Posts Tagged ‘Stock Market’
Thursday, March 11th, 2010
Bulls and bears are always fighting for the control of the market. Candlestick charts are the best way to know who is controlling the market. With one glance on the candlestick chart, you can find out whether the bulls were in control or the bears. There are many candlestick patterns. The most basic and the most powerful candlestick pattern is the the long white candle. When this candle is formed, it means that bulls have been controlling the market throughout the day pushing the currency prices or the security prices higher throughout the trading day. This is one of the most bullish candlestick pattern to form on the chart!
As prices rise through the day, sellers do come in but not enough to stop the prices from continuing to rise. When sellers do show up during the trading day, buyers buy from them and the prices move higher.
This is an indication that the buyers are not done with their buying. The following day the bulls will still be in control and pushing the prices further higher. This is an indication of the fact that there are not enough stocks or securities in the market to satisfy the buying appetite of the investors. With high demand and low supply, the prices will continue to rise! Now, what this means is that prices have been constantly rising throughout the trading day. The closing price was equal to the high of the day or very near the high of the day.
Now, a true White Marubozu is a special variation of the long white candle with the closing price equal to the high of the day and the opening price equal to the low of the day. However, a White Marubozu may not be formed quite frequently on the chart. Most of the time, you are going to find the white long candle with a wick on either side of the candle body. These wicks will be small offcourse. What this indicates is that the closing price was close to the high of the day but not equal to it. In the same way, the opening price was close or near to the low of the day but not equal to it!
To figure out that you are indeed looking at a long white candle, determine the area covered by the body of the candle that is between the open and close. This area should be at least 90% of the distance between the high and low. If so, you have a long white candle.
On a long white candle day, a lot of price action is covered by a very short amount of time. Price action doesn’t move in one direction for that matter without retracing some part of it. This normal retracing of the price action gives you a chance to act on the signal provided by the bullish long white candle.
With long white candlesticks, the low price on the candlestick is a good support level. Support is the level where the buyers are expected to support the price of the stock or for that matter the security.
There are some variations to the bullish long white candle. Three are very important. The first is the Long White Marubozu that has no wick. It is all candlebody. This is the most bullish of the candlestick patterns. The second important variation is the Opening White Marubozu. In this case, the open price is equal to the low of the day. What this means is that the there is no wick below the candle body. The other variation is the Closing White Marubozu. In this case, the closing price is equal to the high of the day. What this means is that there is no wick on the top of the candlebody.
Mr. Ahmad Hassam has done Masters from Harvard University. Master these Candlestick Patterns with this 82 page PDF FREE Candlestick Guide! Get this 49 page Quantum Swing Trading Report plus the powerful FOREX-4 PACK Training Kit and the Profit Button Report FREE just now!
Tags: business, day trading, Etfs, finance, forex, investing, Money, mutual funds, Retirement, Stock Market, stocks, trading
Posted in Retirement | No Comments »
Wednesday, March 10th, 2010
Candlestick Charting is one of the most powerful tools in the trading arsenal of any trader. Candlestick Charts apply to any market no matter what you trade-stocks, forex, futures, options, ETFs, commodities, bonds and others. With one simple glance on the chart, you can figure out the sentiment of the buyers and sellers in the market. There are many candlestick patterns that are used as trading signals. Some are simple while others are complex. Doji Candlestick Pattern is a simple pattern that is very easy to spot. It has no body. It is formed when the opening and the closing prices are the same. So, this pattern is all wicks with no stick. It literally looks like a Cross on the chart. So you can easily spot it. But it is very rare as the security opening and closing prices are seldom equal! Doji has some variations. We will discuss these variations in this article!
In other words, the opening and the closing prices should be the same for a Doji to be formed. So for a Doji to be truly formed on a trading day, throughtout the trading day heavy buying or selling may take place but at the end of the day, the price should be where it had been at the start. In other words, the opening and the closing prices should be the same for a Doji to be formed.
When a Doji is formed with the opening and the closing prices equal, it is a signal that the battle between the bulls and the bears had been a draw during the trading day. Soon, either the bulls or the bears are going to previal. In other words, a trend reversal is about to take place.
Now, a Dragonfly Doji is a unique variation to the Doji Candlestick Pattern. It is formed when the opening, the closing and the high prices are all equal. Something quite rare and unique. So how is a Dragonfly Doji is formed? It is formed when the security price opens. It is traded down during the early part of the day. At some point in the trading day, the price action starts to recover and climb. It eventually closes at the high which happens to equal the open of the day. Something unique!
When a Dragonfly Doji is formed, bears initially decide to rule the market. But at some point the bulls step in and decide to buy again. When the bulls step in, they start pushing the price up. As the bulls dominate the trading day, the security price ends up right where it had started.
The low on this pattern can be taken as the support level because this was the level at which the bears entered the market and started buying. Dragonfly Doji is considered to be a bullish candlestick pattern.
When a Bearish Gravestone Doji Pattern is formed, it is a signal that a prolonged downtrend is about to start in the market. The second important variation to the Doji is the Bearish Gravestone Doji. This pattern is formed when the open and close of the day is equal to the low of the day. This is something opposite to the Dragonfly Doji where the open, the close and the high were equal.
A Doji pattern is very easy to spot on the candlestick chart as there is no body just the wick. Open close and either low or high all three are equal and the candle looks more like a cross. When you spot the Doji, get ready for a trend change in the price action.
Mr. Ahmad Hassam has done Masters from Harvard University. Master these Candlestick Patterns with this 82 page PDF FREE Candlestick Guide! Get this 49 page Quantum Swing Trading Report plus the shocking Profit Button Report that applies no matter what you trade-stocks, forex, futures or options FREE!
Tags: day trading, forex, home business, investing, Money, mutual funds, real estate, Retirement, Stock Market, stocks, trading, wealth building
Posted in Retirement | No Comments »
Monday, March 8th, 2010
Trend is your friend. But how do you know it is really your friend. Trend can only be your friend if you know that the trend is going to continue or it is about to reverse ahead. Otherwize, trend trading is going to give you a loss. Candlestick patterns can help you anticipate whether a trend is going to continue or reverse ahead. There are many candlestick patterns. Bullish Necklines is one of them. It is a two stick trend confirmation pattern that tells that the trend is expected to continue. There are two type of Neckline Patterns, the In Neck and the Out Neck. When you spot the Bullish Neckline in an uptrend, it is a signal that the trend is expected to continue for sometime.
On the first day, there will be a long bullish candle indicating that heavy buying took place during the day. On the second day or what you call the signal day, there will be a bearish candle that can be long or short with a closing price almost close to the first day. Necklines pattern is a two stick pattern. What this means is that it takes two days on the daily chart for this pattern to form.
If the closing price on the second day is very near the closing price on the first day, the neckline candlestick pattern formed is known as the on neck pattern. If the closing price on the setup day is a little lower than the closing price on the second day, it is known as in neck pattern.
You might be thinking that this is not much of a difference. Well, this is true but nevertheless, you should be aware of this slight difference between the In Neck and the On Neck Patterns. Both these patterns are telling the same thing that the uptrend is going to continue in the near future. So even if you are not able to differentiate between the In Neck and the On Neck, don’t worry much. You must at least be able to identify that a Neckline Pattern has been formed.
In case of the bearish meeting line candlestick pattern, you see a strong up day on the setup day with a long bullish candle. On the signal day, you find a gap opening which entices the sellers to step in the market. The selling continues throughout the day. As a result a long bearish candle is formed with the close of the day very near its low plus the close of the day very near to the close of the setup day. Now this a trend reversal pattern.
Another trend reversal pattern is the Bearish Piercing Ling Pattern. This candlestick pattern is formed when on the first or the setup day, a bullish long candle is formed meaning that the bulls have been in control of the market throughout the day. The second day or what you call the signal day, there will be a bearish candle formed. This means that on the second day or what you call the signal day, the sellers started selling pushing the price action down past the opening price to the midpoint of the first day candle. This bearish candle should have an opening higher than the first day’s high.
When this Bearish Piercing Line Candlestick Pattern is formed, it means that the price action has lost it’s momentum. This pattern usually occurs in the last stages of an uptrend and when it happens, it means that the trend is about to reverse itself.
Mr. Ahmad Hassam has done Masters from Harvard University. Get this 49 page Quantum Swing Trading Report FREE! Master these Candlestick Patterns with this 82 page PDF FREE Candlestick Guide!
Tags: business, day trading, Etfs, finance, financial planning, forex, Futures, investing, mutual funds, real estate, Retirement, Stock Market, stocks, trading
Posted in Retirement Communities | No Comments »
Saturday, March 6th, 2010
If you are a trader than you will be knowing how important news is for the markets. Breaking news can move the markets upside down in matter of few minutes. But breaking news cannot be predicted. You can only hope to avoid it when you are trading. However, there are certain economic reports that are released periodically that have the potential of moving the markets. There are traders popularly known as the news traders who trade these economic reports and make a lot of pips or ticks or points whatever!
Now when these economic reports are released, market compares the expected with the unexpected. The more these reports have the element of the unexpected, the more the markets become nervous. So, if you are a news trader or an economic report trader, you need to watch CNBC and Bloomberg constantly to know what the market is expecting. The most market moving reports are the Federal Reserve’s Beige Book, The Consumer and the Producer Price Index, The Gross Domestic Product (GDP). the monthly Employment Reports or what you call the NFP Report, the Institute for Supply Management (ISM). Now as said before if these reports have no surprise for the markets, nothing will happen. But in case if there is a surprise, markets can turn upside down in matter of minutes!
Now, you can know the date of release of these economic reports by looking at the Economic Calendar. By looking at the Economic Calendar, you can know these dates as it provides the listing of dates when these reports will be released. Each month, most of these reports are released by the different agencies that includes both public as well as private at fixed dates.
Now, you never know how markets are going to react to each one of these economic reports. Some are given more importance by the markets. But this preferrence also keeps on changing. Now, FOMC Meeting Minutes are considered to be very important as interest rate changes are decided in the FOMC Meeting. FOMC stands for the Federal Open Market Committee. The other important reports can be the CPI ( Consumer Price Index) and the PPI ( Producer Price Index).
The US Department of Labor’s Non Farm Payroll (NFP) Employment Report is considered to be a major market moving report. It is released on the first Friday of each month at 8:30 AM EST. You should try to avoid trading at this time. However, there are many currency traders who now specialize in trading the NFP Report.
The release of employment figures is usually followed by frenzied trading that can last from a few minutes to the entire day depending on what the data shows and what the market was expecting.
NFP Report has become important in the last few years keeping in view the slow economic growth. Now, as the economy shifts gear from slow growth to high growth the state of employment figures can become highly important for the economy. This report is used by the traders, investors and Wall Street Analyst to anticipate any interest rate changes in the economy. In the end, it is the interest rates that stand at the center of the financial universe!
Mr. Ahmad Hassam has done Masters from Harvard University. Get this 1 Minute Forex Trading System that makes money instantly FREE. Download this 70+ page Forex-4 Pack Forex Swing Trading Training Kit FREE.
Tags: business, day trading, finance, forex, home business, investing, Money, real estate, Retirement, small business, Stock Market, stocks, trading, wealth building
Posted in Retirement Communities | No Comments »
Saturday, March 6th, 2010
Recently, I had an important chat with a stock-option manager who is still seeking for the mysterious formula to yielding dependable returns with option investing each month. He mentioned some things which were so obvious to me and brought up many past memories.
The thing in particular that really stood out to me was when he alleged “Non-directional option investing doesn’t mean we will produce a return on investment in every direction. It really means that we produce a return if the asset doesn’t move in any direction. Another way to look at it, it’s really a directional strategy, sideways.” This is very true, and most schools say that it’s easy to manufacture returns with options simply because we can produce money for every direction the market goes. This is true in some points of view and false in others.
Those of you trading Iron Condors know what I am talking about; especially if you are trading the Condors that most courses and books teach. If you are trading this strategy in 2009, you probably aren’t making anything. The reason being that the Iron Condor is just as directional as most option trades only that its direction is sideways. For some, it’s just as hard to predict a sideways move as it is up or down.
I have had many calls over the years from people losing huge chunks of their accounts trading credit spreads and condors. They all say the same thing… “I was doing great for several months, and then all the sudden I lost nearly my whole account in one day.” I have heard this story over and over again.
This is precisely why I don’t preach the normal style of Iron Condors. If you are a couple days from expiration, and the RUT is right up against the sold contract, subsequently you are investing in the same manner as the average investor does. I’m speaking of the one who has very little investor education, and because of this, shortly you’ll be telling your buddies a similar story. However, it’s a very different story that you’ll be telling your wife! You smile today at this, but you won’t be showing your pearly whites during a time when it happens in your own trading. Another serious problem with this aggressive style of investing is that the anxiety level can be so elevated that it really destroys your well-being on a daily basis. Many of you reading this know what I am talking about.
Well, San Jose Options Mentoring has really changed the Condor and Credit Spreads that the usual investor is attempting to trade today. While others come into expiration sweating it out, worrying about the market moving past their short strike, we are relaxed, sleeping at night, and trading options in a much safer environment.
Besides teaching a safer way to trade Condors, we’ve also developed techniques to lock-in our profits on them. Most option traders exit their trades when they make a profit, but we can lock-in our profits and stay in the trade.
Also, when we do have a trade go against us, well, we have ways to get a free trade from it. This is another important technique that we teach to our students. While many traders exit with a loss or never exit and sustain a huge loss, we exit and get a free bonus trade that can always lead to returns at a later date.
So there you have it! Whether it’s a winning trade or a loser, we have really developed some nice trading tactics that can improve your personal trading immensely.
Ready to lock in those profits? Better your Option Trading Skills today by visiting San Jose Options Mentoring online at www.sjoptions.com. Visit today and get a Free Video on Option Greeks, a $200 value absolutely free! Get a totally unique version of this article from our article submission service
Tags: business, education, finance, investing, iron condor, locking in profits, Money Management, Option Trading, Retirement, risk management, Stock Market, Trading Stocks
Posted in Retirement Communities | No Comments »
Wednesday, March 3rd, 2010
Have you ever given a gold ring to your friend as a token of your true love? Gold has been the most precious metal from the dawn of civilization. It is still considered to be the ultimate currency and the ultimate store of value in times of political uncertainity. For the last ten years, the gold market is in a secular uptrend with the spot prices having recently breached the historical barrier of $1,200 per troy ounce. After that there was a retracement and the prices did come down to around $1,100 per ounce but this uptrend is expected to continue for sometime.
Forex trading is the hottest market right now after the recent stock market crash. Many small investors lost their lifetime saving in the stock market crash of 2008. Investors have turned towards forex in droves. Forex trading is considered to be a recession proof business as there is neither a bull market nor a bear market in currencies. Currency prices are always quoted relative to one anther and currencies are traded in pairs. What this means is that if one currency goes up the other goes down. It is being said that many millionaires will be made in the currency markets.
When you trade a currency pair, you go long on one currency and short on the other. In other words, you simply buy one and sell the other. Many people don’t know this that you can trade gold on forex too. Many forex broker platforms that you use to trade forex, allow trading of gold and silver against the US Dollar (USD) from the same platform. Both these precious metals have high demand in the industrial sector and as the global economy recovers from the recession, the prices of gold and silver are expected to skyrockets as industrial production picks up and consumers start buying again.
But when you trade gold, you take long or short position in gold in the spot market with the opposite position in US Dollar (USD). In other words just like trading a currency pair like EURUSD, JPYUSD, GBPUSD and other pair involving USD as the counter currency when you trade gold, you are trading against USD.
Now, suppoe the price quote in the spot market is 1100 XAUUSD. What this means is that one troy ounce of gold in the spot market right now is equal to $1,100 USD. So, in spot gold trading on forex, you are trading one troy ounce of gold against USD. Interestingly the symbol for this is also XAUUSD with XAU representing one ounce of gold.
Just like any currency pairs, stock or for that matter any security, the price quote in the spot gold market has got a bid-ask spread. Suppose the price quote in the spot market is 1110/1115. This means is that you can buy one ounce of gold at a rate of $1,115 and sell one ounce at the rate of $1,110 to your broker. Now, spot gold trading on forex is a fast moving market. Due to the fast moving nature of the spot gold market, the spread keeps on changing throughout the day!
Now a standard lot in currency trading is equal to $100,000. But in case of gold on forex, a standard lot is equal to 10 troy ounces of gold. So, if you find the price quote to be 1112/1117 and you are interested in going long. In that case you will have to buy 1 lot of gold that is equal to $11,170. Spot gold market is a fast moving market and the price quotes keep on changing. So, suppose just after 60 minutes, you find the quote to be 1120/1126. You see a profit and decide to get out selling at $11,200 making a profit of $30. Now if you had used leverage, you would have needed a much lower initial investment to make a profit of $30 in just 60 minutes.
Gold is also know as anti dollar. What this means is that their is an inverse correlation between gold and USD. This inverse relationship can help you hedge your positions in other currency pairs.
Mr. Ahmad Hassam has done Masters from Harvard University. Download this 1 Minute Forex Trading System FREE. Get this Forex Swing Trading Forex-4 Pack Training Kit FREE!
Tags: day trading, entrepreneurs, forex, Forex Trading, investing, Money, mutual funds, real estate, Retirement, small business, Stock Market, stocks, trading, wealth building
Posted in Retirement Communities | No Comments »
Tuesday, March 2nd, 2010
A futures contract is a security just like a stock or a bond with some similarities and many differences. A stock gives you the right to own a small part of the company while a bond makes you a lender to a company or the government.
Futures contract as the name implies is a binding contract between two parties for the delivery of a commodity or an asset or even a financial instrument at some future date between the buyer and seller of that contract. Futures market is a highly regulated market with the CFTC responsible for its regulation. Buyers and sellers don’t come in direct contact with each other. In between is the Central Clearing House that enforces the contract reducing the risk of party default!
Futures market is the backbone of the whole sale and retail commodity market ranging from oil, wheat, corn, heating oil, meat, cattle, soybeans and other foodstuff. So you can well imagine the importance of the futures market. Futures market serves the purpose of hedging and speculation.
Futures contracts are by design meant to limit the amount of time and risk exposure experienced by hedgers and speculators. What this means is that all futures contracts are time bound and at some point in the future they expire.
In the last decades, electronic trading has become highly popular among the traders. This includes futures as well. So, now you can easily trade these contracts by opening an account with a FCM brokerage and deposit an amount to start trading these contracts on margin. The minimum amount with most of the brokers is something like $5,000 but it can less too! Brokers allow leverage upto 10:1 when you trade on margin. Compare this to the leverage of 2:1 allowed by stock brokers.
In US, open outcry trading still takes place during the official hours at the different futures exchanges. However, most of these futures contracts also get traded electronically. GLOBEX allows electronic trading of most of these futures contracts 23 hours each day. Electronic trading provides a more level playing field, more price transparency and lower transaction costs.
The popular contracts that get traded on GLOBEX are the E-minis like the S&P 500, NASDAQ 100 and Dow. You can also trade E-mini gold futures as well as crude oil futures on GLOBEX. CME, NYMEX and CBOT are the three most important Futures Exchanges. GLOBEX allows you to trade most of the contracts that get traded on these exchanges.
You can find GLOBEX quotes on CNBC and Bloomberg! Now, GLOBEX trading continues during the night after the official close of CME, CBOT and NYMEX at 4:15 PM EST. However, overnight trading can be thin and highly volatile as compared to the official hours.
These GLOBEX quotes are real time and if you have taken a position with sell stop or a buy order, early next morning, you might find your position executed with a new position or out of the position altogether. Futures can be highly profitable if you know how to do it!
Mr. Ahmad Hassam has done Masters from Harvard University. Know this shocking Dow Futures Secret that can make you rich! Get this 49 page Quantum Swing Trading Report Plus the Profit Button Report that applies no matter what you trade FREE!
Tags: Commodities, Currency Trading, day trading, Etfs, financial planning, forex, Futures, investing, mutual funds, real estate, Retirement, Stock Market, stocks, trading
Posted in Retirement | No Comments »
Tuesday, March 2nd, 2010
Engulfing candlestick pattern is a double stick pattern. Double stick candlestick patterns do not appear frequently but when they do appear, it can mean a trend reversal is about to take place. Spotting a trend reversal before it happens is something that can be highly profitable in trading.
Double candlestick patterns are more complex than single candlestick patterns. You have to wait for two days for the pattern to shape up. It happens most of the time that you spot a double candlestick pattern developing on the first day but when you follow it the next day, you get disappointed as the pattern fizzles out.
There are trend continuation patterns and trend reversal patterns. An Engulfing Candlestick Pattern is a very important trading signal about the reversal of a trend. Two stick patterns are rare! However, it doesn’t mean that these two stick candlestick patterns do not form at all. They do! But don’t frequently. So if are able to spot a two stick pattern correctly, you can make a highly profitable trade.
Bullish Engulfing Candlestick Pattern is formed when the first day candle is completely covered by the body of the second day candle. The first day candle is bullish. The second day trading starts with an open lower than the previous day.
Thus indicating that the bears are still in control but soon these bears are overcome by the bulls. Selling is soon reversed by the emergence of buying. Infact so much buying takes place that both the previous days open and high both are surpassed.
Similarly a bearish engulfing candlstick pattern has to appear in an uptrend in order to be meaningful. When this pattern appears bears get into action. Short sellers think that the prices have gone too high and start massive selling in order to take profit and exit before others also start selling.
A massive chain reaction starts in the market. Everyone wants to sell and sell quick. The second day bearish candle covers the first day bullish candle meaning that bears have taken hold of the market and uptrend is reversing itself.
Never ever trade without putting the stop loss because nothing is 100% certain in trading. A candlestick pattern has to be confirmed by the subsequent price action on the following days. Now, the most important thing for any trader is where to place the stop loss. In case of a bullish engulfing candlestick pattern, place ths top loss on the low of the first day to be on the safe side. And in case of a bearish engulfing pattern, place the stop loss near the open of the second or signal day. This way even if the pattern is not confirmed with the subsequent price action, you are on the safe side. Happy trading!
Mr. Ahmad Hassam has done Masters from Harvard University. Get this 49 page Quantum Swing Trading Report FREE. Master these Candlestick Patterns with this 82 Page FREE PDF Candlestick Guide.
Tags: entrepreneurs, Etfs, finance, forex, investing, mutual funds, real estate, Retirement, small business, Stock Market, stocks, trading, wealth building
Posted in Retirement | No Comments »
Sunday, February 28th, 2010
There are simple as well as complex candlestick patterns. There are single stick, two stick as well as three stick candlestick patterns. Harami is a two stick candlestick pattern. Two stick patterns take two days to form on daily charts. A Harami is formed whent the first day candle is longer than the second day candle. Harami can be bullish as well as bearish!
This is an important signal that bulls are now active and trying to take hold of the market. This means that the downtrend will be soon over and an uptrend is about to start.A bullish Harami is formed in a downtrend when the first day candle is very bearish. But on the second day, the bulls come into play and beat the bears out of the market by taking the prices higher. However, the bulls are not completely successful and the second day is still lower than the first day open and the first day high is not crossed.
On the second day when the Harami is formed, the bears are still slightly ahead of the bulls at the start of trading. The open is higher than the close of the last day. However, the bulls close the day higher than the open.
What this means is that the bulls are still cautious about their success and fear that the bears might return to take the prices lower again. However, when this does not happen, it gives confidence to the bulls encouraging more buying in the market and the reversal of the trend.
What this means is that you need to confirm it with the price action on the following day. Now, like most of the candlestick patterns, a Harami can fail. Always place the stop loss first when you trade. When you spot a Harami, place the stop loss near the open of the second day.
Harami has a few variations. In the Bullish Harami Cross Pattern, the first day is bearish. On the second day or what you call the signal day, you will find a bullish Doji formed with an open higher than the close of the first day and a close lower than the open of the first day. Bullish Harami Cross is not a frequent pattern but when it does appear, it means an abrupt trend reversal.
When a bearish Harami is formed what this indicates is that bears have taken hold of the market now and are about to push the prices down signalling a downtrend is about to start! The bearish Harami is similar to a bullish Harami. It is formed in an uptrend. The first day is a usual bullish candle that forms in an uptrend. The second day candle is a bearish candle. It’s open is lower than the close of the first day. And it’s close is higher than the open of the first day.
Mr. Ahmad Hassam has done Masters from Harvard University. Read this shocking 40 page FRWC Brutal Truth Report on trading robots and how to test and optimize them FREE. Downlaod this 82 page PDF Candlestick Guide FREE!
Tags: banking, day trading, Etfs, forex, investing, Money, mutual funds, options, Personal Finance, Retirement, small business, Stock Market, stocks, trading
Posted in Retirement | No Comments »
Sunday, February 28th, 2010
Investment is always long term whereas trading is always short term. Day trading always has got a short term perspective and requires quick reflexes. Now day trading is not possible for many investors. Many people have a long term perspective. They feel more comfortable thinking about their long term financial goals and matching them with their investment strategies over months and even years.
Now a company’s stock may have a good long term prospects supported by strong fundamentals. But the stock may stay still for a long time before it catches the attention of the media and the investing public before it’s price get’s bid up. So an investor might have to wait for a long time before realizing a return on his or her investment. Many investors can learn a few tricks from day traders that can help them make a quick profit in a matter of days orn weeks instead of months or years.
Successful day trading requires an innate sense of discipline. Successful day trading requires the sense when to commit money to a trade and when to cut the losses and run. However, if you are an investor who has never day traded, you might have done so much research and committed so much time waiting for a position to work out that you might forget the cardinal rule of traders: The market doesn’t know you are in it.
When, there is momentum behind a security, it means that it’s price will continue to icnrease as long as it has got momentum. This way by investing in stocks having momentum behind them, you avoid the risk of getting stuck in stocks that might not move for months and months.
When investing, you try to buy low and sell high. In momentum investing, you buy high and sell even higher! One of the tricks that you can learn from day traders is momentum investing. In momentum investing, you look for securities that are expected to go up in prices accompanied by the underlying momentum. Now, when the price of a stock or security increases because of strong demand, it is said to have momentum behind it.
Now, when the price of a stock or security increases because of strong demand, it is said to have momentum behind it. When, there is momentum behind a security, it means that it’s price will continue to icnrease as long as it has got momentum. This way by investing in stocks having momentum behind them, you avoid the risk of getting stuck in stocks that might not move for months and months.
Momentum investing can also lead to bubbles like that happened in the dot com bubble in the last few years of 1990s. It is always a good idea to do some fundamental research on the companies before doing momentum investing.
Mr. Ahmad Hassam has done Masters from Harvard. Turn $200 into $100K in just 3 months with this FREE Penny Stock Report. Read this shocking 40 page PDF FREE FRWC Brutal Truth Report on trading robots!
Tags: bonds, credit, Currency Trading, day trading, Etfs, forex, Futures, home business, Money, mutual funds, options, real estate, Retirement, Stock Market, stocks, trading, wealth building
Posted in Retirement | No Comments »