides.

The stock market research must be based entirely on market research fundamentals and technical market research analysis. In India, there are many websites, which present a list of stocks that are profitable to invest in, based on market research principles.

Successfully venturing into the Stock market is not a child’s play. It requires deep understanding of the market, as said by market research firms and market research websites. If you want to profit in the stock market, then you have to develop a deep understanding of the stock market and have its basic knowledge.

Investors are tempted to invest in companies, which have large earnings and a high turnover rate. Market research firms help the investors to decide which company is profitable to invest in.

Market research professionals have formulated a principle that you have to keep in mind before investing in the stock market or any other market:

Buy low sell high — An intelligent investor is one who buys the shares at a low price and then sells it at a high price. It is this ability that will determine the profits or losses that you will earn from investing in the stock market. Market research companies tell you which company is reliable to invest in and what is the financial position of the company that you are willing to invest in. This information provided by market research firms helps you to take wise investment decisions.

You have to be wise enough to invest in the stock market seeing the conditions prevailing in the market. Do not invest unless you know well about the market that you are investing in. It is always wise to analyze the stock market well, before actually stepping into it.

Stock Market Corrections

2008-10-28T08:57:00.001-07:00

A correction is a beautiful thing, simply the flip side of a rally, big or small. Theoretically, even technically I'm told, corrections adjust equity prices to their actual value or "support levels". In reality, it's much easier than that. Prices go down because of speculator reactions to expectations of news, speculator reactions to actual news, and investor profit taking. The two former "becauses" are more potent than ever before because there is more self-directed money out there than ever before. And therein lies the core of correctional beauty! Mutual Fund unit holders rarely take profits but often take losses. Additionally, the new breed of Index Fund Speculators is ready for a reality smack up alongside the head. Thus, if this brief little hiccup becomes considerably more serious, new investment opportunities will be abundant!

Here's a list of ten things to think about doing, or to avoid doing, during corrections of any magnitude:

1. Your present Asset Allocation should be tuned in to your long-term goals and objectives. Resist the urge to decrease your Equity allocation because you expect a further fall in stock prices. That would be an attempt to time the market, which is (rather obviously) impossible. Asset Allocation decisions should have nothing to do with stock market expectations.

2. Take a look at the past. There has never been a correction that has not proven to be a buying opportunity, so start collecting a diverse group of high quality, dividend paying, NYSE companies as they move lower in price. I start shopping at 20% below the 52-week high water mark... the shelves are beginning to become full.

3. Don't hoard that "smart cash" you accumulated during the last rally, and don't look back and get yourself agitated because you might buy some issues too soon. There are no crystal balls, and no place for hindsight in an investment strategy. Buying too soon, in the right portfolio percentage, is nearly as important to long-term investment success as selling too soon is during rallies.

4. Take a look at the future. Nope, you can't tell when the rally will come or how long it will last. If you are buying quality equities now (as you certainly could be) you will be able to love the rally even more than you did the last time... as you take yet another round of profits. Smiles broaden with each new realized gain, especially when most Wall Streeters are still just scratchin' their heads.

5. As (or if) the correction continues, buy more slowly as opposed to more quickly, and establish new positions incompletely. Hope for a short and steep decline, but prepare for a long one. There's more to Shop at The Gap than meets the eye, and you run out of cash well before the new rally begins.

6. Your understanding and use of the Smart Cash concept has proven the wisdom of The Investor's Creed (look it up). You should be out of cash while the market is still correcting... it gets less scary each time. As long your cash flow continues unabated, the change in market value is merely a perceptual issue.

7. Note that your Working Capital is still growing, in spite of falling prices, and examine your holdings for opportunities to average down on cost per share or to increase yield (on fixed income securities). Examine both fundamentals and price, lean hard on your experience, and don't force the issue.

8. Identify new buying opportunities using a consistent set of rules, rally or correction. That way you will always know which of the two you are dealing with in spite of what the Wall Street propaganda mill spits out. Focus on value stocks; it's just easier, as well as being less risky, and better for your peace of mind. Just think where you would be today had you heeded this advice years ago...

9. Examine your portfolio's performance: with your asset allocation and investment objectives clearly in focus; in terms of market and interest rate cycles as opposed to calendar Quarters (never do that) and Years; and only with the use of the Working Capital Model (look this up also), because it allows for your personal asset allocation. Remember, there is really no single index number to use for comparison purposes with a properly designed value portfolio.

10. So long as everything is down, there is nothing to worry about. Downgraded (or simply lazy) portfolio holdings should not be discarded during general or group specific weakness. Unless of course, you don't have the courage to get rid of them during rallies... also general or sector spefical (sic).

Corrections (of all types) will vary in depth and duration, and both characteristics are clearly visible only in institutional grade rear view mirrors. The short and deep ones are most lovable (kind of like men, I'm told); the long and slow ones are more difficult to deal with. Most recent corrections have been short (August and September, '05; April though June, '06) and difficult to take advantage of with Mutual Funds. So if you over think the environment or over cook the research, you'll miss the party. Unlike many things in life, Stock Market realities need to be dealt with quickly, decisively, and with zero hindsight. Because amid all of the uncertainty, there is one indisputable fact that reads equally well in either market direction: there has never been a correction/rally that has not succumbed to the next rally/correction...

Stock Market Window Dressing

2008-10-28T08:56:00.001-07:00

As investors, and we all are investors these days, it is important that we understand the idiosyncrasies of the Stock Market pricing data we use to help us in our decision making efforts. On Wall Street, investing can be a minefield for those who don't take the time to appreciate why securities prices are at the levels that appear on quarterly account statements. At least four times per year, security prices are more a function of institutional marketing practices than they are a reflection of the economic forces that we would like to think are their primary determining factors. Not even close... Around the end of every calendar quarter, we hear the financial media matter-of-factly report that Institutional Window Dressing Activities" are in full swing. But that is as far, and as deep, as it ever goes. What are they talking about, and just what does it mean to you as an investor?

There are at least three forms of Window Dressing, none of which should make you particularly happy and all of which should make you question the integrity of organizations that either authorize, implement, or condone their use. The better-known variety involves the culling from portfolios of stocks with significant losses and replacing them with shares of companies whose shares have been the most popular during recent months. Not only does this practice make the managers look smarter on reports sent to major clients, it also makes Mutual Fund performance numbers appear significantly more attractive to prospective "fund switchers". On the sell side of the ledger, prices of the weakest performing stocks are pushed down even further. Obviously, all fund managements will take part in the ritual if they choose to survive. This form of window dressing is, by most definitions, neither investing nor speculating. But no one seems to care about the ethics, the legality, or the fact that this "Buy High, Sell Low" picture is being painted with your Mutual Fund palette.

A more subtle form of Window Dressing takes place throughout the calendar quarter, but is "unwound" before the portfolio's Quarterly Reports reach the glossies. In this less prevalent (but even more fraudulent) variety, the managers invest in securities that are clearly out of sync with the fund's published investment policy during a period when their particular specialty has fallen from grace with the gurus. For example, adding commodity ETFs, or popular emerging country issues to a Large Cap Value Fund, etc. Profits are taken before the Quarter Ends so that the fund's holdings report remains uncompromised, but with enhanced quarterly results. A third form of Window Dressing is referred to as "survivorship", but it impacts Mutual Fund investors alone while the others undermine the information used by (and the market performance of) individual security investors. You may want to research it.

I cannot understand why the media reports so superficially on these "business as usual" practices. Perhaps ninety percent of the price movement in the equity markets is the result of institutional trading, and institutional money managers seem to be more concerned with politics and marketing than they are with investing. They are trying to impress their major clients with their brilliance by reporting ownership of all the hot tickets and none of the major losers. At the same time, they are manipulating the performance statistics contained in their promotional materials. They have made "Buy High, Sell Low" the accepted investment strategy of the Mutual Fund industry. Meanwhile, individual security investors receive inaccurate signals and incur collateral losses by moving in the wrong direction.

From an analytical point of view, this quarterly market value reality (artificially created demand for some stocks and unwarranted weakness in others) throws almost any individual security or market sector statistic totally out of wack with the underlying company fundamentals. But it gets even more fuzzy, and not in the lovable sense. Just for the fun of it, think about the "demand pull" impact of an ever-growing list of ETFs. I don't think that I'm alone in thinking that the real meaning of security prices has less and less to do with corporate economics than it does with the morning betting line on ETF ponies... the dot-coms of the new millennium. [Do you remember the "Circle of Gold" from the seventies? Isn't GLD, or IAU, about the same thing?]

As if all of these institutional forces weren't enough, you need also consider the impact of tax code motivated transactions during the always-entertaining final quarter of the year. One would never suspect (after watching millions of CPA directed taxpayers gleefully lose billions of dollars) that the purpose of investing is to make money! The net impact of these (euphemistically labeled) "year end tax saving strategies" is pretty much the same as that of the Type One Window Dressing described above. But here's an off-quarter buying opportunity that you really shouldn't pass up. Simply put, get out there and buy the November 52-week lows, wait for the periodic and mysterious "January Effect" to be reported by the media with eyes wide shut amazement, and pocket some easy profits.

There just may not be a method to actually decipher the true value of a share of common stock. Is market price a function of company fundamentals, artificial demand for "derivative" securities, or various forms of Institutional Window Dressing? But this is a condition that can be used to great financial advantage. With security prices less closely related to those old fashioned fundamental issues such as dividends, projected profits, and unfunded pension liabilities and perhaps more closely related to artificial demand factors, the only operational alternative appears to be trading! Buy the downtrodden (but still fundamentally investment grade) issues and take your profits on those that have risen to inappropriately high levels based on basic measures of quality... and try to get it done before the big players do. To over simplify, a recipe for success would involve shopping for investment grade stocks at bargain prices, allowing them to simmer until a reasonable, pre-defined, profit target is reached, and seasoning the portfolio brew with the discipline to actually implement the profit taking plan.

Just call me old fashioned, but I miss the days when there were just stocks and bonds... interesting place Wall Street.

Stock Marketing and Investing Mistakes To Avoid

2008-10-23T03:18:00.000-07:00

Investing in the stock market is probably one of the riskiest ventures you can delve into with your money. It is also one of the most profitable. So it is only normal that you may have reservations about actually trying your luck in the stock market.

There are two people that you need to find and make friends with to get started investing in the stock market. If you are a brand spanking new beginner then first find a friend that invests in stocks. Preferable you want to find someone you have known for a while and someone that you can trust as a friend. You can use your friend to bounce ideas off of and get help from. Also you want to find a good stockbroker to begin trading. You might ask your friend who he or she uses as a stockbroker. Later on once you have gotten your feet wet you will want to strike out on your own but have a safety net in place before doing that.

One of the worst stock moves you can make is with variable annuities using the premium of your insurance. A variable annuity is an insurance contract that allows you to invest your premium in mutual fund-like investments. This sounds good in paper, but if you look at it a little harder, you will find that they are bad investments in the long run for the following reason:

Some other things that you want to watch out for and be carefully when considering investing follow.

Tax cuts
Ordinary investments in stocks and mutual funds qualify for low capital gains treatments, thus smaller taxes. Your gains from investing your premium, on the other hand, get taxed as income as soon as you withdraw the money.

Early withdrawal penalties
Insurance plans are designed for retirement. Taking out money from your premium entails a certain amount of penalty from both the insurance company as well as the government. So if you withdraw your profits, you will be penalized.

Death benefit
If your stocks are down upon your death, your beneficiaries can get as much as the investments you put in. Unfortunately, if your stocks are up, they get taxed as a regular income.

Costs
Annuities with insurance features are actually more expensive than ordinary mutual funds. The more insurance features your annuity has, the more annual feels are heaped against it, which naturally eats up your profits.

Timing
There are specific times as well, when to and when to not make an investment. For example times of natural calamity may drive prices of stocks down but there are no insurance these would recover to make a good profit.

Of course investing money in the stock market is inherently risky and you will lose some money at some point in your stock investing career. It is natural and a part of the learning process. The important thing is don't give up and stop just because you have a lost a little money. Take the loss as a learning experience and move on. Now if you find all of your trades end up losing money then you might decide to take a different route. However by following the advice and tips above along with your own knowledge you will end up profitable int he long run.

Hollywood Stock Exchange

2008-10-21T06:09:00.001-07:00

Back in 1993 on a movie tracking newsgroup, a group of guys started a predicting game. They set up a system where they could bid on upcoming films, and then figured out math formulas based on the buzz and the activity of those films in regards to the newsgroup to see if the price would rise or fall. It soon began to expand enough to become a website with an actual program running on it and thus the HSX or Hollywood Stock Exchange was born.

The HSX has gone through a lot of changes since those early beginnings, back in the dot.com boom of 2001, HSX went public and raised a good chunk of capital that it used to finance a TV channel, radio spots, and a whole slew of other market ideas, almost all of which have fallen through now.

Hollywood Stock Exchange is protected by US patents due to the specific formulas and processes they use and they have successfully protected themselves against software pirates who have attempted to nab the code for their own use. The HSX runs on a java platform with active server pages helping to keep the actual process hidden behind a shielded server wall.

When somebody decides to play the Movie market, they open a free account with HSX and are given 2 million Hollywood Dollars or H$. This is the online currency of the market, and is the only way to play the game. Players then buy and sell shares in the market and if they pick the right shares at the right time, their funds increase. I have been playing the HSX for about 18 months and have achieved more than H$43 million so far, which is not too bad.

Some of the biggest gains can come from predicting how much cash a movie will take on it's opening weekend. Because that is applied with a multiplier to the actual stock price, and if it is higher, then the stock price can jump up or down significantly. A big gain I managed to do was put some H$ onto Spiderman 3 before it released to theatres. That stock jumped more than H$43 on the strength of the box office, meaning every share held increased by that amount.

The HSX is a very good example of a prediction market, and the software that runs it is always being adjusted and tweaked by the operators to keep the system running at it's best performance. Thus we come to the big problem with HSX, downtime.

In the 18 months that this site has been monitored, not a week goes by that the site is not down for at least a couple of hours, or sometimes a full day. Quite often it will simply go down and nobody will say anything, then it recovers and people keep playing. Other times, the server will error or the database will fail, or any number of other excuses may occur that will cause the system to stop working, leaving the game's 10,000+ active players out of luck until the game is reset.

Now, even though the site is currently owned by an investment capital firm, I would imagine they would make it a priority to ensure their game, which is known around the world for what it is, would be kept up and stable. But it appears that they don't want to put too much into it. Even though HSX is ranked at 14,731 on Alexa's top 100,000 websites, which means it gets well over 10,000 hits a day if not more. HSX is also associated with the movie speculation site the numbers.com as they share information daily and have cross-links.

I find that quite sad as this type of site has a strong potential and it seems to be being squandered by the owners who seem to have no idea what to do with a concept like this, other than to let it sit without much improvement and let it die a slow death through neglect.

AMEX - The Third Stock Exchange

2008-10-21T06:08:00.001-07:00

American Stock Exchange directors Alan Quasha, Philip Frost and others hit on investment option that the individual investor should consider: The Exchange-Traded Fund that combines the best of two worlds.

Many of us are familiar with the two major U.S. stock exchanges, the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ), for very obvious reasons. The NYSE is the stock exchange with the largest dollar volume in the world - the combined capitalization of all its listed companies was over $30.5 trillion (as of 31/12/07) - and its almost 4,000 listed companies make it one of the three stock exchanges with the highest number of listed companies. The NASDAQ has more trading volume per day than any other stock exchange in the world, and with its over 3,900 listed companies it competes with the NYSE for the second highest number of listings (the Bombay Stock Exchange has over 4,700 listings making it the stock exchange with the most listings, yet it has a combined capitalization of less than $2 trillion).

The third largest U.S. stock exchange with over 850 equity listings is the American Stock Exchange (Amex), and while it may seem to pale in comparison to the NYSE and NASDAQ it has many positive attributes that set it above its larger brothers. The Amex has much more liberal policies when it comes to the listing requirements, and this makes it much easier for small and medium sized companies to list. However, there is another aspect of the Amex that makes it attractive to the small investor - and it is here that its uniqueness and innovation is expressed.

In 1993 the Amex gave birth to a new investment instrument called the Exchange Traded Fund (EFT). In conjunction with State Street Global Advisors, Amex launched the first exchange-traded fund (ETF) with the introduction of the S&P 500 index fund (SPDR - colloquially termed "spiders"), which was linked to the S&P 500 Index. Since then, ETFs have flourished across all the stock markets, yet the Amex remains the home and breeding ground of the majority of ETFs. The flurry of activity following the introduction of the SPDR gave rise to many ETFs, many of them index-linked, and the years immediately following the SPDR's burst onto the investment stage coincided with the tenure of Amex governors Alan Quasha and Philip Frost, who together with the Amex leadership nurtured the ETF revolution.

To understand what an ETF is, and also to appreciate its advantages over other investment strategies, requires a basic knowledge of some of the classic investment options available to the private investor. The ETF is in reality a mutual fund that benefits from the advantages of a fund, yet it acts as a regular bond or stock, and thus incorporates the advantages of a stock, thereby eliminating the limitations of the mutual fund. (Many mutual funds - and in turn, ETFs - are linked to indices, which means the funds mimic the successful diverse combination of investments that comprise an index.)

A mutual fund is a collective investment fund which incorporates a basket of shares of listings across the market and it is seen as one of the most solid forms of stock market investment. This is due to its management by professional managers, but primarily due to the fact that it comprises a diverse portfolio covering many spheres of the market, and thus it is less vulnerable to sectorial fluctuations. Not only does it offer the small investor this cross-market diversity, but he is able to invest in numerous and high quality companies that would require funds far beyond the financial abilities of private individuals. (Of course the exact solidity and yield of the mutual fund depend on the declared aims and scope of each mutual fund.)

Regular stocks and bonds are the most basic commodities of a stock market. They are the shares that offer the public ownership in part of the listed company. Unlike shares in a mutual fund that may only be traded at their closing price at the end of the trading day, classic stocks may be traded at any moment, and the price fluctuations during the day can be utilized by investors in speculative activities. Thus the most fluid, dynamic and flexible investment on the stock exchange is the regular stock.

The exchange-traded fund combines the strongest aspects of mutual funds and regular stocks in offering the solidity and diversity of the mutual fund, together with its increased funds and professional management, and also incorporating the fluidity and dynamism of the stock, allowing all the investment activities and real time behavior of the stock. Additional benefits include lower management expenses, as regular brokerage fees apply, tax incentives expressed by lower rates, and the short-term capabilities of the stock. In effect, while investment in a mutual fund resembles an investment in stocks across the market, the ETF allows one to trade in numerous stocks across the entire market as if they were one stock.

With the many benefits of the ETFs, it is no surprise that this market has grown include hundreds of ETFs within only a few years. The Amex remains the fertile ground for the majority of ETFs, and this will continue due to its experience and flexible constitution. This fast growing investment option is estimated to surpass a capitalization of $1 trillion by 2010, and it is certainly one of the prime investment instruments that the individual investor must consider.

How to Improve Stock Exchange Systems

2008-10-21T06:07:00.000-07:00

Stock Exchanges are more and more technology driven. The information systems SE uses, can be improved by using a technique that is entering all kinds of domains these days; Data Mining.

Data mining and business intelligence has changed many businesses already. A good example is sports. In soccer the game has been made more interesting because of additional comments that were provided by information systems. We get information on how many times the team has won in similar circumstances, how many penalties a player has missed, or how many corners converted into goals...

The Stock Exchange is another area where defaming technique could help to improve the main function of the exchange. This is to offer a platform for trade. During this crisis the value of Stock exchange stocks have decreased more than you would imagine the profits would decline, given the amount of trading. Many will trade less during a bear-market.

The worst a stock-exchange can do is to close down. This happened last week in Moscow and in Vienna. Closing down an exchange will not raise the confidence people have in such an exchange. There are many other mechanisms to control sell-off by stock-exchange-rules, but these are not always enough.

The decision to close an exchange is motivated by the fear of a massive sell-off. Similar to a run on banks. If people sell now, how do we know whether they come back ever?

Data mining may offer help in such a situation. To gain back some confidence wall displays or information on websites may offer information to put the decline in a perspective; for example: "in ... (similar) situations a three days decline like this, was followed by a 15% increase in the following two days."

The right and exact messages need to be assessed, but the idea is to control pure fear. And to offer an alternative to closing the exchange.

The Soccer game has changed since data mining and maturity of information systems.
The stock exchange is a market that has already changed much of its form. It used to be a floor with people, and they could communicate to each other, now only information systems can control a path that has been entered by use of these same information technology. And defaming seems the most appropriate for the short term. Stock-Exchange-stocks that are best developed with these kinds of technology will outperform other SE-stocks in the future.

Stock Scanning Tips

2008-10-17T09:18:00.000-07:00

Stock scanning is a vital tool used by professional traders to find symbols that fit their criteria. There are thousands of programs and resources that scan the stock market based upon investor criteria, locating stocks that fit your trading system. Are you seeking stocks with a price between $5 and $50 with a PEG ratio of .4? A stock scanner will search through piles of data and return with hundreds of names that match the criteria. Why do all the initial searching when automated programs can do it for you?

Stock scanning saves time

Looking through thousands of stocks listed on trading exchanges takes time – when your most valuable resource as a trader is the time you can spend trading rather than searching.

Finding stocks does not make money for you; it’s the trading that does. Planning to use a stock scanner or manual scanning in a trading plan is a good way to lay down the rules for your trading systems.

What to consider when adding stock scanning tips

Consider what kind of trader you are in creating the parameters for your stock scanning. For example, if you find yourself making money shorting stocks and losing on buying, scan only for stocks that have a fundamental problem.

Inherently, when you trade with the market, the odds are in your favor. Creative techniques, such as only selling stocks short if they are largely unprofitable, are a good way to increase your odds. Likewise, buying companies with huge year over year growth makes much more sense than selling the stock at a top. If you flow with the uptrends, downtrends and sideways trends, you’ll produce bigger profits and smaller losses. That’s a combination that can’t be beat.

Trading plan planner

Profitable traders know that a good trading plan planner creates the foundation of successful profits. A trading plan planner will allow you to organize your thoughts and system into one comprehensive trading plan.

Outline your stock scanning tips and proven strategies in a step by step plan. Start with the most simple but also definitive indicator. For example, if only 10% of stocks qualify for a certain criteria, it would be smart to start off the steps with that specific criteria set. Weeding out the bad stocks as quickly as you can will speed up the scanning process and leave you only with quality stocks you would want to hold.

Philosophy of stock scanning

Stock scanning is done to save time and money, while allowing you to place quality trades. It isn’t the number of trades that count, but the quality and what each stock brings to the table. In many respects, stock scanning is the best way to count through thousands of shares and find the best company for your trading plan. When trading plan and quality stocks meet, you’ll become a profitable trader.

Investing in the Stock Market

2008-10-17T09:17:00.000-07:00

A 29 year old young marine engineer from India wants to invest in stocks. He has been advised to invest in stocks by another first timer who is 65 years of age in USA! After retirement, he has taken to investing in the stock market. A bored housewife monitors the trading regularly once her husband leaves home! All have diverse plans but each person wants to make money through the stock exchange. Never has the Sensex been so attractive to draw the attention of investors. Who does not want to make money? Is trading safe? Will the US recession hit the trading season badly? What is the right time to invest and which are safe companies to invest?

Today doing anything without specialized knowledge can be dangerous. Every niche industry has consultants to advice debutants. Getting into the share market is like entering a jungle. Without an investment guide, even a regular trader can get confused. Before making an entry in the trading ring, study, for at least three months the existing stocks and monitor the market movement. Speak to habitual traders, and brokers to understand how it works. Well researched and hands-on knowledge on the trading practice will familiarize you with the common phrases, names and even codes used in the market. There are many online financial sites that give customary tips and advice to invest. You would need a financial calculator, online access to the stock exchange and a brokerage account. Much before that, you will have to decide why are you investing in the stock market? What financial goals have you set and what time period has been set to make profits? This is critical to determine which stocks you will be picking up. There are different plans for short and long time trading.

For investment you will have to make a portfolio to maintain and track the account of the companies being investing in. Read and research about the performance of these companies and monitor them regularly. You cannot risk any money on companies that fluctuate. There is a choice of premium (also referred as blue-chips), mid-cap and lower end stocks. The portfolio should be diverse enough to withstand losses. Try not to sell the stock, if its points come down. And do not rush to buy just because everyone is doing so. There is manipulation even at the stock exchange and one has to remain calm in the face of the storm. It is difficult to understand right away, but once the interest is there, investment in stock market can become a heady experience.

Money in Stocks Market

2008-10-15T00:40:00.000-07:00

Are you one of the many people who have no time to do detailed analysis, but want to do some stock trading? Then these Instant profits may work for you. It’s the how to buy and hold strategy. This trading course has established itself as a concise, clear and highly effective approach to stocks and investment strategy.

Instant Profits is Bill’s proprietary trading method. Based on technical analysis it’s a method that both beginner and intermediate traders can understand and implement. Once you learn Bill Poulos’ trading system, you fully understand how and why it makes you money. Here are some trading secrets,

1) Stock market always goes up and down. In the long run you must have an exit strategy that limits risk, otherwise you are just buying, holding, and hoping. You need to use a trading method that applies to any market – bull or bear that potentially gives you a winning edge.

2) Most of the so-called “experts” that tell you trading is easy never tell you about money management and discipline. Trading requires diligence on the part of the trader to follow a good trading method, use good money management principles, and trade with discipline.

3) Most of trades go from trading method to method, chasing after the next sure thing only to be disappointed over and over again. The reality is the Holy Grail of Trading does not exist.

4) Selling short works just as well as buying long. In fact, being long in a bear market is far more risky than being short. And of course, being short in a bull market is equally risky. So the level of risk of a position is dependent on the use of good money management methods, not whether you are short or long.

5) The majority view for the coming year stock market performance by the top name analysts in the country is almost never correct. That is because the market is simply unforecastable.

Although the market is a hazardous place, but you can still amass a fast fortune if you know the secrets. Instant profits system will acquaint you with some of the most successful ways of profiting in the market.

The Biggest Stock Market Secret

2008-10-15T00:39:00.000-07:00

This could be the most shocking article you've read for a very long time.

When you discover he biggest stock market secret of all, it could undermine everything you believe about trading in stocks. It could also completely turn your trading around by removing the "gambling" element almost entirely, and turning your losses into profits overnight.

Whether you're currently an active investor or not, you'll know the basics of how most people play the stock market. It can be summed up in two words.

Buy

Pray

You might laugh, but you know it's true!

They get a 'hot tip' from a newspaper, a tip sheet, a guy in a bar, wherever, and they go ahead and buy the stock. Then, they wait and hope and pray that it goes up, and IF it does, they sell and collect a profit.

It's not exactly what you'd call a strategy, now is it?

Of course, there are traders who work far more sophisticated strategies than "Buy & Pray". They might use charts and technical analysis and work their trades on moving averages, Fibonacci lines, Bollinger bands and so on. They might go short occasionally to profit from an expected downward move, but the "gambling" element is still there – decide which direction the stock is likely to move in, and take a position on that basis.

If you're right, fantastic! If you're wrong, it's more of your trading capital down the tubes, and back to the drawing board for the next trade.

Why do people trade this way?

Well, I've done quite an in-depth study of this, and here's what I've found. Most people trade a direction because they think they're right (of course!) and because they don't know any other way of trading.

Even more fundamentally, though, there is an underlying belief that says,

"There are people in the world who can accurately and consistently predict the direction of any given stock or market. If I work at it hard enough, I'll eventually become one of them."

(And the nagging question here, of course, is whether "eventually" will come around before the trading capital runs out!)

So here's the biggest stock market secret…

NO ONE has the ability to accurately and consistently predict the direction of any given stock or market, and so it doesn't matter how long you trade for, you'll NEVER attain this ability!

I did warn you, didn't I? You might want to re-read that a couple of times, just to let it sink in.

And then you'll find a question emerging from the gloom – So, now what??

Well, if no one can predict the direction of the market, how to those 'in the know' trade? The answer is perhaps the second-biggest stock market secret.

The reality is, the "smart money" does NOT trade the direction of the market. The "smart money" trades only in situations where a big move is likely – and the "smart money" doesn't care which direction that move takes, because they're positioned to make a profit whether the stock falls or rises!

Again, may I suggest you re-read that paragraph a couple of times, too? Consistently successful traders trade to profit from big, fast moves, regardless of whether that move is up or down.

Can you learn how to follow in their footsteps? Absolutely!

Can you profit in the same way they do, without having to "gamble" on the direction of a market or stock? Absolutely!

Will it take you away from your job, your family, your leisure time? Absolutely not! This form of trading is unique as it's largely a set-and-forget strategy – and the 'setting' takes only a few hours a month!

Once you understand this profit-either-way strategy – and I suggest you learn direct from a professional trader who does this for a living – there are only a few steps to take, once a month.

You a) check which stocks are highlighted for you; b) check for the presence of one particular indicator; c) check to see if a highlighted stock with an indicator is a definite trade on a private website; and d) place the trade (with one phone call, or through your online trading platform).

And that's it!

You then profit if the stock moves up. And you profit if the stock moves down. And can usually bank your profits in a matter of days, as you'll be trading on volatility here, which means large moves in a short timeframe.

You'll only lose a little if the stock does nothing at all which, when you understand the strategy, you'll realise is quite a rare event.

Happy trading!

Know the Stock Markets

2008-10-15T00:37:00.000-07:00

Creating Wealth in Stock Market

2008-09-27T07:07:00.001-07:00

The 12 Rules of How to Avoid Losing and Start Making Money from the Stock Market

RULE 1: WHY DO YOU INVEST?

Make more money, this is the answer to most people.
If your reason is to make more money, then ask yourself these three questions:

1.Is your strategy making money?

2.Is your strategy safe?

3.How to increase the profit and minimize the risk?

RULE 2: HOW TO CREATE WEALTH IN STOCK MARKET WITH JUST $1,000

Let say we invest some lower price stocks with just $1,000 in the stock market, invest twice a year for short-to-medium term. If each time the return is double, you will make one million dollar cash within 5 years. If your starting capital is $20,000, after 3 years you will make one million dollar cash.

If you are using the same $1,000 capital, invest twice a year, but the return is only 50%, you will make one million dollar cash after 9 years.

So we can always start small. However, it is very important that we know how to select high profit and low risk stocks.

RULE 3: DON'T GET OBSESSED WITH STOCKS

Sitting and monitoring the market whole day long will not bring you profit. Instead, it increases pressure and misleads your judgment.

RULE 4: NEVER GAMBLE

95% of the people always buy at the highest price. They don’t really know when to buy, just relying on news, rumors and tips. Only 5% of the people knows how to trade at the lowest price. That’s why 95% are losing money, only the 5% are making money.
Investment Builds Wealth, Gambling Definitely Lose !

RULE 5: SAY GOODBYE TO NEWS

News used to be able to predict the market trend. But not anymore, it is difficult to judge which news could actually influence the market nowadays.

RULE 6: DO YOUR OWN ANALYSIS, FORGET ABOUT TIPS

Before investing, ask yourself these four questions:

1.How many people have already heard about the tips before you?
If many have heard about it before you, this news is already obsolete. The price is already high.

2.How long have the tips been spreading before it reaches you?
The next day?

3.Who told you?
Listed company director? Or friends?

4.Assuming that the tip is true, would you possibly know about it?
Normally insider news is not disclosed.

RULE 7: SELL YOUR STOCKS EVEN LOSING MONEY

It is easier to be said than done.

Sell at a loss is a difficult decision. Your heart will object, and your feeling will say "It is going to rebound, don't sell." Eventually price dropped further, causing a much tragic lost.

RULE 8: DON'T JUST FOCUS ON MAKING MONEY

How to protect your capital is much more important. Don’t try to make 100% profit. It is already good enough to have a 60% profit margin.

RULE 9: HISTORY WILL NOT ALWAYS REPEAT

Everyone expects to make some money from the stock market before Christmas, New Year, annual budget announcement or election, but the stock market is not always bullish during these events. We can say history is not always repeated.
The best way is “Let the Market Lead us”.

RULE 10: QUOTES FROM WARREN BUFFET

There are only two rules to make money in stock market:

The first rule: Never lose your money.
The second rule: Never forget the first rule.

RULE 11: TURN BAD STOCKS INTO GOOD STOCKS, DON’T JUST HOLD YOUR STOCKS

Don’t hold your stock too long, there is a value when stocks are sold.

How long have you been holding your stocks until now?
Since Year 1993? 1997? Or Year 2000?

Why didn't you exercise your stocks? Long term investment strategy is not practical anymore. Even the blue chips also crash when the market collapses.

The best strategy is to sell the stocks that are not earning money, and reselect some good counters. Buy low, sell high for several times will earn you more than enough to compensate the lost.

RULE 12: WAKE UP FROM MISTAKES

Stop investing if you are not sure of when to buy or sell.

Without the knowledge of investment, you are bound to lose again. This is an age of information. Investors are using knowledge, techniques and strategies to make money. Without investment knowledge, how do you protect your money?

Building wealth through investing starts with securing your capital.

10 Golden Rules for Stock Market Trading Success

2008-09-27T07:05:00.000-07:00

Your stock trading rules are your money. When you follow your rules you make money. However if you break your own stock trading rules the most likely outcome is that you will lose money.

Once you have a reliable set of stock trading rules it is important to keep them in mind. Here is one discipline that can reap rewards. Read these rules before your day starts and also read the rules when your day ends.

Rule 1: I must follow my rules.

Naturally if you develop a set of rules they are to be followed. It is human nature to want to vary or break rules and it takes discipline to continue to act in accordance with the established rules.

Rule 2: I will never risk more than 3% of my total portfolio on any one stock trade.

There are many old traders. There are many bold traders. But there are never any old bold traders. Protecting your capital base is fundamental to successful stock market trading over time.

Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.

Some traders have an even lower tolerance for loss. The key point here is to have set points (stop loss) within the limits of your tolerance for loss. Stay informed about the performance of you stock and stick to your stop loss point.

Rule 4: Never set price targets.

This is a style that will allow me to get the most out of rising stocks. Simply let the profits run. Realistically, I can never pick tops. Never feel a stock has risen too high too quickly. Be willing to give back a good percentage of profits in the hope of much bigger profits.

The big money is made from trading the really BIG moves that I can occasionally catch.

Rule 5: Master one style.

Keep learning and getting better at this one method of trading. Never jump from one trading style to another. Master one style rather than become average at implementing several styles.

Rule 6: Let price and volume be my guides.

Never listen to any opinion about the stock market or individual stocks you are considering trading or are already trading. Everything is reflected in the price and volume.

Rule 7: Take all valid signals that show up.

Don't make excuses. If an entry signal shows up you have no excuse not to take it.

Rule 8: Never trade from intra-day data. There is always stock price variation within the course of any trading day. Relying on this data for momentum trading can lead to some wrong decisions.

Rule 9: Take time out.

Successful stock trading is not solely about trading. It's also about emotional strength and physical fitness. Reduce the stress every day by taking time off the computer and working on other areas. A stressful trader will not make it in the long term.

Rule 10: Be an above average trader.

In order to succeed in the stock market you don't need to do anything exceptional. You simply need to not do what the average trader does. The average trader is inconsistent and undisciplined. Ask yourself every day, "Did I follow my method today?" If your answer is no then you are in trouble and it's time to recommit yourself to your stock trading rules.

Of Stocks, Stockholders And Stock Market

2008-09-20T13:14:00.001-07:00

A copper mining enterprise Stora Kopparberg first introduced the system of stock in the 13th century. The financial backers and owners felt the need to raise money for investment in the new projects of the same company so they started the method of stock and shares. It was also required in order to ward off the threat to the ownership rights if the company was sold, which would mean complete loss of control.

The investors got the monetary support they were looking for and at the same time solved ownership issues in case the company was sold by granting stocks to the people. Plus, they sold a part to people and still retained control over the company. Thus, the owner had some portion of the assets, some power to make decision conditionally. In return, they shared a part of the profit with the stockowner as dividend.

Financially, stock implies the ownership or share in a corporation. It gives the stockowner the right to claim a share in the assets and income of the corporation. The two types of stocks, preferred and common differ in many respects. The common stock owners can vote at the shareholders' meetings whereas the preferred stockowners cannot vote. Common stockowners get dividends declared by the company, whereas preferred stock owners have higher claim in assets and income of the company. Preferred stock entitles the owner to have his dividends earlier than the common stock owner. Preferred stock owner gets the priority when the company goes bankrupt. Besides these two, the other types of stock are dual class shares and treasury stock.

A stockowner is not liable to losses in case the company closes and has loans to pay back. The loss of the stockholders is limited to the money that would have been made by converting the assets into cash since all the money would be used to repay the loans to the creditors.

A stock exchange is the place where trading of shares is carried out. Individuals and companies sell and purchase shares on a large scale. Generally, a particular company trades only in one specific market and is said to be on the list of that particular stock exchange. However, big multinational companies can be listed on many stock exchanges. This is called inter-listed shares.

There are various methods to buy or sell finance stocks, but the commonest among them is through the mediator called stockbroker, who actually transfers the shares from one owner to another. Stocks can be bought directly from the company also.

The stock market of a country is an indicator of its economy, which just goes to show the growth and power of the stock market.

Stock Market Analysis

2008-09-20T13:13:00.002-07:00

The return that a stock can provide is often predicted with the help of technical analysis. Stock market trading tips are based on technical analysis of various parameters.

Stock market analysis is science of examining stock data and predicting their future moves on the stock market. Investors who use this style of analysis are often unconcerned about the nature or value of the companies they trade stocks in. Their holdings are usually short-term – once their projected profit is reached they drop the stock.

The basis for stock market analysis is the belief that stock prices move in predictable patterns. All the factors that influence price movement – company performance, the general state of the economy, natural disasters – are supposedly reflected in the stock market with great efficiency. This efficiency, coupled with historical trends produces movements that can be analyzed and applied to future stock market movements.

Stock market analysis is not intended for long-term investments because fundamental information concerning a company's potential for growth is not taken into account. Trades must be entered and exited at precise times, so technical analysts need to spend a great deal of time watching market movements. Most stock tips and recommendations are based on stock analysis methods.

Investors can take advantage of these stock analysis methods to track both upswings and downswings in price by deciding whether to go long or short on their portfolios. Stop-loss orders limit losses in the event that the market does not move as expected.

There are many tools available for stock market technical analysis. Hundreds of stock patterns have been developed over time. Most of them, however, rely on the basic stock analysis methods of 'support' and 'resistance'. Support is the level that downward prices are expected to rise from, and Resistance is the level that upward prices are expected to reach before falling again. In other words, prices tend to bounce once they have hit support or resistance levels.

Stock Analysis Charts & Patterns

Stock market analysisrelies heavily on charts for tracking market movements. Bar charts are the most commonly used. They consist of vertical bars representing a particular time period – weekly, daily, hourly, or even by the minute. The top of each bar shows the highest price for the period, the bottom is the lowest price, and the small bar to the right is the opening price and the small bar to the left is the closing price. A great deal of information can be seen in glancing at bar charts. Long bars indicate a large price spread and the position of the side bars shows whether the price rose or dropped and also the spread between opening and closing prices.

A variation on the bar chart is the candlestick chart. These charts use solid bodies to indicate the variation between opening and closing prices and the lines (shadows) that extend above and below the body indicate the highest and lowest prices respectively. Candlestick bodies are coloured black or red if the closing price was lower than the previous period or white or green if the price closed higher. Candlesticks form various shapes that can indicate market movement. A green body with short shadows is bullish – the stock opened near its low and closed near its high. Conversely, a red body with short shadows is bearish – the stock opened near the high and closed near the low. These are only two of the more than 20 patterns that can be formed by candlesticks.

When glancing at charts the untrained eye may simply see random movements from one day to the next. Trained analysts, however, see patterns that are used to predict future movements of stock prices. There are hundreds of different indicators and patterns that can be applied. There is no one single reliable indicator, but these stock analysis methods when taken into consideration with others, investors can be quite successful in predicting price movements.

One of the most popular patterns is Cup and Handle. Prices start out relatively high then dip and come back up (the cup). They finally level out for a period (handle) before making a breakout – a sudden rise in price. Investors who buy on the handle can make good profits.

Another popular pattern is Head and Shoulders. This is formed by a peak (first shoulder) followed by a dip and then a higher peak (the head) followed again by a dip and a rise (the second shoulder). This is taken to be a bearish pattern with prices to fall substantially after the second shoulder.

Other Stock Market Analysis Methods

Moving Average - The most popular indicator is the moving average. This shows the average price over a period of time. For a 30 day moving average you add the closing prices for each of the 30 days and divide by 30. The most common averages are 20, 30, 50, 100, and 200 days. Longer time spans are less affected by daily price fluctuations. A moving average is plotted as a line on a graph of price changes. When prices fall below the moving average they have a tendency to keep on falling. Conversely, when prices rise above the moving average they tend to keep on rising.

Relative Strength Index (RSI) - This indicator compares the number of days a stock finishes up with the number of days it finishes down. It is calculated for a certain time span – usually between 9 and 15 days. The average number of up days is divided by the average number of down days. This number is added to one and the result is used to divide 100. This number is subtracted from 100. The RSI has a range between 0 and 100. A RSI of 70 or above can indicate a stock which is overbought and due for a fall in price. When the RSI falls below 30 the stock may be oversold and is a good time to buy. These numbers are not absolute – they can vary depending on whether the market is bullish or bearish. RSI charted over longer periods tend to show less extremes of movement. Looking at historical charts over a period of a year or so can give a good indicator of how a stock price moves in relation to its RSI.

Money Flow Index (MFI) - The RSI is calculated by following stock prices, but the Money Flow Index (MFI) takes into account the number of shares traded as well as the price. The range is from 0 to 100 and just like the RSI, an MFI of 70 is an indicator to sell and an MFI of 30 is an indicator to buy. Also like the RSI, when charted over longer periods of time the MFI can be more accurate as an indicator.

Bollinger Bands - This indicator is plotted as a grouping of 3 lines. The upper and lower lines are plotted according to market volatility. When the market is volatile the space between these lines widens and during times of less volatility the lines come closer together. The middle line is the simple moving average between the two outer lines (bands). As prices move closer to the lower band the stronger the indication is that the stock is oversold – the price should soon rise. As prices rise to the higher band the stock becomes more overbought meaning prices should fall. Bollinger bands are often used by investors to confirm other indicators. The wise technical analyst will always use a number of indicators before making a decision to trade a particular stock.

Stock Market Investment Advice That The Gurus Teach

2008-09-20T13:13:00.001-07:00

There are many well known investment gurus out there – Joel Greenbalt, Warren Buffett, and Dr. Mark Faber are just a few and here is some of that stock market investment advice that the Gurus teach.

The number one stock market investment advice that the Gurus teach is to find the hidden jewel. In other words don’t just buy that well known business name instead do your research and check out those tiny out of the way rather mundane companies that are the hidden jewels.

Just take a look at Buffett’s investment in American Express when when it was near bankrupt. It looked like they’d never make it back to the surface and yet Buffett purchased these stocks and made a fortune following the stock market investment advice that the Gurus teach.

The second piece of stock market investment advice that the Gurus teach is about spin offs. A company will spin off a subsidiary into it’s own stand alone company. It may do this for a host of reasons including a hidden jewel that they want to expose. Spin offs do well in the first three years throwing 10% or higher returns and yet they are too often overlooked by investors. Check out all the options that the spin off provides you and the see what stock market investment advice that the Gurus teach.

Another popular stock market investment advice that the Gurus teach is all about the merge although the opportunities aren’t are not seen as much as in the past because Graham and Buffett made the strategy famous and now it’s no longer a secret in the world of investments.

Bankruptcy is another stock market investment advice that the Gurus teach regularly. When a company sits bankrupt there are all kinds of stock holders just dying to sell off their stocks so there is the potential for huge profits but the stock market investment advice that the Gurus teach also notes that you need to make sure you choose a bankrupt company that can make it back from the bowels of extinction or you’ll loose your money.

There is plenty of stock market investment advice that the gurus teach. This is just the tip of the iceberg and with so much knowledge to share don’t miss out on their teachings. Shop around for a variety of stock market investment advice that the Gurus teach online. Many sites post it to help you.

Goal-Setting Advice For Investing in the Stock Market

2008-09-20T13:11:00.000-07:00

You've heard all the popular cliches. Remember the statement "money doesn't grow on trees"? How about the famous line that it "takes money to make money"? Even if they didn't make sense to you before, they will now that you're interested in successful stock trading because investing money involves a great deal of risk.

Although there is plenty of risk associating with trading, that doesn't necessarily mean you'll achieve lofty profits. Also you don't have to invest heavily or take great risks to achieve profits. Every situation is different and a savvy investor makes solid decisions to earn considerable profits while suffering minimal loss.

Every successful businessman will tell you that the first lesson about making money in any endeavor has a risk for both loss and gain. The real trick is to decide whether the profit is worth the risk. If you think so, you need to figure out if you are personally willing to take that risk.

Before you begin trading, there are three basic questions to consider:

1. What goals to you hope to achieve by investing?
2. Do you believe your investments will lose money?
3. Do you want to take larger risks for bigger profits?

By setting goals for your achievement, you will know how long you want to wait for a stock to realize a profit. It also helps you define a limit on the amount you are willing to lose. Determining your goals is one of the basic ways to start investing in stocks and tracking your achievements.

If you begin by choosing a low return investment, you may want to increase the amount you invest or increase the length of time you invest in the stock. Once you decide whether you want to invest more money or more time on an investment, consider these trading philosophies to get to the next level of success including:

- Know when to invest. Beginners get excited and want to trade all the time. Adrenaline flows when shares go up or when they fall down. You make your decisions based on a whim and other factors that really don't impact a stock when it comes to long term investing. The most effective traders spend half their time waiting and studying how the stock performs and they are not trading all the time, everyday.

- Be disciplined. Once again, don't get so excited that you start trading on any stock that looks somewhat acceptable rather than waiting long enough for the best stock to come along.

- Make small moves with large payoffs. Instead of dabbling in a large number of small stocks with tiny profits, keep your eyes open for the big stocks and concentrate your efforts on just a few.

- Emotions don't belong in trading. It feels exciting to make money and depressing to lose money. As a trader, you must not be emotional or you become unable to view your investments objectively.

Trading stocks is a high risk venture with the potential for substantial profits. Don't dabble in the stock market without knowledge and goals. Take your time as a beginning trader. Study the market, do your research and be patient when making investments. Remember, it is your money so the losses are yours as well as the profits.

Stock Options - How to Insure You Shares Against a Market Crash

2008-09-18T09:36:00.003-07:00

You wouldn't buy a car or a house and risk losing all the money you had invested should you be the victim of theft or experience a natural disaster such as fire or would you?

It makes perfect sense to the average person to make sure they have an insurance policy in place to protect them from any potential losses. Even though we have to pay a premium for this protection, it gives us peace of mind doesn't it?

Something that scares the average person away from Investing in the Stock Market is the fact that they may lose all their money in the event of a Stock Market Crash.

But did you know you can actually pay a premium for an insurance policy on Shares you own?

It is called a Stock Option, or more specifically, a Put Option.

A Put Option is a contract relating to a particular stock, that gives you the right to sell that stock at a fixed, pre-determined price within a fixed period of time.

So just like a car insurance policy that expires at the end of a six or twelve month term, a put option would allow you to have insurance on your shares for a certain period of time. This is called a Protective Put and is commonly called Hedging.

Let's say you own XYZ shares that you paid $ 20 for and you would like to insure them for the full value of what you paid, and you wish to have this insurance in place for 6 months.

You would purchase an XYZ $ 20 Put Option with an expiry date 6 months from now. For this you would pay a premium. That premium may be around $ 1.20 but you would then have peace of mind knowing that if the stock market crashed and your shares were suddenly only worth a few dollars then you could exercise your Put Option and sell those shares for the $ 20 you originally paid.

The only loss you would incur then would be the cost of the Put Option, but in many cases the dividends you would receive on your shares throughout this period of time may just be enough to cover the cost of your options, taking nothing out of your own pocket.

Stock Options started out as more of a hedging instrument than a speculative instrument, and these days there are so many different strategies that incorporate the use of Put Options.

Whether it be for insurance purposes or to make money as income in the short term, stock options strategies can be structured for any purpose...yes, you can structure a position to profit even if the stock you are holding falls!

Stock Market Money Management Skills

2008-09-18T09:36:00.002-07:00

Let's start by saying: You can't be afraid to take a loss. The investors that are the most successful in the stock market are the people who are willing to lose money.

Having a strategy and/or a specific philosophy is an excellent starting point to investing but it won't mean a thing if you can't manage your money. As I have said a million times: without cash, you can't invest.

Most investors spend far too much time trying to figure out the exact pivot point or perfect entry strategy and too little time on money management. The most important aspect to investing is cutting your losses, 90% of the battle is won by protecting your capital, regardless of the strategy.

Most successful money managers only make money 50-55% of time. This means that successful individual investors are going to be wrong about half the time. Since this is the case, you better be ready to accept your losses and cut them while they are small. By cutting losses quickly and allowing your winners to ride the up-trend, you will consistently finish the year with black ink.

Here are some methods that can help you with money management:

Set a predetermined stop loss (you must know where to cut the loss before it happens “this will help control emotions when the time comes)." A 7-10% stop loss insurance policy is best. Tighten the stop loss range in down markets and loosen the range in strong bull markets.

Establish smaller positions if your account has had a recent losing streak (the losses may be telling you important information such as a critical turning point, it may be time to sell and get out).

If you think you are wrong or if the market is moving against you, cut your position in half “this is the best insurance policy on Wall Street."

If you cut your position in half two times, you will be left with only 25% of the original position “the remaining stock is no longer a big deal as your risk is very low."

If you sell out of a trade prematurely based on a minor correction, you can always reestablish the position again.

Initial position sizing plays a big part in money management “don't take on too big of a position relative to your portfolio size. Novice investors should never use their entire account on one trade no matter how small the account

Know when you would like to get out of a position after a considerable profit has been made. Signs of topping could be a climax run, a spinning top or higher highs on lower volume.

Finally, cut any trade that doesn't act the way you originally analyzed it to act.

With these guidelines, you will be well on your way to solid money management skills that will help you profit in Wall Street year in and year out. Always remember, you are going to take-on losing trades at least half of the time. This is a tough concept to accept for most novice investors but it a fact. If you don't cut losses, you won't be investing for very long as you will run out of cash and the desire to continue to invest.

Stock Market Timeline

2008-09-18T09:36:00.001-07:00

The history of stock market is very rich and the efficient system that you use now for trading and investing in companies has evolved over centuries. All the policies and regulations have evolved through time as and when the policy makers felt the need for them. Wall Street was laid out as early as in 1685. The investment market was born after a century in 1792 when five securities were traded. These included three government bonds and two bank stocks.

The Buttonwood Agreement was the historic pact that around twenty four brokers and merchants signed agreeing to trade securities for commission. It is said that the New York Stock Exchange began as a result of this pact. Slowly the market started gaining prominence and securities such as bank stocks, insurance stocks and government bonds had begun to trade. As the market gained prominence, the requirement of rules and regulations for the proper conduct of trading and investing was felt. The New York Stock & Exchange Board was formed at wall street. In 1853, the board required the companies which were listed on the exchange to produce complete statements of shares outstanding and capital resources.

The first stock market crash happened in 1853 when the market lost up to 45% of value. The reason was the collapse of the Ohio Life Insurance & Trust Company. In 1866, the first transatlantic cable was laid which enabled instant communication between New York and London. In 1867, the first stock ticker was invented and this brought the current prices of the companies to all the investors. In 1872, the specialist was created. The specialist is a trader who trades only in one stock because of which he sits in one location on the trading floor. In 1895, it was suggested that companies start providing annual reports of their performance to their shareholders. Then in the subsequent year, there was another development in the form of the wall street journal publishing the Dow Jones Industrial average for the first time.

The Federal Reserve System was created in 1913 to bring structure to the control credit and to structure the banking system. The market price was quoted as a percentage of the par value. This was changed to prices quoted in dollars. In 1929 the largest crash in terms of the volume of shares takes place. This marked the beginning of the great depression. The Dow Jones reached the lowest value from its 1929 peak in 1932. It was quoting 89% down at that point of time. The Securities and Exchange Commission is established to provide full disclosure to investors and to prevent fraudulent activities in connection with the sale of securities. Women enter the trading floor in 1943 ending the reign of men. In 1966, several important developments took place. The Securities Investment Protection Corporation was set up to provide protection to the clients of brokerage firms that collapse. The New York futures exchange was formed in 1979. In 1996, real time tickers were launched in CNBC and CNN thus bringing the stock prices to investors and traders instantly.

As you can see, the rich history is incomparable to the history of any other stock market in the world. NYSE is the biggest stock exchange in the world and it will continue to remain so for some time to come.

Who Wants To Be A Stock Market Millionaire?

2008-09-18T09:36:00.000-07:00

I know many people who want to be stock market millionaires. They ask how all the time on “The Wallet Doctor” Ezine. It is actually not that complex if you know what you are doing. Becoming a millionaire does require discipline and the more the better.

There are a couple of main concepts that you have to master to become a stock market millionaire. First, you have to control, reduce and eliminate your family expenses. If you can get past this step you are well on you way. Most people feel restricted when they lower their expenses but there are creative ways to do this. Don’t take your children into stores and don’t buy them junk.

My wife and I like to eat at fine restaurants. We reduce the bill substantially by sharing a plate. If a restaurant charges a “plate” fee we never go back. We also began accelerating our mortgage years ago and are now amazed at how little we have left to pay off.

Second, you have to optimize your income. You can do this by getting a second job or selling things or services in your off hours. I know this is a lot more work then your peers are putting out but financial freedom doesn’t not come free. The first two steps amount to optimizing your cash flow which is the difference between your total income and total expenses.

Third, you need to insure against all insurable calamities. These calamities include illness, death of a breadwinner, vehicular accidents, and property losses. A good insurance agent is literally worth their weight in gold (or more) in helping you create an umbrella insurance plan that covers all insurance contingencies that are economically viable to cover.

Fourth, you need to dedicate yourself to a consistent, persistent plan of study in the area of stock investing that includes investing scams and understanding risk. Fundamentally you must learn how to buy stocks low and sell them later at high price. To become a stock market millionaire this will be come your guiding principal. The more you study techniques as well as people who have been fantastically successful in the stock market the more you are going to understand what it takes to make your personal finances work toward making you a millionaire stock investor.

Fifth, you have to absolutely believe you can do it. Only you can believe in you and when you do people fall in behind you to help. The more time you spend daydreaming that you can do it the more likely you will make it a reality. Everybody’s financial path is highly personal. For me I felt I needed a Ph.D. in finance to get down my financial path but you probably won’t. You may recognize that you need to do different things to put all of these five steps to becoming a millionaire into place. Believe you can become a stock market millionaire, wake up each and every day and do what you know you need to do to make it happen and it will!

How To Make Profit With Market Segmentation

2008-09-16T01:22:00.001-07:00

MARKET SEGMENTATION

Market Segmentation is a simple concept, that can help your business to gain an advantage, even in very competitive online categories.

You know that 20 percent of buyers consume 80 percent of your product, so the idea of market segmentation is that you could sell much more products with much less effort if you can identify that 20 percent and find others like them.

People that's interested in it, and consume your product, can be thought as a market segment. So the idea behind market segmentation is to target, communicate, sell and obtain feedback of your best customers.

In order to survive and prosper as a company, you need to chose the right segment fo the market, then you will achieve large sales volume and profitability

In a market segmentation campaign, to choose the right segment of market, the segments should be:

* measurable
* big enough to generate good sales volume
* reachable by your company's distribution methods

You must also know wich are the similar products that can be offered to your buyers, and your competitor's sales strategy.

You need to satisfy and keep those consumers that love your products or services, being aware that new products are going to be offered to them and with different strategies.

And of course, once you have segmented your market, you must offer different products and may be use different sales strategies for the different segments.

In example if you offer sport shoes, the market segmentation can be done by sport or by gender, and then further segment your market with specialized models for each sport, gender and age.

As you know, we are a home business site. Many people is interested in having their own home business, but, do they all want the same?

You can be shure that not everybody wants the same, and that's why we have

- The Monthly Residual Income Program for those that want to build a big business with hundreds of affiliates working for them
- Make Money With Your Own Web Site for those that want to start their home business owning a web site
- How to Sell on The Web for those that want to become marketing experts
- The Viral Marketing Secrets for those that believe that viral marketing is the best marketing too that you can use
- etc.

Every time that a new product's idea comes to your mind, you must first estimate the size of your target market, to know if there are going to be enough buyers to provide you enough sales and profits.

Another important issue, is that you must try to sell more than once to the same prospects. 30% of people that already bought from you, will want to buy again.

So if you offer a product that is bought once in a lifetime, unless you have such a big market that you don't care, you should try to find something else to offer to your segment of the market.

A Review of the Stock Market Code

2008-09-16T01:21:00.001-07:00

All we have to say is don't judge a sales page, by well, the sales page. At the beginning you will come across a subscription box that is placed so far to the right that you have to scroll over in order to see it. However, once the page loads everything comes back center stage and you'll find yourself in front of The Stock Market Code. Best of all you get 60 days to try out the system and they tell you right in the very beginning.

Then of course you get a full refund if you aren't satisfied with everything The Stock Market Code has to offer. During the start of your reading you will notice that this covers various short-cuts they want to share with you in the stock market industry. According to them, it could change your life forever, and while we've heard that statement time and time again, we never overlook anything. You never know when the hidden secret will show itself.

Asking the Questions

You'll find a bullet point area that asks a series of questions about things you will most likely want to answer. Some of them include wondering if your frustrated with whipsaws. Do great entry points elude you? Then of course, wondering if you'll ever find a simple trading strategy that will work wonders and you'll just be able to reap the rewards. Basically, answer yes to any of them and then Barry Willis says he can help you.

The Story

See, many of us believe that someone who owns a product like The Stock Market Code has always had it good. Sure, they've made great money, but you have to remember greatness only starts after many successful failures. This is the feeling you get from Barry as he talks about the good times, the not so good times, and then the ugliest of times. Each of them rendered life lessons that he'll never forget.

However, throughout the process of this story we couldn't help but think about the main message he was stringing along. The point is he went through all the trials and tribulations as well as enjoyed the other side of life full of money, power, and celebrity appeal. Even though 2001 brought a major crash in the economy, he feels you shouldn't have to endure the same problems he did years ago.

Our Overall Analysis

You're going to need about fifteen to twenty minutes if you want to get an in depth look at The Stock Market Code. While it sounds like a lot of time, you'll enjoy the 24 things he has to offer that could virtually change the landscape of the way you live, your overall lifestyle, and that of your family as well. Just read some of the testimonials that have been left on his sales page.

Whatever you decide to do, we know Barry will have you thinking. It's hard to believe that financial bliss can become a reality for many individuals who have struggled all their lives, but it can happen. The only way it does though is by taking the time and energy to help yourself. It could start here, and if by chance it doesn't, you'll learn something in the process for next time.

Investment Strategies for the Stock Market

2008-09-16T01:19:00.000-07:00

When it comes to Investment Strategies for the Stock Market most people believe that there is only one safe strategy.

‘Buy and Hold’

The reason why most people believe that this is the safest investment strategy for the stock market is because that is exactly what their financial advisers have told them. Have you ever heard the phrase

“The key to successful investing is Time In the Market NOT Timing the Market”

I believe that this is a lazy approach to investing and is really just an excuse to hide the fact that some financial advisers have no idea what the market is doing. Wouldn’t successful investors use multiple investment strategies for the stock market? If the market is at a record high and there is a chance of a correction then surely there is something that you can do (other than selling your stocks) to protect some of your profits?

The reason why financial advisers don’t want you to know about any other investment strategies for the stock market (other than buy and hold) is because it isn’t in their interest for you to know about them. They want you to remain reliant on their advice and have you feel as if the stock market is a very scary and dangerous tool – only to be tamed by the so called experts.

What is your opinion? I certainly believe that at times the stock market can be very scary and dangerous but like any thing; the more you educate yourself the more comfortable you will feel with it.

So what are some Investment Strategies for the Stock Market other than buy and hold?

Let’s have a quick look one very simply investment strategies that can be used to great effect on any stock market.

Covered Calls

This is one of the most effective, low risk investment strategies that can be used on the stock market. The basic idea to sell call options on a stock that you own. What? I hear you saying. In simple terms it means that you are renting out your shares for a monthly premium and in return you are giving somebody the option to buy your shares at a predetermined price that is higher than what you paid for them.

Let’s say you own 1000 XYZ shares that are worth $15.00 each. People will pay you a monthly premium to have the option to buy these XYZ shares at a predetermined price within a predetermined time frame.

For instance someone might offer you $500 for the right to buy your shares at $16.00 within the next month. Why would they do this? Because if the shares happen rise up to $18.00 they will be able to buy 1000 XYZ shares at a $2.00 discount per share ($18-$16).

The great thing about this strategy is that both parties can win e.g. If this was to happen you would be happy too because you would get to keep the $500 premium and you would also make $1.00 from every share that you sold because you bought them at $15.00 and sold them at $16.00.

What happens if the share price was to go down?

If the share price was to go down from $15.00 to $13.00 then you would still get to keep the $500 premium which would reduce your paper loss from $2.00 per share to $1.50 per share.

Writing covered calls (or renting out your shares) is one of the most commonly used investment strategies by the rich. It is a great low risk low risk investment strategy for the stock market that everybody deserves to know about.

When it comes to Investment Strategies for the Stock Market most people believe that there is only one safe strategy.

‘Buy and Hold’

“The key to successful investing is Time In the Market NOT Timing the Market”

What is your opinion? I certainly believe that at times the stock market can be very scary and dangerous but like any thing; the more you educate yourself the more comfortable you will feel with it.

So what are some Investment Strategies for the Stock Market other than buy and hold?

Let’s have a quick look one very simply investment strategies that can be used to great effect on any stock market.

Covered Calls

What happens if the share price was to go down?

If the share price was to go down from $15.00 to $13.00 then you would still get to keep the $500 premium which would reduce your paper loss from $2.00 per share to $1.50 per share.

So there you have it a simple investment strategy for the stock market that can help increase your cash flow and also gives you downside protection. What more could you ask for in a stock market investment strategy? So next time you see your financial adviser ask them about covered calls and see what response you get. My bet is they probably won’t even know what you’re talking about because their university course didn’t teach that subject.

In The Stock Market Greater Risk Could Mean Greater Profit

2008-09-13T01:51:00.000-07:00

One of the many ways to make a larger profit on the stock market is to take grater risks. There are several advanced strategies and techniques and/or strategies that you can use. Each has its own level of risk and as we say, "In the stock market, greater risk could mean greater profit".

Before we get into the different techniques, it needs to be clear that when using any trading strategy or technique, you should play with money that is liquid. In other words, money you can live without, should things go badly. Never play the market with money you need to survive. Trade responsibly and knowledgably.

One strategy is investing in an IPO (Initial Public Offer). An IPO is way that a company is moved from being privately owned to being publicly held, or stockholder owned. Simply put, they offer common stock to a few hand picked investors. If the need for capital is greater, then they might offer stock on the open market.

One way to use IPOs is to jump in right at the beginning, buy stock at the initial IPO price and hope for a big price jump initially. Then you would sell those shares on the stock floor and pocket the profits. The risk here is that the company may not be accepted well by investors at first. If that happens, the stock price will fall and you will lose money.

Another IPO technique is to simply sit back and watch the IPO stock after it has opened. If the stock is fairly priced, and goes up in value you can buy and make a profit but not as much as the trader who jumps in as soon as the stock is issued. The basic rule is "buy low, sell high and get out". This method carries the same risk but in the stock market, greater profit means greater risk.

Short selling is an advanced technique that is not used to its full potential. This is due to the high-risk level involved. Short selling is a serious speculation technique and carries maximum risk. A trader will sell stocks he doesn't actually have at a higher price in the hope of a downturn. If the stock goes down, he buys at the lower price, pockets the profit and returns the shares to the owners. The risk here is very high for obvious reasons. If the shares price increases rather than decreases, the trader loses money. Plus there is still the matter of the broker's commission, which is still owed regardless.

Then there is margin trading where a trader borrows money to buy a stock. The money can be borrowed from a broker, normally up to 50% of the investment. Obviously, if the stock goes up, you make the profit on your 50% of the purchase price and pay the broker back. Without the benefit of margin trading, the trader shoulders the responsibility of the entire purchase plus the broker's commissions.

Of course, if the stock goes down, you have lost part of your original cash investment and you still need to pay the broker for the loan and his commissions. This is another technique that is heavily laden with speculation and carries maximum risk.

Trading stocks in this way is not for the faint of heart. The promise of big profits is an aphrodisiac, but in the stock market, greater risk could mean greater profit. Remember to trade intelligently and responsibly at all times.

Mastering Your Mind For Stock Market Profit

2008-09-13T01:49:00.000-07:00

The stock market is made up solely of buyers and sellers. These buyers and sellers may be super-huge, billion dollar institutions trading enormous amounts of money everyday or private individuals trading just one or two parcels of shares each year. Regardless, at its core, the market is made up 100% of people. People with emotions just like you and me.

You’ve no doubt heard the phrase, “History repeats itself”. Well, despite all of our technological achievements, we have still not mastered our emotions. History in the stock market always repeats itself because the markets are driven by two of the strongest human emotions, FEAR and GREED.

Markets boom and bust with cyclical regularity because of human nature. We are creatures of habit. For those who can accept this and learn to control their emotions, the rewards are outstanding. By recognising emotion in the markets, we can time our entry and exit strategies and profit from history repeating itself time and time again.

Investors like Warren Buffet recognise that investing is 80% psychological and only 20% mechanical. It doesn’t matter how good your system or strategy is. Unless you are mentally focused and as emotionless as possible, you will fail. This is much easier said than done, of course. Why? Because we spend our entire lives developing our psychological feelings towards money. These feelings are often referred to as Comfort Zones.

Comfort Zones

One of the most basic human needs is the feeling of Certainty. When we are certain of our surroundings we can rest easy and enjoy our lives. Uncertainty brings risk and makes us feel anxious and very uncomfortable. Since we were little children we have developed our comfort zones and we all have different comfort zones when it comes to money. Some of us feel that we must work very hard to make money. Others feel that they will never have money, or they don’t deserve to have money.

If you look at the wealthiest people in the world, very few live within these comfort zones. Their money comfort zones see them having an abundance of money. They believe that there is an enormous amount of money, more than enough for everyone to enjoy. They know that there are trillions of dollars circulating the world everyday looking for a home. They know how to make money and that making it is ridiculously simple.

Our emotion of certainty dictates our comfort zones. If we are certain that money is hard to make, then it will be, and we will be certain in our comfort zone. We would probably not be rich, but in our minds, we would be right. Alternatively, if we are certain that money is easy to make, and we just have to know how, than it will be easy to make, and we will be certain in our comfort zone.

Obviously, if your comfort zone has you believing that money is difficult to make, or some other negative feeling, then you will have to break out your comfort zone and climb into another one. When you do this, you will feel very uncertain. This can be very scary and is the reason why, despite all of the opportunities available, 95% of people end up broke or financially dependent when they reach 65 years of age.

Stock Trading Profit, Earnings Can Still Be Had Today

2008-09-10T07:33:00.001-07:00

Day trading most commonly refers to the practice of buying and selling stocks during the day so that at the end of the day you don't hold any shares overnight; you sell as many shares as you buy. You make money on the difference between the purchase and sales prices.

The main motivation for this style of trading is to make money every day so you don't sit on the shares , plus of course you eliminate the risk that the shares go down in value overnight. the motivation of this style of trading is to reduce the risk of holding a position overnight where the open price may have significantly changed from the previous day's closing price.

NASDAQ defined day trading by saying somebody is a Daytrader if he makes more than four buy and sell orders over a five-day period.

Prior to the year 2000 it was not uncommon for some of the most successful Daytraders to make more than a million dollars in a single day.

There were dozens of Daytrading Chatrooms where people were "told" what to buy and when to buy it.
Some Chatrooms had more than 500 members.

And most Daytraders, it is estimated as high as 99%, lost their shirt.
One of the reasons they lost their shirt is because they could trade on Margin.

Trading on Margin means that the brokerage firm which executes your trades will lend you up to 5 times your investment.
So if you had $10,000 in your trading account you could in some cases trade with $50,000.

However, if you lost on your trades, repayment was due immediately.

Since the heady dot com days of the year 2000 DayTrading has gone out of style and out of range.

Most brokerage firms have gone under or have consolidated, and staff has been reduced in the remaining firms by about 80%.

Trades that used to cost $35 to execute can now be had for as low as $4.-

Initially it happened because President Bush talked the economy down and Mr Greenspan kept on raising the interest rate to such a level that all optimism disappeared from the Market.

Up until this time like clockwork 2 or 3 days a week there were Stocks, mainly Internet Stocks, that would rise more than 30% early in the morning and then fall the same amount five minutes before closing so people could take profit.

If you were on the ball you could make a lot of money as a DayTrader.

You could also lose a lot of money.

Those days no longer exist.

It is very rare to see stocks vary more than 30% in one day so the profit potential first of all is not as great, and the ability to catch a percentage of the increase in the price of a stock has also lessened.

One of the reasons also is that Internet Stocks which were totally overvalued are no longer overvalued and as a matter of fact have risen much less than any other type of Stock.

Another reason is that there are very few IPO's and even Google's IPO did not take off for quite some time.

If it was not for the spectacular performance of Google , Internet Stocks lost more than 8% in 2005.

Even Ebay lost more than a quarter of its value.

However, if you are shrewd, you can still make money as a DayTrader but it ain't easy.

What do you think happens when a company invents a car that runs on water?

If you could get news about this company very early you could make a lot of money.

Not many people know that you can trade the NASDAQ Stock Market as early as 6 AM.

So if you are a Stock Market News Hound and like to get up really early in the morning and have nerves of steel you could buy the stock at 6 AM and sell it at 9.29 AM to everybody else starting a regular trading day.

This will not happen very often, the fact that there is spectacular news.

But if you are patient it may happen once a month.

One of the many ways to make a larger profit on the stock market is to take grater risks. There are several advanced strategies and techniques and/or

2008-09-10T07:32:00.001-07:00

In The Stock Market Greater Risk Could Mean Greater Profit

2008-09-10T07:31:00.000-07:00

Mastering Your Mind For Stock Market Profit

2008-09-10T07:30:00.000-07:00

Comfort Zones

The stock market doctor makes a short prognosis

2008-09-01T12:24:00.001-07:00

THE STOCK MARKET DOCTOR MAKES A SHORT PROGNOSIS

Unfortunately, our doctor is not Doctor Feel Good…at least not in the short run.

The prognosis is not good for the stock markets in the U.S. and Europe. Sure, they can rally, but don't count on any long bull runs. Any stock market runs we get in coming months are more likely to be bear runs, and those are seldom fun.

In our memo for November 26, we predicted four types of events to look for which would take place to ultimately end the current world liquidity crisis.

Prediction 1: New capital investments by sovereign wealth funds and wealthy companies into banks and other financial institutions with problems. This has begun happening and more investments are announced everyday.

Prediction 2: World central banks are going to provide increasing liquidity...this is happening with a vengeance. It seems that every day interest rates are being lowered somewhere, and everyday more liquidity is being provided to the markets by central banks. The latest are large coordinated loans by central banks to keep liquidity in the system. Instead of lending only on conservative government bonds, as had long been the policy, central banks are willing to take other forms of collateral, even junk mortgage paper. In spite of this, the crisis is not curing itself and illiquidity still pervades the world mortgage markets.

Central bank lending against low quality assets like mortgage paper is just a step away from prediction number three.

Prediction 3: An organization will be funded in the U.S. and/or Europe to buy bad mortgages and to make a market in them to provide a market price for illiquid mortgages.

Prediction 4: The U.S. and foreign governments will actually buy low the quality debt. This may happen sooner rather than later. Trial balloons are being floated in Washington D.C. in the last couple of days to renew the Home Owners Loan Corp. This organization was started in 1933 at the depths of the great depression, to buy mortgages from banks at a discount and refinance them on easier terms. It was closed down in 1951 once the depression and the mortgage crisis of the 1930's was long over.

Already in just three weeks, predictions one and two have happened, and will likely continue. Predictions three and four will have to happen soon if the U.S. wants to avert long-term real estate problems like those experienced during the 1930's.

THE CRISIS IS LEADING TO A RECESSION IN THE U.S., AND MAYBE IN EUROPE

This is temporary bad news for all markets. Long term, it is good news.

Historically, when people begin to realize that a recession is probably going to develop a bear market decline sets in. This may happen in the next few weeks. The process of this market decline and recovery will have several steps.

Step 1 is a "slowing down" in world investing psychology. Most all markets see a decline in their P/E ratios and even if corporate earnings continue to grow the stock markets decline in value.
Step 2 will be when fear recedes enough for the realization to dawn that developing economies especially those of India, China, Brazil and Russia have still been growing. This realization leads to an earlier recovery in these markets.

Step 3 will be when investors begin to realize that the growing markets continue to consume commodities at a rapid rate. Thus, commodity prices can begin a new uptrend.

Step 4 is the realization occurs to investors that developed economies will once again grow, and corporate profits growth will pick up. Finally, their stock markets also rise.

SUMMARY

The temporary bad news is that we believe most global markets for stocks and commodities will fall for the next few months. The long-term good news for the nimble is that we can repurchase at lower prices in a few months, and be ready for the time when a new market uptrend will begin.

Guild Investment Management, Inc., a registered investment advisor. All material presented herein is believed to be reliable. Investment recommendations and opinions expressed in these reports may change without prior notice.

You can also read our past periodic market and economic commentary articles by going to the Commentary Archive on our web site www.guildinvestment.com.

These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions.

The information in this article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Guild Investment Management to any registration requirement within such jurisdiction or country. Any opinions expressed herein, are subject to change without notice. In addition, there are many market, currency, economic, political, business, technological and other risks that are beyond our control. We make reasonable efforts to provide accurate content in these articles; however, some content and some of the assumptions, formulas, algorithms and other data that impact the content may be inaccurate, outdated, or otherwise inappropriate. In addition, we may have conflicts of interest with respect to any investments mentioned. Our principals and our clients may hold positions in investments mentioned on the site or we may take positions contrary to investments mentioned.

What's better? Shares or Managed Funds?

2008-09-01T12:23:00.001-07:00

Many people are now dabbling in online share trading as a way to lower their commission fees and experiment with the stock market. While this can prove financially rewarding those with little experience in the stock market could find this a risky strategy. Some financial gurus are recommending a safer option of managed funds for those with little experience in the stock market. It is important to do background research into the difference between managed funds and direct share investing and work out what is the best investment for you.

The simplest way to access the stock market from home is usually through online brokerage websites, but this can have its disadvantages: if you're looking to make serious money, you're going to need a large amount of money for investments, market knowledge, and time to research stock market trends. While some people may thrive on the independence that online share trading offers, it's very easy to lose money, as you're competing with professionals who have worked in the stock market for several years. Many at home day traders may find that the amount of research needed into share trends and smart investments will offset any financial gain made. But like all things that are risky, the pay-off from making smart investments can be worth it.

Another option for novices in the stock market is investing in managed funds. This allows experts to join your money with other investors, and make decisions in your best interest. Managed funds often are a more popular choice for stock market beginners, as you can still choose what investments you'd like to make, but under the guidance of an experienced professional. Options such as managed funds can broaden your investment opportunities. Using these investment methods can open doors, such as investing in commercial property which most individual investors would not have the opportunity or funds to be able to do. However, with little risk comes little return; you're much less likely to reap as many financial rewards as you would have through direct investing. Additionally, management fees can be expensive, which is a turnoff for clients who only want to make a minor profit. But for those who are novices in the stock market, it's often a better choice to learn from an experienced day trader, as opposed to going it alone.

It is important to work out what is the right investment option for you, and this will come down to what expectations you have. If you're a knowledgeable day trader and have the know-how of stock market trends, you may be able to get away with paying the fees associated with managed funds by making savvy investment choices, compared to a beginner. For those with little experience of share trading and stock market investments it may be a better option to get guidance from a managed fund run by professional day traders, compared to doing it on your own.

Stock Investing - How the Stock Market Works

2008-08-28T11:56:00.001-07:00

Stock investing isn't easy, and it can certainly be stressful. But don't think it's off-limits to average people-I've helped thousands of folks reach their financial dreams just by providing a little bit of insight into Wall Street. To help you get started on the way to financial freedom, I'd like to provide a general framework to outline how the stock market works and how to wisely invest your money.

Investing 101: Economics comes in two parts-microeconomics and macroeconomics. The "micro" view deals with the actions of businesses and consumers like you and me, while the "macro" view deals with numbers on a much larger scale-like GDP, inflation, unemployment and international trade. This might sound a bit complicated, because ultimately there is one economy. But the economic activity of everyday folks often is influenced by changes in the big picture. Similarly, the action of thousands of individual consumers can dramatically shift the broader statistics.

How the Stock Market Works

The stock market is little more than a representation of economic trends, both small and large. The market is a crucial components of the economy because it gives companies access to capital, and investors a chance to profit through ownership in that firm. Collectively, investors are very smart. That means the best companies will generally find willing buyers, driving the price up, and the worst will be left all alone, and the price will suffer. Think of it as simple "supply and demand" as it relates to your stake in a company. If a company has a good idea that is bound to make a lot of money, more people will want to get in on the action and will be willing to pay more to be a part of it. If a company fails to react to the economic trends and is doomed for failure, fewer people are willing to pay for a stake in its future.

The stock market is comprised of a) the primary market, where the initial public offering of securities originates; and b) the secondary market, where trading takes place.

Generally, the stock market affects business investment in three direct ways:

The market traditionally serves as a gauge of the expectations of the business-minded community. When the market is upbeat and the volume of transactions is high, this indicates a generally favorable business climate. This climate signals to companies that's there's plenty of capital available to pursue expansion plans. On the flipside, when the market is lethargic, executives frequently recoil and put expansion plans on hold because there's not enough money out there.
The second effect has to do with the relative ease of issuing new securities. When businesses are looking to finance investments, they issue new stocks and bonds. The proceeds are then put towards purchasing plants and equipment to further facilitate a business expansion. When a market is buoyant, it's easier for companies to issue new securities and raise funds.
The third effect pertains to weak markets. When the market is sluggish, companies with healthy earnings will try to acquire other companies or buy up shares of their own stock instead of using those earnings to fund investment. This facilitates the overall growth of a fundamentally sound company, but has little growth impact on the overall economy.

Four Tips for Successful Stock Investing

In a nutshell, "investing" means the use of money in hope of making more money. But sometimes it's easier said than done. The best way to make money is to arm yourself with the necessary knowledge to plan your stock investing strategy.

First, ask yourself which method you prefer: fundamental analysis-measuring a company's intrinsic value-or technical analysis-studying charts and patterns to analyze market activity? Personally, I'm strongly in favor of picking stocks based on the ability to increase sales, widen profit margins and report strong earnings.
Objectivity and discipline are necessary when stock investing. Remove as much of the emotion out of your strategy as possible. You'd be surprised how many investors fall in love with their stocks. Be sure to exercise discipline when executing your stock investing strategy. If you're not willing to stick to it, the more you open yourself up to making mistakes.
Portfolio diversification is an absolute must when stock investing. Your strategy is only as effective as the strength of your portfolio. The more stocks you own from different sectors, and the more equally you weight them, the easier it is to reduce risk and maximize your chance for financial success. My general rule of thumb is to have 60% of your portfolio in conservative stocks with little volatility, 30% in moderately aggressive stocks, and 10% in the aggressive stocks that can really jump around. This helps reduce risk, and generate more even returns.
Remember: Growth is the fundamental characteristic you should be looking for when deciding where to invest. Businesses are constantly seeking new ways to maximize profits, and in order to do this they must expand. To expand, however, they need a healthy balance sheet with positive cash flow. Be sure to invest in companies with solid intrinsic value but also tremendous growth potential.

Understanding how the stock market works is crucial to developing an effective stock investing strategy. You don't need to be an expert to devise a strategy that's right for you, but sticking to a few Investing 101 tips can go a long way.

How To Win On The Stock Market

2008-08-28T11:55:00.003-07:00

I am somebody who loves to invest money on the stock market. Some might see this as a bit of a gamble which in a way it is, there are however certain steps people can take to limit this risk which may well help them to make money.

I see the stock market as a bit of a rollercoaster in that it is always going up and down. It has many peaks and troughs which can make it hard to know when it is the right time to invest or to sell. Some people see an event such as the terrorist attacks on September the eleventh, where the stock market fell in a big way, as a good time to invest where as other people may panic and sell all of their holdings in case of another attack.

I personally prefer to buy when the market is going through a bad period as I believe it is likely to eventually pick up and should if history is anything to go by, be even higher in the future. My way of thinking is buy low, sell high.

When purchasing a single stock, such as shares in one of the top companies such as Vodafone, I always remember the price that I bought the shares at and give the stock a target price. This is the price that I will sell at, if it ever reaches that level of course. I have to say that at times I am very tempted to hold onto the shares when they reach these target levels in the hope of even higher profits. I am normally able to keep to my plan of selling high and when I have let temptation get the better of me and have held on to the shares they always seem to end up falling back. I hope that I have now learned my lesson for the future, I think I have!

If the share price after for example three months has fallen by about twenty percent, I then increase my holding by purchasing even more shares. I will then set a new target level and just repeat the process. This in a way is similar to how a unit trust works through the method of pound cost averaging, where you are able to purchase more units when the unit price is lower for your monthly premium.

What I do and have explained above is quite risky and you need to be able to hold your nerve when the stock has a bad run. You also need to have a lot of patience. I certainly would only advise people to invest money that they can actually afford to lose as one day for example I could invest in a stock which does not recover. This plan would then prove to be a disaster and would cost me a lot of money.

So far I have been quite lucky and the plan has been working well for me. I do not invest huge amounts of money and see it as more of a hobby than a way to get rich quick.

How to Increase Your Returns in the Stock Market

2008-08-28T11:55:00.001-07:00

Rule 1: Block out the negative

One of the things I have problems with even today is getting over the fact that a stock just might not work out. If a stock went into red, then I would always feel trapped to stay in the stock until it gained some positive return from it. The problem with that method is that it might take a while before a stock comes back into positive territory and at that point you have already wasted too much time. Time is money, and if you waste it then you don't give yourself the best chance to make the most return.

For example, if stock A went down 15% in 6 months and then climbed 30% in the next 6 months, then throughout the year you really only made 15%. Although that might seem like a great return for one stock, the goal is for us to reach 40%+. It is important to maximize every opportunity.

So think twice when you keep a laggard in your portfolio. Is this the best play for you, or could your money be more efficient in another company.

Rule 2: Get rid of index funds

I have never really been a fan of index funds, and I have never actually owned one. Index funds are usually for those that don't want to take the time to actively manage their portfolio. Many times I think several people could easily beat these funds, so why waste your time with them? After management fees and under performance, you really are not going to be making any type of return that will help you get a great return.

Rule 3: Go where no man has gone before

Most of the richest people in the world got to where they were by doing something others don't often venture into, and the same idea goes for those successful in the stock market. If you just keep buying stocks that people recommend to you, then you will never really experience huge returns because these stocks will usually get burnt out quick. Once everybody wants in on the stock, it is almost a sure sign that the stock will turn negative pretty soon. So you have to look for those diamonds in the rough and stay with the smaller less known stocks.

So overall there are 3 rules that I think should be followed to improve your chances of get nice big returns in the stock market.

Block out the negative

Get rid of index funds

Go where no man has gone before

Remember these are just rules on how to get big returns there are many different ways to get the average single digit returns. In the end, you have to go against the grain of what the average investor does, and it doesn't hurt to have a bit of luck on your side.

What are some of your great returns? Are there any rules you think should be followed to help improve chances of getting returns?

How to Become a Successful Stock Market Trader

2008-08-28T11:54:00.001-07:00

Stock market investment is a very difficult business to predict, and people who are able to act according to their instincts are frequently the successful ones.

Every person, including the successful stock trader, is human and consequently makes mistakes.

However the successful stock trader:

-Adopts one specific system for managing his investments in the stock market, and then sticks to it consistently.

-Knows when is a good time to invest in a particular stock and even more importantly when is the best time to sell.

-Takes calculated risks, and minimizes his potential loss by waiting for a while after money has been lost, rather than buying or selling in a panic reaction.

-Is aware of and admits his mistakes, and is not ashamed of them but able to use them to his advantage in future transactions.

-Is able to analyse stocks critically, and knows how to carry out some basic and technical forms of analysis of the stock market.

-Is disciplined and patient, going through the necessary processes with practiced ease, and knowing when to get out of a particular investment.

-Is in charge of his situation, practicing mental discipline and strategic thinking.

-Has a strong desire to succeed.

-Learns from his mistakes, and moves on from them; the next time he is in a similar situation he will know better, and will be able to turn the mistake into profit by making use of what he has learnt.

-Protects the original investment; this is in fact his main and most important aim. His secondary aims are to manage and increase his profits. Sometimes there is very little to choose between a good decision and a bad one, but the successful trader knows the difference, and also knows when and how to act.

-Does not listen to gossip, rumors or tips when it comes to shares and investments in the stock market, but instead trusts in and follows his own judgment. He does not make decisions based on sentimental attachments with certain types of stocks or businesses.

-Knows his own abilities, weaknesses and strengths, and works within them.

-Knows his investments in detail.

-Plays it safe whilst also taking calculated risks.

-Most importantly, acts within the limits of the law, and the rules of operating on the stock market, because he is aware that this is the only way he can be successful, and also of the dangers of illicit trading practices.

Stock Market Timeline

2008-08-28T11:53:00.000-07:00

Top Stock Market Facts For All

2008-08-24T08:34:00.001-07:00

Companies are made up of stocks, some are traded publicly and others are owned privately. If stock in a company is public then you will be able to by them and by doing this you are becoming the owner of small percentages of the company. These are the smallest unit of ownership that exists.

Owning tock in any company is quite a responsibility. You will be able to take part in a lot of different aspects of the business such as voting for the board, representatives and other important decisions the company will make in the coming years. In some cases you may even be asked your opinion on a merger.

The benefit to you as a shareholder in the company is that you will be able to collect profits. When the company makes money so do you, it is that simple. For each stock share you have in the company you will get a certain amount of money, this can be very little to a lot, it all depends on the stock and how the company is profiting at any given time.

One of the perks to owning stock in a company is that it is easy to liquidate when you need to. There is not a lot of red tape to deal with. A quick call to your stockbroker and you can have the money in your hands relatively quickly, not always as quick as a trip to the bank but most stocks pay better than the interest on your savings account.

It is your stockbroker that will do much of the work for you, if you choose to hire one. This is the person who will sniff out potential buyers and who will broker the deal. This is also the professional who will do the actual buying for you as well. Not just anyone can make transaction in the stock exchange, your broker can do all of the things that you cannot, that is why they are so necessary for your success.

These are not the only job that a good stockbroker will undertake when it comes to you and the stock market. He or she should also be able to give you sound advice about which companies to buy into and which to avoid.

Not all stock brokers are created equal and that is why you need to be sure to choose a reputable stockbroker or brokerage company. Take a good look at their record to make sure they are legit and worth trusting with your money.

Buying stock in a company is a great way to expand your financial portfolio and choosing the right stockbroker is the first step in the process of investing in the stock market. This person can literally shape your financial future, choose this person wisely and you can have a great career in stocks. If you choose the companies to invest in well and you take your responsibilities seriously, you could come out of these deals with a lot more money than when you went in.

Stock Market Trading Strategies

2008-08-24T08:32:00.000-07:00

v The trend of the market as indicated by the Wyckoff Wave indicates the line of least resistance. It reflects the direction in which most of the individual issues are moving. Traders who take positions that are in harmony with the line of least resistance are more likely to experience positive results than are traders who try to fight the trend. It is always better to have the market working for you than against you. There are always individual issues that make huge moves against the trend, but these are relatively rare.

The odds of finding one of these counter trend wonders are much smaller than are the odds of selecting an issue that is going to perform as well or better than the trend of the market.

Trading in harmony with the market means taking long positions when the market as measured by the Wyckoff Wave is in a defined up trend channel.

It means taking short positions when the market is in a defined down trend channel. When the defined trend is neutral or a trading range, trading in harmony with the market can mean standing aside and let the bulls and bears battle for control of the action, or consider opportunities on both sides of the market.

However, Wyckoff discourages being in positions on both sides of the market at the same time. Theoretically, trading both sides at once while the market is in a trading range is possible, but it is emotionally difficult. Whenever emotions enter the picture, the odds of making costly mistakes increases.

To avoid these errors make a commitment to never be long and short at the same time.

Just because the trend of the market and that of an individual issue are pointed in the same direction does not mean that the trader automatically has a green light to take a long position if the trends are pointed upward or a short position if the trends are pointed downward.

Remember what Wyckoff teaches in step one of the Wyckoff method. Knowing the position of the price in the trend is as important as knowing the direction of the trend. Situation where the market and an individual issue under consideration for a long position are both located near the top of their up trend channels should be avoided in favor of those where the positions are near the bottom of the trend channels. When short positions are being considered in down trends, it is best to locate those situations where both the market and the individual issue are positioned near the top of their down trend channels. If trading ranges are going to be traded, look for those instances where both the general market and the individual issue are positioned near the very top or the very bottom of their trading ranges.

An important concept in applying step two of the Wyckoff method is relative strength and/or weakness. Although most individual issues will be in the same trend as the general market and many of them will even be in the same position in their trends as the market, not all of these are the best candidates for new positions. All up trends and down trends are the result of a series of trusts in the direction of the trend separated by corrections. Some individual issues that are in harmony with the market from the stand point of the direction in which their trends are pointed will make relatively larger thrusts and experience relatively smaller corrections than the market as a whole.

These are the issues that are most likely to have the best potential to produce a profitable trade. Relative strength or weakness can be measured as soon as the first thrust in a trend has been completed. This will likely be even before the trend channel has been clearly defined. Those issues that have made larger thrusts than the market are the ones that should be watched closely as the prices make their first correction. The issues that have made the largest thrusts relative to that made by the market and that then make the smallest corrections relative to the market are most likely to perform well on the next thrust in the direction of the trend. These are the stocks that deserve the most consideration for new positions. This technique can also be used later in the development of an advance or decline when there are additional thrusts and corrections to consider. Those issues that most consistently out perform the market are most likely to produce a profitable trade.

The concept of relative strength and weakness can be helpful in locating trade candidates when the market is in a defined trading range. If the market is in a trading range, most individual issues will also be in trading ranges. However, some will be in up trends and some will be in down trends. Those that are trending up or down are relatively stronger or weaker than the market. These are the issues to consider first when looking for new positions. However, consideration must always be given to the position of the market in its trading range and the individual issue in its up or down trend. If both positions do not favor the likelihood of a rally or reaction, opening a position in that individual issue is discouraged. After the stocks that are trending up or down, attention can be directed to those that like the market are also in trading ranges. Here again, the positions of both the market and the stock are important issues to consider before opening a position.

The merits of trading in harmony with the market may seem obvious. However, most traders are exposed to a stream of market noise from brokers, friends, relatives, co-workers and the media. This bombardment of frequently conflicting information and misinformation can cause a trader to get distracted from those things that are really important. Step two of the Wyckoff method is one of those really important things. It along with the other four steps of the method are the best foundation on which to build a successful market operation.

Investment Strategies For the Stock Market

2008-08-17T20:49:00.001-07:00

When it comes to Investment Strategies for the Stock Market most people believe that there is only one safe strategy.

'Buy and Hold'

The reason why most people believe that this is the safest investment strategy for the stock market is because that is exactly what their financial advisors have told them. Have you ever heard the phrase

"The key to successful investing is Time In the Market NOT Timing the Market"

I believe that this is a lazy approach to investing and is really just an excuse to hide the fact that some financial advisors have no idea what the market is doing. Wouldn't successful investors use multiple investment strategies for the stock market? If the market is at a record high and there is a chance of a correction then surely there is something that you can do (other than selling your stocks) to protect some of your profits?

The reason why financial advisors don't want you to know about any other investment strategies for the stock market (other than buy and hold) is because it isn't in their interest for you to know about them. They want you to remain reliant on their advice and have you feel as if the stock market is a very scary and dangerous tool - only to be tamed by the so called experts.

What is your opinion? I certainly believe that at times the stock market can be very scary and dangerous but like any thing; the more you educate yourself the more comfortable you will feel with it.

So what are some Investment Strategies for the Stock Market other than buy and hold?

Let's have a quick look one very simply investment strategies that can be used to great effect on any stock market.

Covered Calls

Let's say you own 1000 XYZ shares that are worth $15.00 each. People will pay you a monthly premium to have the option to buy these XYZ shares at a predetermined price within a predetermined time frame.

What happens if the share price was to go down?

If the share price was to go down from $15.00 to $13.00 then you would still get to keep the $500 premium which would reduce your paper loss from $2.00 per share to $1.50 per share.

So there you have it a simple investment strategy for the stock market that can help increase your cash flow and also gives you downside protection. What more could you ask for in a stock market investment strategy? So next time you see your financial advisor ask them about covered calls and see what response you get. My bet is they probably won't even know what you're talking about because their university course didn't teach that subject.

Free Stock Market Tickers

2008-08-17T20:48:00.001-07:00

Firstly, a tick is any movement, either upwards or downwards, however small it may be, in the price of scrip, therefore, a Free Stock Market Ticker will automatically track each transaction which occurs on the floors of a bourse, including volumes traded for particular scrip, onto a narrow strip of paper or tape.

A Stock Market Ticker is a running report of the prices and trading volume of securities which are traded on the various stock exchanges. A Stock Market Ticker is an up and down movement in the sale price of a particular security. Since the days of the paper ticker tape dating all the way back to the year 1867, Stock Market Tickers have developed over a period of time and has now become fully electronic with most of them being presented in real time or probably with only a small delay which may not exceed twenty minutes.

NASDAQ.com features several Stock Market Tickers tools which will assist investors to keep a watch on their important stocks.

The NASDAQ Market Ticker-this Free Stock Market Ticker permits you to monitor your investments right at your table at home .This NASDAQ Free Stock Market Ticker includes quotes, net change, percent change for NASDAQ, Amex, NYSE and OTCBB stocks; updates to important and fundamental stock market indices, most actively traded lists for NASDAQ, NYSE and Amex -all based on your personal preferences and the top ten headlines. These Free Stock Market Ticker tools permit intelligent investors to stay one step ahead of other investors. The NASDAQ Free Stock Market Ticker hopes that investors will enjoy using them and welcome suggestions, views, responses so that they can accordingly make changes in this Free Stock Market Ticker in the interest of all investors.

NADAQ .com has a short comment form on its website with the specific aim of improving the content of this Free Stock Market Ticker.

Let us try to understand what is the Ticker Tape-we have all seen them on business programs or financial news networks -a series of numbers, figures, statistics scrolling at the bottom of the T.V screen which may appear baffling to a new investor.

Some people may choose to block out the Ticket tape while others may decide not to ignore but to study it carefully and use that knowledge to better the quality of the investments they make. This Free Stock Market Ticker can prove to be an economical way of furthering the return of ones investments; all these figures may appear to be baffling to an inexperienced investor-the key is to understand this Free Stock Market Ticker, then one can use it to ones advantage.

Random Stock Market Behavio

2008-08-17T20:47:00.000-07:00

Gambling your Way to the Market
If you have the money and would like investing it in the stock market, you would do well by studying first the market. It is important for you to know the stock market behavior and the factors that would influence it. There are some who consider investing in the stock market as some sort of a gamble. That the stock market behavior is just too unpredictable and winning or losing in the stock market will depend on pure luck.

People who considers investing in the stock market as a gamble believes that the market cannot be predicted as to the course it would take at any given time. They think of the market as some sort of a rudderless boat floating by its lonesome self without any set of direction to take. You will be lucky if the tide sets the rudderless boat or stock market behavior in your direction but if not, you lose.

Indeed, because of their belief that investing in the stock market is some sort of a game of chance, there are stock market investors, who would even go to the extent of consulting their horoscope before doing their trade. Many Chinese stock market investors even have Feng Shui experts guiding them when to invest or trade in the market.

The Feng Shui Experience
A clear case of this situation wherein investors of a stock market believes that the stock market behavior is simply erratic, random and governed by luck and even by the positioning of stars and other unseen forces such as Feng Shui was demonstrated in Hong Kong when Financial Secretary Henry Tang presented Hong Kong's Budget for 2004/2005.

He made his presentation in a televised coverage. The Finance Secretary was dressed in a dark suit, white shirt and with a corresponding tie maroon red in color. While he was making his TV budget presentation, the TV screen bottom crawler which indicated real time Hang Seng Index performance, started dropping until it dropped to a low of 180.41 points.

Many Chinese stock market investors who have seen the precarious drop of the Hang Seng Index, which is Hong Kong stock market Index, blamed the entire stock market behavior to the colors of the Finance Secretary outfit during the time he made his TV budget presentation.

They pointed out that the colors of water represented by dark blue or black and metal which has white for its color and fire for red and maroon colors are simply against Feng Shui. This is what triggered the very bad behavior of the stock market when the Finance Secretary went on TV, they said.

Economist on the other hand would simply dismiss this behavior of the market as brought about by the color of the Finance Secretary's outfit due to bad Feng Shui. They reasoned that it was not Feng Shui that made the market behave badly. Rather, it was the belief of the investors in Feng Shui that made the market went down. Thus, in effect, it was human attitude which was fear that caused the market to behave badly.

To point out, they noted that while the Finance Secretary was on TV, many investors watching the proceedings were calling their brokers to sell shares rather than buy because they believe that the colors of the Secretary's outfit carries ominous and dire consequences to the economy because it contradicts Feng Shui, while all the while discussing the country's budget for the year. And because of instant communication through mobile phones, there was suddenly a deluge to sell that even while the secretary was still on TV, the Chinese belief in Feng Shui became evident with the heavy downward spiral of the stock market, all because of his color choice of tie, shirt and suit.

Market Behavior and Public Perception
This clearly shows that the market behavior is determined by the public's perception that will have anything to do with the economy. As many successful stock market traders would say, trading is not determined by gut feel but by how any news or information will affect your gut. In effect, they are saying that a market behavior will depend on the present environment and on the public's perception of the near future.

Seasoned traders debunk the idea that stock market behaves at random and there is really no basis for predicting its movements by using whatever forms of analysis. They reasoned out that just like its human conceivers, the market behavior will depend on the fears and greed of its maker in relation to material wealth and resources as affected by natural factors. History repeats itself, so does the stock market charts that continuously show similar patterns since the late 60s.

For this matter, when you do the market, study your options carefully and always consider the stock market behavior to the latest news that you have just heard from the breaking news of Fox News and CNN.

Minimum Risk Stock Market Investing

2008-08-10T04:33:00.002-07:00

More Americans than ever before are investing in the stock market. It's estimated that over half of American households own stock, which is in stark contrast to even a few decades ago, when the stocks were primarily traded by institutional investors and the wealthy. In the 1990s alone, the number of investors increased by over 50 percent.

Why the shift? According to a Congressional report, a number of factors caused more people to become investors, including the increasing popularity of mutual funds and the advent of the IRA and 401(k) retirement plans. Essentially, mutual funds present individuals with minimum risk stock market investing, while retirement plans enable households to accumulate wealth by placing their money in financial instruments that have a greater rate of return than traditional savings accounts. That same Congressional report asserts that, "The first lesson to be taken from the broadening of stock ownership is that Americans want access, control, and choice over their retirement and other saving options."

Access, control, and choice are all wonderful, but many individual investors still don't understand how to get a maximum return for a minimum risk or no risk at all. After all, reckless investment does not a fortune make.

The Securities and Exchange Commission (SEC) compares investment risk and return by noting that savings accounts, insured money market accounts, and certificates of deposit are federally insured and, therefore, safe. "But there's a tradeoff for security and ready availability," they say. "Your money earns a low interest rate compared with investments." The SEC also notes, "Over the past 60 years, the investment that has provided the highest average rate of return has been stocks," but stresses diversification. According to the SEC, "If you buy a mixture of different types of stocks, bonds, or mutual funds, your savings will not be wiped out if one of your investments fails." All well and good, but the fundamental question remains: how does the average individual who wants to invest in the stock market engage in profitable trading? The answer lies in techniques often used by institutional investors but that is almost unknown and certainly underutilized by private investors.

The two techniques can be characterized as a minimum-risk strategy that can be used in any market with any broker, and a no-risk strategy that is limited to certain stocks and brokers. When you use these techniques, which are outlined in reports available online, some of your profits will be modest, while others will be significant.

It's important to note that the reports that outline these techniques aren't those that promise "get rich quick" schemes, or that tout trading in the Forex (foreign currency exchange) or options markets. These markets are volatile, risky, and not for the inexperienced or the faint of heart. Rather, these strategies employ techniques that can generate a 50 percent annual return or more, but that center around minimum risk stock market investing. The bottom line is that most people seek a maximum return on their investments with a minimum risk or no risk at all. By utilizing techniques employed by institutional investors, individuals can achieve their financial goals.

Stock Market Trading Strategies - Step Two of the Wyckoff Method

2008-08-10T04:33:00.001-07:00

Step two of the Wyckoff method is very simple, but yet so very important in achieving consistent success in the market.

Wyckoff teaches us to always trade stocks that are in harmony with the market. The trend of the market as indicated by the Wyckoff Wave indicates the line of least resistance. It reflects the direction in which most of the individual issues are moving. Traders who take positions that are in harmony with the line of least resistance are more likely to experience positive results than are traders who try to fight the trend. It is always better to have the market working for you than against you. There are always individual issues that make huge moves against the trend, but these are relatively rare.

The odds of finding one of these counter trend wonders are much smaller than are the odds of selecting an issue that is going to perform as well or better than the trend of the market.

Trading in harmony with the market means taking long positions when the market as measured by the Wyckoff Wave is in a defined up trend channel.

To avoid these errors make a commitment to never be long and short at the same time.

Stock Market Terminology - Stock Options Glossary

2008-08-10T04:32:00.000-07:00

Stock Market terminology can be daunting especially for the beginner, and Stock Options can be even harder to understand. I have put together a glossary of common terms relating to options trading that may help the novice trader.

Rather than list them in traditional alphabetical order, I have listed each in order of importance for a basic understanding of stock options trading.

Some very basic terms you may have heard before:

Bearish a view someone has where they are expecting the stock market, or a stock price to fall.

Bullish a view someone has where they are expecting the stock market, or a stock price to rise.

Neutral is a view someone has where they are neither bearish or bullish. There are options trading strategies suited to this, requiring little or no movement.

Stock Options give the holder the right to buy or sell particular shares at a fixed pre-determined price within a fixed period of time. Stock options can be traded in the same way that the underlying stock can be bought and sold.

Underlying Security is the stock that an option taker has the right to buy or sell if they choose to exercise.

Some terms that relate to the mechanics of stock options:

Call Options give the holder the right to buy the underlying stock at a fixed pre-determined price within a certain, fixed period of time.

Put Options give the holder the right to sell the underlying stock at a fixed pre-determined price within a certain, fixed period of time.

Strike price This is the fixed, pre determined price at which you can buy or sell the shares. This cannot be changed throughout the life of the option contract.

Expiry This is the date at which the option contract expires. This cannot be changed throughout the life of the option, and there after the contract is worthless.

Exercise The process of fulfilling the put option contract and buying or selling the shares. This can be done any time up to and including the option expiry date.

Premium The amount you pay for the option contract. Each stock has set strike prices for trading. Depending on where the strike price is in relation to the current share price, influences the amount you pay. Premium is the sum of both the options intrinsic value and time value.

Contract Size The amount of underlying stock covered by an option contract. In the U.S this is 100 shares, and Australia it is 1,000 shares. This can vary at times. A broker is able to confirm this for you.

Writer is a trader or investor who sells an option.

Taker is a trader or investor who buys an option contract.

Some terms that relate to the pricing and values of stock options:

At the Money when an options strike price is the same as the current stock price, it is said to be at the money.

In the Money A call option is in-the-money when the underlying stock price is higher than the strike price of the call, and a put option is in-the-money when the stock price is below the strike price. The option would have intrinsic value.

Out of the Money A call option is out-of-the-money when the stock price is below the strike price, and a put option is out-of-the-money when the stock price is higher than the strike price. The option would have no intrinsic value.

Intrinsic Value is the difference between the current stock price and the strike price. This is the amount by which an option is in the money, and indicates the value of an option if it were to expire right now.

Time Value is the difference between an options current value and the intrinsic value.

Time Decay Options are made up of time value and intrinsic value. As you get closer to the expiry date, the option value diminishes. This is called time decay. When you buy an option, you are buying time.

Fair Value is used to describe the value of an option as calculated by a mathematical model. Also used to indicate intrinsic value.

Theoretical Value The price of an option as calculated by a mathematical model.

Overvalued describes a stock trading at a higher price than it logically should.

Undervalued describes a stock that is trading at a lower price than it logically should.

Some terms you will hear when dealing with a stock broker:

Full Service Broker is a broker you deal directly with to execute all transactions and orders. They come with higher fees, but highly recommended when you begin trading.

Online Broker many broking firms offer an online trading platform that allows you to control your orders with the click of a mouse. The fees are usually a fraction of the full service brokers.

Discount Broker is a brokerage firm that offers low commission rates.

Ask Price is the price at which an option seller (writer) is willing to sell. We buy option contracts and stocks on their ask price.

Bid Price is the price at which an option buyer (taker) is willing to buy.

Bid/Ask Spread is the difference in price between the bid and ask price of an option contract. Option contracts that are highly traded (liquid) tend to have a tighter Bid/Ask Spread and option contracts that are thinly traded (less liquid) have a wider Bid/Ask Spread.

Buy to Open is an order in option trading to open a position through buying that option contract. You are said to be long that option.

Sell To Close is an order close an open position through selling that option contract. This really means you are selling an option contract that you own.

Sell To Open is an order to open a position by selling (writing) an option contract to a buyer. You are said to have short sold that option.

Buy To Close is an order to close your position. It simply means you are buying back an option contract that you have previously sold short.

Closing Order is an order placed to close an open position, whether it be a sell to close or a buy to close order.

Market Order is an order to buy or sell options at the current market price.

Limit Order an order to buy or sell options at a certain, or limited price.

Day Order an order that expires at the end of the trading day if it is not filled.

Good Until Canceled is an order that remains effective until it is cancelled or filled.

Leg in option trading strategies that involve many kinds of options, each type is known as a leg.

Long to be long is to own something.

Short to be short means to sell (or write) an options contract to a buyer. This means you have the obligation to fulfill the exercise of the option should the buyer decides to do so.

Naked Option or Uncovered Option is where the investor who wrote, or sold the option does not own the underlying security.

Position used to describe the number and strategy currently open. i.e if you had bought 12 Nov $ 20 call option contracts you would be long 12 XYZ Nov $ 20 calls.

Early Exercise is the exercise of an option contract before its expiry date.

Day trading is the process of making multiple trades that are opened and closed all within the same trading day.

Short Term Options Trading to buy and onsell stock options for profit within a period of time no more than 4 weeks in total.

Some things that may affect our decisions when to enter or exit a position:

Technical Analysis is the study of price movements on a companies stock chart in order to form an opinion of future possible price movements.

Fundamental Analysis is the study of a companies financial details to form an opinion as to the future share price movements.

Trend the direction of a stock or index price movement.

Support is a term in technical analysis indicating a price level, or floor, lower than the current price of the stock, where demand is thought to exist. This indicates that the stock may stop declining when it reaches this level.

Resistance is a term used in technical analysis to recognise a price level, or ceiling, that is higher than the current stock price and where the stock has previously traded and failed to break through.

Liquidity is the ease at which a purchase or sale can be made. Highly traded stocks have better liquidity.

Reward / Risk Ratio is a measure of how risky a position would be. Divide the maximum profit potential against the maximum loss potential, and a ratio of above 1 means that the potential reward is higher than the potential loss.

Return on Investment is the percentage of profit that you may or may not make on an investment.

Open Interest is the total number of outstanding open contracts in a particular option series. Opening transactions increase the open interest, while a closing transaction reduces it.

Volatile a stock market or stock price that moves up or down unexpectedly or drastically is known as volatile.

Volatility is a measure of the amount by which an underlying stock is expected to vary or fluctuate in a given period of time.

Volume refers to the number of transactions that took place in a trading day. This indicates the number of buyers and sellers in the market.

Stop Loss is a pre-determined price at which you have decided to exit a position once it is hit.

Stop Order is a traditional stop loss where your broker will close a position when a predetermined price is hit.

And afterwards

Realise once you have closed an open position you will realise a profit or loss.

Powerful tools to help increase your profits, but take caution:

Leverage is the power to achieve greater profit potential with a smaller amount of money. Options offer high leverage. Beware leverage can be powerful, but your potential losses could also be greater.

Margin Loan is to buy a stock through borrowing funds from a brokerage house. The stock itself is used as security, and each stock has a maximum loan ratio.

Margin Call is when the lender requests additional funds as security from the borrower in the event that the stock price has fallen below a certain amount.

And a few strays:

American Style Option is an option contract that may be exercised at any time up until and including the expiry date. Most exchange-traded options are American-style.

European Style Option is an option that may only be exercised at expiry and not before.

Derivatives are financial instrument whose value is derived in part from the value and characteristics of another financial instrument. Stock Options are derivatives of the stock they correlate to.

Index is a compilation of the prices of several common entities into a single number, such as the S&P 500 and the Dow Jones.

Index Option is an option whose underlying security is an index. Generally index options are cash-based.

Market Maker is a member of the exchange whose purpose is to aid in the making of a market, by making bids and offers when there are no public buy or sell orders.

Greeks are a set of mathematical criteria used to calculate stock option prices.

Hedge to protect against potential losses.

Sensex - Stock Market Simulation

2008-08-10T04:31:00.001-07:00

NASDAQ, Dow Jones, BSE & NSE; Do they ring any bell? They surely must have. Not every one knows what the color of money is, but what people do know is they want to feel more money and see more money.

Another well known fact is that the ever increasing number of the average human being would never want to jeopardize his money, which for him, is the sole means of existence. In the end, it is the human craving for more that makes him succumb to his urge and makes him take a plunge.

The only thing that makes the average investor lose out, is his inexperience. The Raging Bull lures many new people into its arena, but little do they realize what's in store for them. The market trends are tough to gauge. No one can ever be sure how high or low will stocks leap! Everything on earth has a risk involved, so does this market. We can't live with it but we can work around it.

Imagine a scenario where you as an amateur investor decide to take a dip. Based on a few tips from a few places, you make your pick. The possibility is that you might hit the nail, or may be you might get nailed. Every player who is a benchmark, be it a game, trade, business (depends on whatever you cal it) has had some level of practice and has learnt things the hard way. People have lost a lot of hope, money and many other things trying to figure out the market. They had to do it the hard way because they didn't have a place to hone their skills. A place where they could learn tricks of the trade, where they could make an investment without the fear of losing anything and at the same time, learn a lot more than the others.

But the question still remains! Would there be such a place. Is it one of those wonderland parties that people always think about and never find? Well!! Not this time. This time round all you investors are in for a good time. It fills me with pride to present to you the game of your lifetime. The SenSex Simulation!! This game is an assortment of all that I have gathered over the years.

The Game is a complete replication of the stock markets with live feeds for the values of stocks. Registered members get to play around with money in their account, using which they can purchase and sell off stocks. The game would also give you your daily stats. These would include your portfolio, the value of your stocks, and whether you have gained or lost out, relative to the market. The SenSex Simulation provides you with a platform to stand out of the ring and get a look and feel of the rumble.

“By the time you know the rules, you're too old to play the game!” It's never too late to start learning. Life is a vicious circle. Someone, who does not stop learning, never stops growing.

It's Time to tame the BULL!!

Sense And Sensex

2008-08-10T04:30:00.001-07:00

Sensex is the name coined for the Bombay stock exchange sensitive index. Sensitive index abbreviated as Sensex, is the yardstick index for stock markets in India. The sensex is designed scientifically based on a particular universally accepted methodology. It was first put together in the year 1986 and with 30 ingredient stocks. These 30 stocks symbolized gigantic and rich organisations. 1978-1979 was taken as the base year and the base value was taken as 100. The same method continues till date. It is in face, very popular globally.

Whenever we express the state of the market, we look for the sensex reading. It is the most comprehensive indicator of the market. The Sensex echoes the price movements of various stocks and also indicates market soundness. Sensex rises and falls in a market. In case the sensex rises the investors or traders in the market can look forward to booking profits. While a sensex on the downside may lead to a loss for investors. Therefore if the corporations listed on the stock market are financially and managerially sound.

Sensex- Ingredient companies.

The sensex in India is made up of 30 companies which have a direct bearing on the economy. These 30 companies are selected by a group of academicians, fund managers, financial journalists and many other stock market participants. They form the index committee.

Parameters for selection of the 30 companies.
-The stock of a company must be traded all through out the financial year to be amongst the 30.
-The particular stock must be amongst 10 top companies whose stocks have been traded every day in the financial year on the BSE.
-On the Bombay stock exchange listings the particular stock must have its listing since a year.
- The company must have a good and sound record in the eyes of the committee.

SENSEX calculation strategy and method.

"Free-float Market Capitalization" method is used to calculate the sensitive index. According to this method, the sensex valuation mirrors the free float market value of the 30 stock ingredients relative to the (1978-79) base year. When we multiply the number of shares the company has issued by the price value of the stock of the same company we arrive at the Market Capitalization of the particular company. Later on we multiply it further with free float factor to come up with free-float market capitalization. The Free float market capitalization of the 30 key corporations is further divided by the Index Divisor, a number. The index number is the sole link to the first and base price of the sensitive index.

The sensex journey

The sensex has been on the increase ever since early history. From 1000 points on July 25thg, 1990 to historic 10000 mark on February 7 th, 2006 after which it rose to 14000+ on December 5th 2006.However it has been fluctuating between 13000 to 14000 since then. But there have been several downfalls due to high volatility. In such cases the government adapts policies that are friendly to investors and curbs down panic.

Learning How to Make the Best Stock Pick

2008-08-02T21:22:00.001-07:00

When it comes to the theory, online stock trading and making the best stock pick is easy to learn. Even beginners with no background in finance can do it. Learning how to trade online is easier nowadays, because of the many sites that offer trading services and applications that enable beginners like you to know how to trade stocks. Online stock firms are your best bets for learn the tools for making the best stock pick on the lot.

Online Brokerage Firm - Start by surfing for an online brokerage firm that offers start-up accounts that are easy to use and understand. There are many sites that offer turnkey applications and solutions for beginners like you to learn quickly about making the best stock pick. So choose one that you're most comfortable with when you sign up. Many sites will also show the steps and ways for you to manage your stock and keep track of your stock investments. That way, not only are you learning something new, you'll be able to guarantee your investments yourself, and make the bst stock pick you want.

These sites also offer online stock services to aid stock trading neophytes who want to make the best stock pick. Many online brokerage sites offer real-time stock quotes so you can stay informed of the current trends and shifts in the stock market. Other financial and market online news sites may also offer information about the stock market, and specifics stocks and options you may be looking to buy.

Getting Information - To be on the safe side, try searching for sites that offer the best ways for you to get firsthand information from the market. When making stock decisions and determining the best stock pick, key information about the trading is your edge to buying or selling stock. Asides from online stock trading sites, there are also sites that keep track of the various stock markets all over the world and provide information about the best stock pick, new stocks, and other developments, to professional stock traders, brokerage firms and non-professionals like yourself.

Stock pick developments, stock quote data, are just some of the information these sites can provide you with. These information may be delivered in delayed or real-time or real-time formats. Getting real-time stock information is a requirement if you're interested in making the best stock pick. On the other hand, delayed stock quotes (that can be "delayed" from ten minutes to twenty-four hours) like after hours stock quote reports are often used for stock analysis and market projections.

These reports also include information on stock performance, as well as trading speculations and other news that may influence the value of your stock during the next trading day, week, or even month. You can also use these information in developing your own stock trading strategy, while earning the experience to make the best stock pick.

Why It's Different - However, trading stocks online is not as instantaneous as it is on the floor. The lag time from the moment you make the best stock pick of your choice and elicit a buy offer for it, till that offered is closed, twelve or even twenty-four hours, may have elapsed. Thus, if the stock you're interested moves rapidly, your best stock pick could be the worst on the floor. This is because, the Internet cannot duplicate the market hours.

Be sure to keep a pulse on what's happening to your stock trading and investments so you can make the necessary adjustments. Keeping updated with the latest stock information is the best lesson to learn about online stock trading and making the best stock pick.

10 Tips for New Penny Stock Investors

2008-08-02T21:19:00.000-07:00

Many people who have never played the stock market game before start with penny stocks. Heck, even if you've been around investing for decades, penny stocks are still your ticket to triple, quadruple or even quintuple-digit gains. You just can't see those if you bet on the Dow.

The problem is penny stocks are a bit more difficult to research than their large blue chip cousins. To make this a bit simpler for first-time investors, here are 10 things to keep in mind when looking for solid penny stock plays:

1. Think Outside the Box

When it comes to penny stocks, some of the wackiest ideas have translated into serious gains for investors who were willing to think outside the box…

Back in the day, who would've thought that computers were the "wave of the future"? Early investors in companies like Microsoft and Yahoo, that's who! They made a bundle by thinking outside the box and betting on business models and technologies that were out of the ordinary.

There are new technologies and business models out there in the penny stock world today. Are you willing to think outside the box on your next penny investment?

2. Know What You Own

In the world of Wall Street, whether you're investing in penny stocks or blue chips, one of the biggest rules is to "know what you own." What does that mean?

You should know the company you're investing in inside and out. Know its business. Know how it makes money. Know its management.

But as important as this rule is for any investor, it's doubly important for investors in penny stocks! That's because with penny stocks, share prices can change quickly if you don't keep a handle on them.

So know what you own and your investments won't end up owning you.

3. Don't Get in Over Your Head

When you see a hot penny stock that's ready to take off, it can be hard to keep from cashing out your 401(k) to buy as many shares as you can…getting in over your head with penny stocks is an almost sure way to get burned.

Even though penny stocks can make you some serious money, they're volatile - and that means you shouldn't put more than 10% of your portfolio on the line.

What's the smart penny investor to do? Set up an account for just penny stocks and load it only with money you're prepared to lose.

4. Don't Be Afraid to Ask…

One of the beauties of penny stocks is the fact that they're smaller companies that are out there for smaller investors.

As an individual investor, a big multinational might not give you the time of day. That's usually not the case with penny stocks. In fact, it's not unheard-of for individual investors to pick up the phone and chat with a company's CEO or CFO on the spot.

If you've got a burning question about a penny stock prospect, e-mailing or calling the company's investment relations firm or corporate offices might be one of the most telling ways to figure out if that stock's for you.

5. Be a Skeptic

Remember when we said to think outside the box? Well, do that, but don't forget to be a skeptic…

Just because a company has an interesting new idea doesn't necessarily mean it's a good penny stock prospect for your portfolio. The key is…Do you think that it can monetize its idea?

If that answer isn't immediately clear, it's time to dig a little deeper into that company's prospects. Thinking outside the box is a great way to get innovative companies on your radar, but being a skeptic is the only way to make sure that translates into gains for your portfolio.

6. Think, Then Buy

When you're ready to buy shares of a penny stock, make sure you take a second to think about what you're doing. All too many first-time penny investors take the jump on just a few shares of a penny stock without realizing how much the size of their investment will affect their returns.

Think about it this way…You're an investor who sees an attractive stock for $1 per share. You don't have a large portfolio yet, and you don't want to take too much of a risk, so you buy just 50 shares for $50.

Turns out you picked a winner that made 40% in just a week - $20 of pure profit. You sell and rejoice in your penny stock success. But wait…is that celebration justified?

You're forgetting about those $10 execution fees you paid to buy and sell that stock. That's $20 altogether. Looks like you only broke even, despite the fact that you had a stellar stock.

When you're buying penny stocks, make sure you're buying a large enough quantity that account costs (like execution fees) don't eat up your profits. You can find out your minimum returns to break even with this:

Execution Fees/Stock Acquisition Price x 100 = Break-even Gain (Percent) Needed

7. Don't Get Greedy

Lots of penny stock investors see 200%, 500%, even 1,000% gains on a stock but still end up losing money in the end. It's not because they didn't plan their buys properly…it's because they got greedy!

It doesn't matter how much money a stock makes if you're not ready to press the button and realize those gains. That's why you need to set solid exit points for any penny stock you buy.

It's human nature to want to hold onto an investment as you see it climb with no end in sight, but doing that is a great way to miss out if that trend turns around. When you analyze an investment, think about a logical exit price and sell for that. Picking solid exit points will become easier as you develop your investing chops.

8. Don't Get Too Nervous

The flip side of getting greedy is getting nervous with stocks that are seeing major gains in short periods of time. Relax. As a penny stock investor, you've got to be ice-cold when you see one of your picks take off.

Again, it comes down to picking good exit points for your investments. If you're sure that your stock is bound to start losing ground before you hit that target price, maybe it's time to re-evaluate what that price should be.

Remember, you can reanalyze your targets anytime, but you should never make trades on emotion alone.

9. Be Realistic

While investors might hope for tripe-digit gains on every pick they make, even the most seasoned pros of the investing world make bad picks from time to time. That's why having realistic expectations is so critical.

As with picking the right target prices, knowing what kind of gains to expect comes with experience as a penny investor. It's tricky to know when you should expect 20% from a stock and when you should expect 200%.

But setting those realistic expectations now, from the get-go, will get you into a habit that will help you structure your portfolio in a way that will get you the most bang for your investment buck.

10. Be Ready for the Next One

It's easy to sit back and relax after you've just made a trade - especially if you banked a nice gain. But not so fast!

As much as you might want to bask in your investing success, fight that urge.

The secret to the penny stock game is to always be on the move. Always be on the lookout for that next penny powerhouse - the next one might just be your best yet.

Cheers,

Stock Market Astrology

2008-08-02T21:16:00.001-07:00

We have seen that the primary trend is always interrupted by secondary trends and a bust can happen in a primary booming market. Most deceptive is the secondary reaction ! Investors shiver when such a secondary reaction happens. Many panic and sell off their entire holdings. It is difficult to identify this secondary trend because one does not know whether it is the beginning of a primary bear market or a secondary reaction. Intuition alone can identify secondary trends. The foremost amongst the intuitive sciences, Astrology, here comes to our rescue.

The investor population in India did panic when the Sensex slid from 20400 to 18000. Normally a secondary reaction lasts from 3 weeks to 3 months. The market recovered only after 3 weeks. Many panicked and thought that this signalled a bear phase. It was disproved only after 3 weeks when the market surpassed 20000 !

We have declared that Intuition alone can determine trends. Amongst the Scientia Intuitiva, the foremost science Astrology can definitely determine primary, secondary and tertiary trends. That Jupiter's transit of the second can fuel an economic boom was known to the sages. " Nana Dukham Vitha Samriddhi " - thus runs an aphorism, meaning that Jupiter's transit of the second can trigger a stock market boom, if the stock market can indeed be taken as a barometer of the economy !

We will define secondary reactions which are a bull decline in a Bull Phase and a bear rally in a Bear Phase.

Secondary Reactions

Nelson remarks that " A secondary reaction is considered to be an important decline in a bull market or advance in a bear market usually lasting from 3 weeks to 3 months during which intervals the price movement generally retraces from 33 percent to 66 percent of the primary Price change since the termination of the last preceding secondary reaction. The reactions are frequently erroneously assumed to represent a change of primary trend, because obviously the first stage of the bull market must always coincide with a movement which might have proved to have been nearly a secondary reaction in a bear market, the contrary being proved after the peak has been attained in a bull market. " ( The ABC of Stock Speculation ).

While theoretically it is easy to talk about primary trends and secondary reactions, practically it is difficult for an invester who has invested all his savings in an unpredictable market. The investor's normal reaction to a decline is to panic. Suppose you buy Reliance for 2800. After 2 days Reliance becomes 2780 ! What will you do ? You panic thinking that a bear phase has started and will sell the scrip at a loss. Then later, say after 3 weeks Reliance starts its climb and becomes 3000 ! So the investor needs guidance from technical and fundamental experts. But can Fundamental Analysis and Technical Analysis guide him ? If FA and TA could guide millions, we wont have so many losers ! This indicates the scope for another analyst - The Stock Market Astrology expert - who alone can determine trends based on the intuitive sciences !

Now a secondary reaction is taking place and the Sensex had slid down to 4700 levels. 4930 meant an overbought situtation and a correction had to occur. You can either hold on to your portfolio ( as this is merely a secondary reaction in a primary upward market ) or sell off and enter when the Sensex is 300/400 points down. There is no need to panic as this reaction is secondary and not primary.

Even though we are confronted with a Bull Market now, we will deal with a Bear Market which will come after some time as the Market is cyclical.

The Primary Bear Market

According to Nelson " A primary bear market is a long downward movement interrupted by important rallies. It is caused by various economic ills and does not terminate until the stock prices have thoroughly discounted the worst that is apt to occur. " ( The ABC of Stock Speculation ).

When we take a graph and when we find falling resistance ( high ) and support ( low ) levels, we can deduce the primary trend as a Bear Phase. When we see secondary rallies known as bear rallies, we can identify the secondary trend as rallies in the primary bear market .Tertiary trends are unimportant.

Nelson categorically states that " a primary downward market is characterised by a) extinguishment of all hopes upon which the stocks were purchased at inflated prices b) selling due to decreased business and earnings c) distress selling of sound securities, ragardless of their value, by those who must find a cash market for at least a portion of their assets."

When the Sensex slid from 6151 in 2001 to 2900 at the beginning of 2003, it signalled a Bear Phase. There were many rallies but they were all secondary rallies in a primary falling market. Stock markets are cyclical and he who knows about the cyclical nature of the stock market grieves no more !

Tertiary Trends - Daily Fluctuations

Nelson averrs that " the third and usually unimportant, movement is the daily fluctuation. Nevertheless, the day to day pattern must be studied because they nearly always develop into a pattern easily recognised and having a forecasting value." ( The ABC of Stock Speculation )

Relation of Volume to Price Movements

Says Nelson " the market, which is in an overbought state, becomes dull on rallies and develops activity ( read as volume ) on declines. Conversely, when the market is in an oversold condition, the tendency is to become dull on declines and active on rallies. Bull markets terminate in a period of excessive activity and begin with comparitively light transactions. " ( The ABC of Stock Speculation )

Manipulation

"Manipulation is possible in the daily movements and secondary reactions are subject to such an influence to a more limited degree, but the primary trend can never be manipulated". ( The ABC of Stock Speculation ).

The primary trend is caused by a variety of economic factors and is not manipulated although there were some manipulations in the tertiary and secondary movements.

There can be corrections. We have to understand that they are mere secondary corrections in a primary bull market. Patience alone can win the game for us ! He who exhibits one man's intelligence and six men's patience alone can win !