By Mark Crisp
Momentum stocks are stocks with high returns over the past three to 12 months. Momentum investors seek out stocks with the potential to double or triple within just a few months. Momentum investors generally hold a stock for a few months and monitor their holdings daily. They tend to sell their stocks with a few months after acquiring it.
There are many stocks in the market that accelerate in price that go on to make 100% to 300% returns in less than year or even in a few months.
However, for the investors who are just starting, momentum investing can be a confusing and frustrating experience to find these stocks. Here are some keys to spot momentum stocks. One of the things to spot momentum stocks is the relative strength of the stock compared to the overall market over a specific timeframe. Most momentum investors seek at a stock which has outperformed at least 90% of all stocks over the past 12 months. When major indices declines, a great momentum stock exhibit strength by holding or even exceeding their highs. When the major indices rally, momentum stocks typically lead the rally and make new highs outpacing the market. Potential momentum stocks should show in their balance sheet that they are growing at an accelerated rate.
Another factor is the Earnings per Share growth. At least a 15% year-over-year earnings per share growth is needed to qualify a momentum stock. Stocks with accelerating rates of EPS growth over previous quarters are also considered.
In addition, a positive forecast by at least some analysts regarding the Company's earnings in necessary for identifying momentum stocks. Further, momentum investors also looks at whether the reported earnings exceeded the analysts forecasts compared to the last quarter. A company can't grow its earnings faster than its Return on Equity, which is the Company's net income divided by the number of shares held by investors, without raising cash by borrowing or selling more shares. Many companies raise cash by issuing stock or borrowing, but both alternatives reduce earnings-per-share growth. For momentum investors, a potential stock should show an ROE of 17% or better.
The share price and trading volume of the stock are also factors to spot a momentum stock. The only reason for stocks that trade at very low prices is that they are already out of favor with the market. Avoid stocks trading below US$5.
Momentum investors seek stocks that have high trading volumes, the number of shares traded daily on the average. Very low trading volumes indicate the markets lack of interest. Generally, momentum investors seek those with a minimum volume of 100,000 shares or at least see their average daily volume increases as the value of the stock rises.
Start keeping a list of potential momentum stocks and track their performance in the market. In time, you will be able to spot the stocks that go on to make 100% to 300% returns in less than year or even in a few months.
Get your Momentum Stock Trading System and sign up for my free weekly online trading system newsletter here at: http://www.stressfreetrading.com/.
Article Source: http://EzineArticles.com/?expert=Mark_Crisp
Friday, August 29, 2008
Thursday, August 28, 2008
How Do I Pick Stocks?
By Brendan Lee
Many investors identified stock investment as trading, but I identify stock investment as investing into the business of the company. Let me share how do I pick my stocks.
First I'll do a business analysis on the companies:
Company A sold 100 million units of product A at $1. Then the next year, company A sold 120 million units of product A at $1.20 (sold more products at higher price). Company B sold 100 million units of product B at $1. Then the next year, company B sold 120 million units of product B at $0.80 (sold more products at discounted price). Which is a better company?
Looking from a profitability perceptive, Company A is a better company. This is because despite rising the price of its goods, it is still able to sell more of its product, and resulted in expansion of its profit margin. This is a sign that the quality offers by the product is of superior quality, or this is a sign that the company possess certain competitive advantages.
As for company B, it tries to sell more of its products by lower down the price of its product (giving discount), thereby attracting more customers to buy its products. There is nothing fantastic about its business and management. Does this company sounds like some of the shopping malls in your neighborhood? Some shopping malls are only crowded with people when there is sales going on, when it has no sales, the shopping malls are so much quiet.
So what kind of business or industry will consumers willing to pay a higher price and possibly buying more at the same time?
1. Iron ore & copper suppliers (CVRD, Rio Tinto, BHP Billiton, Freeport Mcmoran, Southern Copper) Iron ore and copper supplies are mainly controlled by a few huge miner companies. So steel makers do not have much choice but end paying a higher price for the iron ore year after year.
2. Strong branding retailers (Apple) iPod from Apple costs $200 - $300 plus, somehow consumers are still willing to pay for this kind of price. Innovation is recession free, ever since Steve Jobs goes back to Apple, we have seen more and more innovative products coming out from Apple.
3. Oil rig contractors and oil services companies (Diamond Offshore, Transocean, Swiber Holdings, Schlumberger) As price of oil rises, demand for oil rigs increase as well. Oil rig contractors rise the rental of oil rigs to as high as USD600,000 a day now, and yet there are still demand for oil rigs.
4. Toll road companies (Anhui Expressway, listed in Hong Kong) If you need to drive from point A to point B, and the road that leads to point B is an expressway, you still have to go through this road even though price of toll fees increase.
5. Healthcare (United Healthcare) High price of healthcare services do not reduce the number of patients.
6. Niche industrial companies (Tai Sin, Armstrong Industrial, Yip's Chemical, Garmin Ltd and Google) Some industrial companies that have niche technology or competitive advantage enable them to command a higher premium for their goods and services.
After identifying the industry or companies that I'm interested in, then I'll do a financial analysis, reviewing their cashflows, debt level and valuation. I do not want to overpay a stock even though the company looks very solid.
If all looks ok, I'll invest some first, and buy more if fundamental continues to look strong.
Article Source: http://EzineArticles.com/?expert=Brendan_Lee
Many investors identified stock investment as trading, but I identify stock investment as investing into the business of the company. Let me share how do I pick my stocks.
First I'll do a business analysis on the companies:
Company A sold 100 million units of product A at $1. Then the next year, company A sold 120 million units of product A at $1.20 (sold more products at higher price). Company B sold 100 million units of product B at $1. Then the next year, company B sold 120 million units of product B at $0.80 (sold more products at discounted price). Which is a better company?
Looking from a profitability perceptive, Company A is a better company. This is because despite rising the price of its goods, it is still able to sell more of its product, and resulted in expansion of its profit margin. This is a sign that the quality offers by the product is of superior quality, or this is a sign that the company possess certain competitive advantages.
As for company B, it tries to sell more of its products by lower down the price of its product (giving discount), thereby attracting more customers to buy its products. There is nothing fantastic about its business and management. Does this company sounds like some of the shopping malls in your neighborhood? Some shopping malls are only crowded with people when there is sales going on, when it has no sales, the shopping malls are so much quiet.
So what kind of business or industry will consumers willing to pay a higher price and possibly buying more at the same time?
1. Iron ore & copper suppliers (CVRD, Rio Tinto, BHP Billiton, Freeport Mcmoran, Southern Copper) Iron ore and copper supplies are mainly controlled by a few huge miner companies. So steel makers do not have much choice but end paying a higher price for the iron ore year after year.
2. Strong branding retailers (Apple) iPod from Apple costs $200 - $300 plus, somehow consumers are still willing to pay for this kind of price. Innovation is recession free, ever since Steve Jobs goes back to Apple, we have seen more and more innovative products coming out from Apple.
3. Oil rig contractors and oil services companies (Diamond Offshore, Transocean, Swiber Holdings, Schlumberger) As price of oil rises, demand for oil rigs increase as well. Oil rig contractors rise the rental of oil rigs to as high as USD600,000 a day now, and yet there are still demand for oil rigs.
4. Toll road companies (Anhui Expressway, listed in Hong Kong) If you need to drive from point A to point B, and the road that leads to point B is an expressway, you still have to go through this road even though price of toll fees increase.
5. Healthcare (United Healthcare) High price of healthcare services do not reduce the number of patients.
6. Niche industrial companies (Tai Sin, Armstrong Industrial, Yip's Chemical, Garmin Ltd and Google) Some industrial companies that have niche technology or competitive advantage enable them to command a higher premium for their goods and services.
After identifying the industry or companies that I'm interested in, then I'll do a financial analysis, reviewing their cashflows, debt level and valuation. I do not want to overpay a stock even though the company looks very solid.
If all looks ok, I'll invest some first, and buy more if fundamental continues to look strong.
Article Source: http://EzineArticles.com/?expert=Brendan_Lee
Wednesday, August 27, 2008
Stock Market Trading Strategy - RSI Relative Strength Index
By Chris F Jones
Learn to trade using the RSI (Relative Strength Index) and see your trading profits increase. The RSI is one of the most used indicators available to traders. This little indicator can be used in several ways, and we will take a look at a few of them today. So, if you're ready lets get started.
First off, I guess we should give a little background of this tool and credit to it's developer. The Relative Strength Index was first introduced by J. Welles Wilder in the June 1978 issue of Commodities Magazine (it's now called Futures Magazine), and then later, it was reintroduced in his book, New Concepts in Technical Trading. OK, I think that's enough on the history, I don't want to bore you. I just thought we should give credit where credit is due. Now, lets get on to good stuff, how can we make money using this handy little momentum indicator.
The index follows the momentum of price as an Oscillator that ranges between 0 and 100. The index does this comparing the magnitude of a stock's recent gains to the magnitude of its recent losses. Using this scale of 0 to 100, you can determine overbought and oversold levels. Readings above 70 are considered overbought and anything under 30 oversold. So how does this help me in trading? If the RSI rises above 30 it is considered bullish for the underlying stock. On the other hand, if the RSI falls below 70, it is a bearish signal. That means if the RSI has fallen below 30 (meaning it's oversold) and rises back above 30, it could mark a potential entry point. Just remember, this should be used to confirm some other buy signal. Don't use it as a lone buy signal.
Then, there is my favorite signal, "The RSI Divergence". There are two types, the bullish and the bearish. A bullish divergence occurs when price makes a lower low and the RSI indicator makes a higher low. A bearish divergence is just the opposite, price makes a higher high, but RSI makes a lower high. So what does all this mean? If you see a stock put in a lower low, but the RSI doesn't confirm it with a lower low of it's own, then get ready for this stock to reverse it's trend.
That's just two ways you can use this indicator. There are many more. Learn all you can, never stop educating yourself, and you will see your profits go through the roof. I hope this article is of help. Good Luck, and may all your trades be on the winning side.
Chris F Jones is owner of Stocks-n-Options.com. An educational site, where stock and options traders can learn to trade using technical analysis. Visit http://www.stocks-n-options.com for more information.
Article Source: http://EzineArticles.com/?expert=Chris_F_Jones
Learn to trade using the RSI (Relative Strength Index) and see your trading profits increase. The RSI is one of the most used indicators available to traders. This little indicator can be used in several ways, and we will take a look at a few of them today. So, if you're ready lets get started.
First off, I guess we should give a little background of this tool and credit to it's developer. The Relative Strength Index was first introduced by J. Welles Wilder in the June 1978 issue of Commodities Magazine (it's now called Futures Magazine), and then later, it was reintroduced in his book, New Concepts in Technical Trading. OK, I think that's enough on the history, I don't want to bore you. I just thought we should give credit where credit is due. Now, lets get on to good stuff, how can we make money using this handy little momentum indicator.
The index follows the momentum of price as an Oscillator that ranges between 0 and 100. The index does this comparing the magnitude of a stock's recent gains to the magnitude of its recent losses. Using this scale of 0 to 100, you can determine overbought and oversold levels. Readings above 70 are considered overbought and anything under 30 oversold. So how does this help me in trading? If the RSI rises above 30 it is considered bullish for the underlying stock. On the other hand, if the RSI falls below 70, it is a bearish signal. That means if the RSI has fallen below 30 (meaning it's oversold) and rises back above 30, it could mark a potential entry point. Just remember, this should be used to confirm some other buy signal. Don't use it as a lone buy signal.
Then, there is my favorite signal, "The RSI Divergence". There are two types, the bullish and the bearish. A bullish divergence occurs when price makes a lower low and the RSI indicator makes a higher low. A bearish divergence is just the opposite, price makes a higher high, but RSI makes a lower high. So what does all this mean? If you see a stock put in a lower low, but the RSI doesn't confirm it with a lower low of it's own, then get ready for this stock to reverse it's trend.
That's just two ways you can use this indicator. There are many more. Learn all you can, never stop educating yourself, and you will see your profits go through the roof. I hope this article is of help. Good Luck, and may all your trades be on the winning side.
Chris F Jones is owner of Stocks-n-Options.com. An educational site, where stock and options traders can learn to trade using technical analysis. Visit http://www.stocks-n-options.com for more information.
Article Source: http://EzineArticles.com/?expert=Chris_F_Jones
Tuesday, August 26, 2008
Using Volume For Stockmarket Trading
By George Polizogopoulos
Using the On-Balance Volume
On-balance volume was the most widely used stock market tool for several decades now. It is a technical analysis indicator that was designed and fully intended to connect the relationship of two important aspects of a stock market which are the price and its volume. This indicator is based primarily on a running cumulative total volume.
This indicator will treat the volume as a plus when it is an up day and a minus on a down day. This would simply means that an up day is where the closing of the present day is higher than the closing of the previous day. When this happens, the volume will be added. But when it happens that the previous day's closing is higher than the present day, then it will be considered a down day with the volume correspondingly subtracted from the cumulative total.
Actually, this technical analysis indicator is a tool to confirm price movement. The concept is based on the premise that volume will be higher on trading days where the price moves in a positive direction. And volume will accordingly diminish when prices moves negatively.
It is therefore logical that when prices are going up so will the OBV and when prices will make another upward run so does again will the OBV. But if OBV fails to pass its previous day high, then it would suggest a down day or a weak day.
Weighted Volume - A More Effective Indicator
A simple way of refining more the OBV indicator will be to take the weighted volume of the day's market transaction to have a more comprehensive grasp of the market. This procedure will be to compare the daily volume with the average recent volume.
With the use of a composite indicator you can then get the weighted volume index when you measure and input the actual price movement.
By using this approach, you can be assured of a more reliable way of gauging the market as this approach considers the volume and its relationship to comparative price direction. Another benefit that you can gain by using this method is that you can easily identify abnormality of price and volume movements.
Utilizing the Volume Spread Analysis
Volume Spread Analysis creates the opportunity for skilled and professional traders to be able to buy stocks wholesale while the market is moving up and then again to resale this huge wholesale stock that they bought piece by piece to individual and small time market traders.
This stock retailing by professional traders is done without affecting the movement in the stock prices since they have already figured out the price movements through their visual reading of the volume spread analysis.
In real terms, volume spread analysis is what most professional stock market trader's use in playing the market. The analysis is interplay of three important variables that they have to monitor to correctly determine the market. These variables are the amount of volume on a price bar, the rice spread of the bar and the closing day price range.
These variables are simply hard to detect and so traders with large holdings plays these variables through visual detections. If they play it right, these traders will be able to know where the money is going and they can then unload their holdings to these small market players while maintaining the positive price movement of the market.
The Best Volume Signal
Finally, if you happen to be a small time trader, you can try finding for the best volume signal in the market. Once you learned of a steady slide in the market, try to gauge the movement. Try to be patient and do not immediately pounce on some short backing but do time your move for that upward thrust that sometimes follows a heavy downward spiral. This upward burst is a counter trend but will give small traders good earnings on the side.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
Using the On-Balance Volume
On-balance volume was the most widely used stock market tool for several decades now. It is a technical analysis indicator that was designed and fully intended to connect the relationship of two important aspects of a stock market which are the price and its volume. This indicator is based primarily on a running cumulative total volume.
This indicator will treat the volume as a plus when it is an up day and a minus on a down day. This would simply means that an up day is where the closing of the present day is higher than the closing of the previous day. When this happens, the volume will be added. But when it happens that the previous day's closing is higher than the present day, then it will be considered a down day with the volume correspondingly subtracted from the cumulative total.
Actually, this technical analysis indicator is a tool to confirm price movement. The concept is based on the premise that volume will be higher on trading days where the price moves in a positive direction. And volume will accordingly diminish when prices moves negatively.
It is therefore logical that when prices are going up so will the OBV and when prices will make another upward run so does again will the OBV. But if OBV fails to pass its previous day high, then it would suggest a down day or a weak day.
Weighted Volume - A More Effective Indicator
A simple way of refining more the OBV indicator will be to take the weighted volume of the day's market transaction to have a more comprehensive grasp of the market. This procedure will be to compare the daily volume with the average recent volume.
With the use of a composite indicator you can then get the weighted volume index when you measure and input the actual price movement.
By using this approach, you can be assured of a more reliable way of gauging the market as this approach considers the volume and its relationship to comparative price direction. Another benefit that you can gain by using this method is that you can easily identify abnormality of price and volume movements.
Utilizing the Volume Spread Analysis
Volume Spread Analysis creates the opportunity for skilled and professional traders to be able to buy stocks wholesale while the market is moving up and then again to resale this huge wholesale stock that they bought piece by piece to individual and small time market traders.
This stock retailing by professional traders is done without affecting the movement in the stock prices since they have already figured out the price movements through their visual reading of the volume spread analysis.
In real terms, volume spread analysis is what most professional stock market trader's use in playing the market. The analysis is interplay of three important variables that they have to monitor to correctly determine the market. These variables are the amount of volume on a price bar, the rice spread of the bar and the closing day price range.
These variables are simply hard to detect and so traders with large holdings plays these variables through visual detections. If they play it right, these traders will be able to know where the money is going and they can then unload their holdings to these small market players while maintaining the positive price movement of the market.
The Best Volume Signal
Finally, if you happen to be a small time trader, you can try finding for the best volume signal in the market. Once you learned of a steady slide in the market, try to gauge the movement. Try to be patient and do not immediately pounce on some short backing but do time your move for that upward thrust that sometimes follows a heavy downward spiral. This upward burst is a counter trend but will give small traders good earnings on the side.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
Monday, August 25, 2008
7 Wise Stock Market Investing Rules
By Ian C Jackson
It would be foolhardy indeed to embark upon any exciting adventure without the proper equipment and tools of the trade. Stock market trading is exactly the same.
The reason why most tend to fail is because they are ill equipped or have simply ignored sound advice. Arm yourself with the correct equipment to do the job properly and you will be on the way to capture many a prosperous trading opportunity. Here are 7 recommendations you would be wise to follow:
1. As a good rule of thumb, never expose more than 5 percent of your trading budget to any one trade. This way, if one trade goes against you, your losses are kept in check and you can still trade on another day.
2. Unless you are a highly experienced trader, you would be most unwise not to use a Stop Loss. Simply, this is an insurance against potential large losses if you trade goes against you
3. Emotion. There are two emotions playing a hard game in the stock market, they are greed and fear. You need to harness and these two emotions within yourself. You may think this is not possible, but you can, and must, educate yourself.
4. Do not follow the crowd. I strongly advise that you do not trade on the recommendations or tips of other people, even if they are you best friends. By all means use advice or reports as research, but ultimately it should be your decision, based on you judgement.
5. Don't trade on borrowed money. Never open a trading account or trade using a loan or credit. The idea is to end up trading with the money of other people, in other words, from the profits you make from successful trades you make.
6. Plan your trade & stick to it. You will find a trading strategy with which you are happy. Honestly you will. I did, and so did every successful trader. Once you find it, study it and paper-trade it first, in other words, practice using a dummy account.
7. Ensure you educate yourself properly. The biggest reason for a trader losing in the stock market is because of lack of knowledge. They fail to educate themselves properly, hastily jumping in where sound knowledge fears to tread.
How would you like to discover more about the techniques successful traders use to make profitable trades?
Download them free here: Day Trading Course
Ian Jackson is an authority on Day Trading information, learning the hard way - and now he reveals how you can learn the business too, without all the growing pains.
Article Source: http://EzineArticles.com/?expert=Ian_C_Jackson
It would be foolhardy indeed to embark upon any exciting adventure without the proper equipment and tools of the trade. Stock market trading is exactly the same.
The reason why most tend to fail is because they are ill equipped or have simply ignored sound advice. Arm yourself with the correct equipment to do the job properly and you will be on the way to capture many a prosperous trading opportunity. Here are 7 recommendations you would be wise to follow:
1. As a good rule of thumb, never expose more than 5 percent of your trading budget to any one trade. This way, if one trade goes against you, your losses are kept in check and you can still trade on another day.
2. Unless you are a highly experienced trader, you would be most unwise not to use a Stop Loss. Simply, this is an insurance against potential large losses if you trade goes against you
3. Emotion. There are two emotions playing a hard game in the stock market, they are greed and fear. You need to harness and these two emotions within yourself. You may think this is not possible, but you can, and must, educate yourself.
4. Do not follow the crowd. I strongly advise that you do not trade on the recommendations or tips of other people, even if they are you best friends. By all means use advice or reports as research, but ultimately it should be your decision, based on you judgement.
5. Don't trade on borrowed money. Never open a trading account or trade using a loan or credit. The idea is to end up trading with the money of other people, in other words, from the profits you make from successful trades you make.
6. Plan your trade & stick to it. You will find a trading strategy with which you are happy. Honestly you will. I did, and so did every successful trader. Once you find it, study it and paper-trade it first, in other words, practice using a dummy account.
7. Ensure you educate yourself properly. The biggest reason for a trader losing in the stock market is because of lack of knowledge. They fail to educate themselves properly, hastily jumping in where sound knowledge fears to tread.
How would you like to discover more about the techniques successful traders use to make profitable trades?
Download them free here: Day Trading Course
Ian Jackson is an authority on Day Trading information, learning the hard way - and now he reveals how you can learn the business too, without all the growing pains.
Article Source: http://EzineArticles.com/?expert=Ian_C_Jackson
Friday, August 22, 2008
Gann Analysis For a Successful Trade
By George Polizogopoulos
One of the pioneers of technical analysis of the stock market was W.D. Gann. In 1908, he created his analysis known as the market time factor. To test his analysis, he opened one account and invested 300 dollars. After only 3 months, he was able to make 25,000 dollars in profit.
After his transactions were verified and the analysis that he used were uncovered, he became an instant celebrity in Wall Street. Soon he was making money with his technical analysis and he begun to attract many followers who became convinced that by using his market time factor analysis they can beat the market and make money out of it.
Actually, his market time factor analysis to predict price movements of stocks where based on three factors which are price, time and range. Added to these will be the premise that the markets are cyclical in nature and geometrical in design.
The Three Pronged Gann Analysis
Using these three factors, Gann was able to develop his system of stock price movement prediction through a three-pronged approach which is as follows;
Price Study - This approach would have to utilize support and resistance lines, and also pivot points and angles.
Time Study- Historically reoccurring dates are considered on these approach through natural and social inter relation.
Pattern Study -This kind of approach would focus on market swings and will utilize trend lines and also reversal patterns.
Constructing Gann Angles
When constructing a Gann Angles for your analysis, bear in mind that these forms of analysis in determining the price movements of stocks are not fixed but are empirical methods. The following will be the process:
1 - Always Determine the Time Units - An empirical process. The usual way to do this is by taking the stock's chart to heart through a furtive study and by carefully noting the distances by which price movements occur. Once you have determined the time unit then you can now proceed to put the angles to test for accuracy of results.
You can either use the intermediate term which is one to three months charts. Others may opt for the long term which is a multi-year charts or short term which is one to seven day charts. For best results, however, it is recommend that the intermediate term charts be used to produce the optimal amount of patterns.
2 - Next, Find the High or Low Where You Will Draw the Gann Lines - Another empirical process and the usual way to do it is to utilize other kinds of technical analysis like the Fibonacci levels or you can use the pivot points. You can also use price swings for this purpose.
3 - You Have Now to Know Which Pattern to Use - Your choice will simply be on the variations in the slope of the line with the numbers provided referring to the number of units that determines the variations of the slope lines.
4 - You Can Now Draw the Patterns - You have to take note of the directions. It can either be downward and to the right from an elevated point, or upward and to the right from a base or low point.
5 - Start your search for repeat past patters from the charts - You have to remember that this analysis for predicting price movements is based on the assumption that markets are cyclical.
Practice with Gann Angles towards a Successful Trade
When you use this system, you have to note that it needs time for you to perfect the approach. Results will depend depending on the skill of the person using this method. It is suggested that constant practice should be made until such time when you will be hitting a good average of success in predicting the price movements When you do actual trading, it is suggested that you combine this method with other technical indicators to increase your chances of success.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
One of the pioneers of technical analysis of the stock market was W.D. Gann. In 1908, he created his analysis known as the market time factor. To test his analysis, he opened one account and invested 300 dollars. After only 3 months, he was able to make 25,000 dollars in profit.
After his transactions were verified and the analysis that he used were uncovered, he became an instant celebrity in Wall Street. Soon he was making money with his technical analysis and he begun to attract many followers who became convinced that by using his market time factor analysis they can beat the market and make money out of it.
Actually, his market time factor analysis to predict price movements of stocks where based on three factors which are price, time and range. Added to these will be the premise that the markets are cyclical in nature and geometrical in design.
The Three Pronged Gann Analysis
Using these three factors, Gann was able to develop his system of stock price movement prediction through a three-pronged approach which is as follows;
Price Study - This approach would have to utilize support and resistance lines, and also pivot points and angles.
Time Study- Historically reoccurring dates are considered on these approach through natural and social inter relation.
Pattern Study -This kind of approach would focus on market swings and will utilize trend lines and also reversal patterns.
Constructing Gann Angles
When constructing a Gann Angles for your analysis, bear in mind that these forms of analysis in determining the price movements of stocks are not fixed but are empirical methods. The following will be the process:
1 - Always Determine the Time Units - An empirical process. The usual way to do this is by taking the stock's chart to heart through a furtive study and by carefully noting the distances by which price movements occur. Once you have determined the time unit then you can now proceed to put the angles to test for accuracy of results.
You can either use the intermediate term which is one to three months charts. Others may opt for the long term which is a multi-year charts or short term which is one to seven day charts. For best results, however, it is recommend that the intermediate term charts be used to produce the optimal amount of patterns.
2 - Next, Find the High or Low Where You Will Draw the Gann Lines - Another empirical process and the usual way to do it is to utilize other kinds of technical analysis like the Fibonacci levels or you can use the pivot points. You can also use price swings for this purpose.
3 - You Have Now to Know Which Pattern to Use - Your choice will simply be on the variations in the slope of the line with the numbers provided referring to the number of units that determines the variations of the slope lines.
4 - You Can Now Draw the Patterns - You have to take note of the directions. It can either be downward and to the right from an elevated point, or upward and to the right from a base or low point.
5 - Start your search for repeat past patters from the charts - You have to remember that this analysis for predicting price movements is based on the assumption that markets are cyclical.
Practice with Gann Angles towards a Successful Trade
When you use this system, you have to note that it needs time for you to perfect the approach. Results will depend depending on the skill of the person using this method. It is suggested that constant practice should be made until such time when you will be hitting a good average of success in predicting the price movements When you do actual trading, it is suggested that you combine this method with other technical indicators to increase your chances of success.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
Thursday, August 21, 2008
Trade Big
By George Polizogopoulos
Stock market traders are of two kinds; those who go for the small boards and those who trade big boards. What I mean for small boards are those listed stocks in mines and other natural resource exploration, while those in trade big boards are the industrial and commercial sectors. Natural resource explorations like mines, oil and gas are considered as small boards precisely because of the amount that they offer per share. Most mining and oil exploration shares are listed by cents. This precisely is the reason why they are called small boards' listings.
On the other hand those that are listed on the trade big boards are industrial and commercial shares whereby their cost per share can even go as high as 50 dollars per share or even higher. Industrial sector listings would include manufacturing concerns involve in food, shelter, clothing, transportation, electronics and computer and even heavy machinery productions. Commercial sector on the other hand would mean companies that are into trading like companies in the buy and sell and distribution of consumable and non-consumable items and service companies. Financial companies like banks and investment houses are also grouped in this category.
Most people believe that in buying stocks you have to give preference to stocks that are directly related to the production of food, shelter, education and other basic needs of today's consumers like electronic and communication products as well as transportation, medicine and transport. They would say that although most of these stocks are a bit pricey, you can depend on their ability to withstand volatility of the market because of the continuing need of the public for the goods that they produce. They would add that with these kinds of stocks you will not be subjected to the vagrancies of inflation as your shares would tend to go up with it. In short, they will advise you to trade big.
Indeed, if you are new to stock market trading, it would be advisable to go for dependable stocks. Do not bother with those mining shares that go for less than one cent per share. These stocks are attractive because you can have a bundle of shares for only 50 bucks. However, you have to be careful if you do decide to invest on mining shares. Your 50 dollars worth of shares can suddenly be worth 20 dollars if a sudden drop in gold, copper or mining will transpire. This is the nature of mining stocks. It is very volatile since gold as a mineral is affected in the pricing of currency such as the dollar. And a sudden drop in the price of gold will have repercussions to other minerals mined such as silver and copper. So, trade big to avoid these pitfalls.
Another tip that you have to keep in mind when you trade big is to be extra conscious with price fluctuation. When you happen to see a rapid upward movement of a particular stock, do not aspire to go with the sudden surge. There is a great possibility that the surge will suddenly cease and fall back lower that the previous level before its upward surge. Always try to open your ears and eyes to any breaking news that might have an impact on stocks and make your move if you sense something is on the offing. It is far better to be first in the bandwagon when it starts to move than to be the last when the bandwagon is already falling down headlong.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
Stock market traders are of two kinds; those who go for the small boards and those who trade big boards. What I mean for small boards are those listed stocks in mines and other natural resource exploration, while those in trade big boards are the industrial and commercial sectors. Natural resource explorations like mines, oil and gas are considered as small boards precisely because of the amount that they offer per share. Most mining and oil exploration shares are listed by cents. This precisely is the reason why they are called small boards' listings.
On the other hand those that are listed on the trade big boards are industrial and commercial shares whereby their cost per share can even go as high as 50 dollars per share or even higher. Industrial sector listings would include manufacturing concerns involve in food, shelter, clothing, transportation, electronics and computer and even heavy machinery productions. Commercial sector on the other hand would mean companies that are into trading like companies in the buy and sell and distribution of consumable and non-consumable items and service companies. Financial companies like banks and investment houses are also grouped in this category.
Most people believe that in buying stocks you have to give preference to stocks that are directly related to the production of food, shelter, education and other basic needs of today's consumers like electronic and communication products as well as transportation, medicine and transport. They would say that although most of these stocks are a bit pricey, you can depend on their ability to withstand volatility of the market because of the continuing need of the public for the goods that they produce. They would add that with these kinds of stocks you will not be subjected to the vagrancies of inflation as your shares would tend to go up with it. In short, they will advise you to trade big.
Indeed, if you are new to stock market trading, it would be advisable to go for dependable stocks. Do not bother with those mining shares that go for less than one cent per share. These stocks are attractive because you can have a bundle of shares for only 50 bucks. However, you have to be careful if you do decide to invest on mining shares. Your 50 dollars worth of shares can suddenly be worth 20 dollars if a sudden drop in gold, copper or mining will transpire. This is the nature of mining stocks. It is very volatile since gold as a mineral is affected in the pricing of currency such as the dollar. And a sudden drop in the price of gold will have repercussions to other minerals mined such as silver and copper. So, trade big to avoid these pitfalls.
Another tip that you have to keep in mind when you trade big is to be extra conscious with price fluctuation. When you happen to see a rapid upward movement of a particular stock, do not aspire to go with the sudden surge. There is a great possibility that the surge will suddenly cease and fall back lower that the previous level before its upward surge. Always try to open your ears and eyes to any breaking news that might have an impact on stocks and make your move if you sense something is on the offing. It is far better to be first in the bandwagon when it starts to move than to be the last when the bandwagon is already falling down headlong.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
Wednesday, August 20, 2008
Steps You Should Consider For Fundamental Analysis of Stock Market Trading
By Ian C Jackson
No matter what it is you trade, your success in the stock market depends upon a thorough knowledge of how to analyse and then make a good judgement for placing a trade, or opening a position. This boils down to two methods for trading, one being an analysis of company performance, the other a study of charts and their price patterns; Fundamentals, and technical analysis, respectively.
On the other hand, the technical analyst will closely scrutinize the prices of a stock on his or her chart. Based on historical performance, a judgment is made on the impending direction of the stock price.
Fundamentals are the observations made of the economic climate of a country. It's a look at the grand scheme of things, if you will. The notion being that the strength, or weakness of a county's economy influences its currency in terms of supply and demand. This in turn influences the value of its currency.
By way of example, if a major upswing occurs in the US economy, it will be strengthened thus a rise in the dollar value can be expected and heavy investment will follow. The bullish mood will take traders and in a self-fulfilling prophecy, the dollar's value rises.
A very simple task, one might assume. But one shouldn't get too excited, as all is not as easy as it might at first appear. There are so many factors that come into play when factoring the economy of any country and traders so often make different interpretations at to what the economy is doing, and will do.
The technique of fundamental analysis looks at the economic indicators, searching for the signs suggesting strength of economy. These indicators include, unemployment, consumer price index, interest rates, GDP and so on.
These criteria are shown in analysis reports that are regularly released by government agencies, and non-government institutions. Note their release dates for yourself and take a few notes of their impact on prices over the period of a few months.
Be careful because numbers may not necessarily be what they appear to be. Their impact should be judged in accordance with other things too, such as forecasted criteria. Be cautious about their absolute value. Meaning that a rise in the interest rate may not be as significant if it's expected, than if it is not. The adverse scenario could heavily affect prices.
A word of warning. Fundamental analysis is fine in its own right, but be aware that it does only show the big picture. You need specific entry and exit points to be able to trade, and it does not offer that, so use it alongside technical analysis, or charting.
How would you like to discover more about the techniques successful traders use to make profitable trades?
Download them free here: Day Trading Course
Ian Jackson is an authority on Day Trading information, learning the hard way - and now he reveals how you can learn the business too, without all the growing pains.
Article Source: http://EzineArticles.com/?expert=Ian_C_Jackson
No matter what it is you trade, your success in the stock market depends upon a thorough knowledge of how to analyse and then make a good judgement for placing a trade, or opening a position. This boils down to two methods for trading, one being an analysis of company performance, the other a study of charts and their price patterns; Fundamentals, and technical analysis, respectively.
On the other hand, the technical analyst will closely scrutinize the prices of a stock on his or her chart. Based on historical performance, a judgment is made on the impending direction of the stock price.
Fundamentals are the observations made of the economic climate of a country. It's a look at the grand scheme of things, if you will. The notion being that the strength, or weakness of a county's economy influences its currency in terms of supply and demand. This in turn influences the value of its currency.
By way of example, if a major upswing occurs in the US economy, it will be strengthened thus a rise in the dollar value can be expected and heavy investment will follow. The bullish mood will take traders and in a self-fulfilling prophecy, the dollar's value rises.
A very simple task, one might assume. But one shouldn't get too excited, as all is not as easy as it might at first appear. There are so many factors that come into play when factoring the economy of any country and traders so often make different interpretations at to what the economy is doing, and will do.
The technique of fundamental analysis looks at the economic indicators, searching for the signs suggesting strength of economy. These indicators include, unemployment, consumer price index, interest rates, GDP and so on.
These criteria are shown in analysis reports that are regularly released by government agencies, and non-government institutions. Note their release dates for yourself and take a few notes of their impact on prices over the period of a few months.
Be careful because numbers may not necessarily be what they appear to be. Their impact should be judged in accordance with other things too, such as forecasted criteria. Be cautious about their absolute value. Meaning that a rise in the interest rate may not be as significant if it's expected, than if it is not. The adverse scenario could heavily affect prices.
A word of warning. Fundamental analysis is fine in its own right, but be aware that it does only show the big picture. You need specific entry and exit points to be able to trade, and it does not offer that, so use it alongside technical analysis, or charting.
How would you like to discover more about the techniques successful traders use to make profitable trades?
Download them free here: Day Trading Course
Ian Jackson is an authority on Day Trading information, learning the hard way - and now he reveals how you can learn the business too, without all the growing pains.
Article Source: http://EzineArticles.com/?expert=Ian_C_Jackson
Tuesday, August 19, 2008
Researching the Stock Market
By George Polizogopoulos
The stock market environment is now highly charged with differing assumptions theories and analysis because of research in stock market. This environment has given way to a new breed of brokerage houses and brokers who conduct research in stock market to fully understand the market and its behavior given the differing sets and circumstances of factors that would tend to influence its mood and temperament.
These researchers tend to measure the volatility of the market and its placidness against a backdrop of historical movements that would enable them to draft a conclusive pattern of its behavior, initiate theoretical formulation of its swings, angles, curvatures and every thing else worthy of formulation. Even stay at home investors have now become stock market researchers on their own initiative aided by the wonders of internet broadband technology and the many software applications brimming with different indicators and analytical formulations.
Research Using the Fundamental Analysis
These on-going researching projects are divided into two fronts. The first kind of research is known as the Fundamental Analysis. This kind of research would concentrate more on the full examination of listed companies to know their real value utilizing all the needed valuation techniques and procedures to include the scrutiny of all financial statements. This research to a company's weakness or strength will involve the examination of its balance sheet, income and expense statements, annual reports, cash flows, budget projections and variances, corporate legal statements of officers, company performance measured against industry standards, macro-economics and all other information that can lead to a full evaluation of the real worth of the target company. Those that usually would undertake these kinds of researches are those whose aims are to uncover under valued stocks, snap it at their lowest price levels and earn profit from their investments when the real worth of the stocks becomes public.
Research based on Technical Analysis
The second kind of research in the stock market is what is known as the Technical Analysis. This kind of analysis is entirely different since it does not involve itself with the make-up of any listed companies. Instead, it focuses its analysis and observations of the price movement of a share listings that it is interested in, study its market history and patterns using the market charts and other software tools. Those that undertake this kind of research usually are investors who believe in market trending or patterns. They are one in saying that the market always move in trend and are sometimes subject to unexplained behavior or volatility but will in effect return to its normal pattern. Most of those who de research on this market behavior have one thing in mind - to correctly analyze where the price of share will move so that they can profit from their investment.
Technical Analysis and its Three focus grouping
Unlike fundamental Analysis where there is only one focus which would be none other than to determine the actual worth of a listed share, with technical analysis, you get to know three kinds of focus grouping.
The first group goes for the concept that the market is not random and thus it follows certain trends which would make their research trend oriented based on the market's charts.
The second group on the other hand, would go for the opposite direction. This group would embrace the random theory of the stock market, or any random indication that the market has. And instead of studying the charts, they will be memorizing the teachings of gurus espousing the random theory.
The third group will be the historians. Their research in stock market will focus more on the history of the stock market movements. Their belief is that history repeats itself every now and then. Like the trend believers, they would also be studying the charts history and will try to ascertain if when the history will again repeat itself.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
The stock market environment is now highly charged with differing assumptions theories and analysis because of research in stock market. This environment has given way to a new breed of brokerage houses and brokers who conduct research in stock market to fully understand the market and its behavior given the differing sets and circumstances of factors that would tend to influence its mood and temperament.
These researchers tend to measure the volatility of the market and its placidness against a backdrop of historical movements that would enable them to draft a conclusive pattern of its behavior, initiate theoretical formulation of its swings, angles, curvatures and every thing else worthy of formulation. Even stay at home investors have now become stock market researchers on their own initiative aided by the wonders of internet broadband technology and the many software applications brimming with different indicators and analytical formulations.
Research Using the Fundamental Analysis
These on-going researching projects are divided into two fronts. The first kind of research is known as the Fundamental Analysis. This kind of research would concentrate more on the full examination of listed companies to know their real value utilizing all the needed valuation techniques and procedures to include the scrutiny of all financial statements. This research to a company's weakness or strength will involve the examination of its balance sheet, income and expense statements, annual reports, cash flows, budget projections and variances, corporate legal statements of officers, company performance measured against industry standards, macro-economics and all other information that can lead to a full evaluation of the real worth of the target company. Those that usually would undertake these kinds of researches are those whose aims are to uncover under valued stocks, snap it at their lowest price levels and earn profit from their investments when the real worth of the stocks becomes public.
Research based on Technical Analysis
The second kind of research in the stock market is what is known as the Technical Analysis. This kind of analysis is entirely different since it does not involve itself with the make-up of any listed companies. Instead, it focuses its analysis and observations of the price movement of a share listings that it is interested in, study its market history and patterns using the market charts and other software tools. Those that undertake this kind of research usually are investors who believe in market trending or patterns. They are one in saying that the market always move in trend and are sometimes subject to unexplained behavior or volatility but will in effect return to its normal pattern. Most of those who de research on this market behavior have one thing in mind - to correctly analyze where the price of share will move so that they can profit from their investment.
Technical Analysis and its Three focus grouping
Unlike fundamental Analysis where there is only one focus which would be none other than to determine the actual worth of a listed share, with technical analysis, you get to know three kinds of focus grouping.
The first group goes for the concept that the market is not random and thus it follows certain trends which would make their research trend oriented based on the market's charts.
The second group on the other hand, would go for the opposite direction. This group would embrace the random theory of the stock market, or any random indication that the market has. And instead of studying the charts, they will be memorizing the teachings of gurus espousing the random theory.
The third group will be the historians. Their research in stock market will focus more on the history of the stock market movements. Their belief is that history repeats itself every now and then. Like the trend believers, they would also be studying the charts history and will try to ascertain if when the history will again repeat itself.
George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD's.
Article Source: http://EzineArticles.com/?expert=George_Polizogopoulos
Monday, August 11, 2008
The Conditions For Growth of Good Stocks
By Omar L. Caban
A smart investor is always on the look out for growth. Share prices are directly proportionate to the respective company's worth in the stock market. So, it is always wise to seek companies which are rising in value. When you hold on stocks of companies that manifest relentless growth, handsome stock market returns are achieved.
But in this aspect don't always focus on the projected growth rates. If all of a sudden the stock market start to lose faith in the said company's prospects, the result can be horrific.
The characteristics of the best growth stock are a combination of potential upward growth along with sizable safety margin. They ought to satisfy three conditions:
1. A good growth rate
It is preferable if the company has fast growth instead of a slow one when the rest of the factors are equal. This is because even the minute relative changes in growth rate can make a substantial difference to the investors.
2. Sustainability
Stretch your vision beyond the growth estimates. Not the 'estimate' but the 'sustainability' of growth is more important in order to achieve great returns. This is a common mistake done by even the clever growth investors. They focus so much on the growth rate that they stand to ignore the logical sustainability of that growth. This myopic vision is the prime reason behind the tech bubble. People get allured by the high growth projections but fail to notice that the company has negligible or few competitive advantages. When the bubble pops, the company disappears and the investors bite the dust.
3. A good price
Don't end up paying far too much for growth. It makes sense if occasionally you pay a hiked up price, because you can rely on the sustained growth of the company. But take care not to defy logical calculations that it makes virtually impossible for you to uphold even a marginal profit even in the situation where the growth is not hampered. It is a good idea to select a growth stock which is fairly priced or undervalued. A discounted cash flow (DCF) calculation will aid you to calculate the fair value of a growth company.
These three central ideas shouldn't lead you to think that value investment strategy is to look for unpopular penny stocks You need to look for growth stocks from strong companies that possess reasonable positive growth prospects. And when you get growth stocks at a reasonable price offering sustainable growth, you can rest assured about your long term profits.
Best Growth Stock Market Report provides you with the best stock picks and stock market advices
Article Source: http://EzineArticles.com/?expert=Omar_L._Caban
A smart investor is always on the look out for growth. Share prices are directly proportionate to the respective company's worth in the stock market. So, it is always wise to seek companies which are rising in value. When you hold on stocks of companies that manifest relentless growth, handsome stock market returns are achieved.
But in this aspect don't always focus on the projected growth rates. If all of a sudden the stock market start to lose faith in the said company's prospects, the result can be horrific.
The characteristics of the best growth stock are a combination of potential upward growth along with sizable safety margin. They ought to satisfy three conditions:
1. A good growth rate
It is preferable if the company has fast growth instead of a slow one when the rest of the factors are equal. This is because even the minute relative changes in growth rate can make a substantial difference to the investors.
2. Sustainability
Stretch your vision beyond the growth estimates. Not the 'estimate' but the 'sustainability' of growth is more important in order to achieve great returns. This is a common mistake done by even the clever growth investors. They focus so much on the growth rate that they stand to ignore the logical sustainability of that growth. This myopic vision is the prime reason behind the tech bubble. People get allured by the high growth projections but fail to notice that the company has negligible or few competitive advantages. When the bubble pops, the company disappears and the investors bite the dust.
3. A good price
Don't end up paying far too much for growth. It makes sense if occasionally you pay a hiked up price, because you can rely on the sustained growth of the company. But take care not to defy logical calculations that it makes virtually impossible for you to uphold even a marginal profit even in the situation where the growth is not hampered. It is a good idea to select a growth stock which is fairly priced or undervalued. A discounted cash flow (DCF) calculation will aid you to calculate the fair value of a growth company.
These three central ideas shouldn't lead you to think that value investment strategy is to look for unpopular penny stocks You need to look for growth stocks from strong companies that possess reasonable positive growth prospects. And when you get growth stocks at a reasonable price offering sustainable growth, you can rest assured about your long term profits.
Best Growth Stock Market Report provides you with the best stock picks and stock market advices
Article Source: http://EzineArticles.com/?expert=Omar_L._Caban
Sunday, August 10, 2008
Intelligent Stock Trading For Intelligent Profits
By Micheal James
hat is called as intelligent trading? How professional traders always make profits in the stock market? What are the skills you need to have before you start investing in the market? There are several such questions that need to be answered in order to understand the functionality of trading. For first time investors, answers to these questions are really important. Well, take each question in detail and see the key answers:
The very first question asked above is: what is intelligent trading? Well, this is the most common question, but the answer is not as easy as it seems. Intelligent stock trading involves many things including good market knowledge, good market analysis and above all a good positive attitude. All these together form the base of intelligent trading. The very next question is closely related to the first question. Those who practice intelligent trading are always successful in the stock market. And if you talk about professionals, they are experienced traders and follow all the necessary steps that are required for successful trading.
Now, the basic question comes - what are the skills you need to have before you actually start investing in stocks? Well, this fundamental yet important question really plays a very crucial role. Without skills, you cannot make substantial profits in the market. Therefore, it is very important to first understand the market - learn all the basic terms that are readily being used in trading. Learn to read charts and stock quotes, learn about the trading processes, how it works and the tips that are involved in successful trading.
You can access a wealth of information on the company website. Read articles, news, reviews and other educational content on the web and educate yourself. You can also access charts and quotes - analyze the data and learn more about it. Once you are through, you can start trading right from your home, office or anywhere in the world. Thanks to the Internet world that has given a new vista to the investment industry.
It is important to mention that the most vital factor involved in trading is the buying and selling of stocks. All your market knowledge help you trade intelligently in the volatile market. If you want to trade intelligently, you need to analyze the market first. This is really important - analysis not only helps you understand the market, it allows you to get rid of the subtle risks that are involved in trading. Use analysis tools that are available online - analyze the data and make an intelligent strategy for buying and selling of stocks.
You should know when to buy and sell stocks in order to gain maximum profits. Target leading company shares and also some small-scale companies based on the growth structure and previous company records. You can also take some help from your online broker - he will definitely help you in the whole trading process. In addition, keep you abreast of the latest market news updates. And in any case if you want to discuss some issues - you can consult with online financial experts and discuss your issues in detail.
Follow the simple steps that have been discussed above and invest your hard earned money in stocks. If your planning and steps are in the right direction, there is no question of failure. So, plan first, invest your money and then gain profits from the market.
Sogotrade Interest Rates and Fees: trading stock options
Article Source: http://EzineArticles.com/?expert=Micheal_James
hat is called as intelligent trading? How professional traders always make profits in the stock market? What are the skills you need to have before you start investing in the market? There are several such questions that need to be answered in order to understand the functionality of trading. For first time investors, answers to these questions are really important. Well, take each question in detail and see the key answers:
The very first question asked above is: what is intelligent trading? Well, this is the most common question, but the answer is not as easy as it seems. Intelligent stock trading involves many things including good market knowledge, good market analysis and above all a good positive attitude. All these together form the base of intelligent trading. The very next question is closely related to the first question. Those who practice intelligent trading are always successful in the stock market. And if you talk about professionals, they are experienced traders and follow all the necessary steps that are required for successful trading.
Now, the basic question comes - what are the skills you need to have before you actually start investing in stocks? Well, this fundamental yet important question really plays a very crucial role. Without skills, you cannot make substantial profits in the market. Therefore, it is very important to first understand the market - learn all the basic terms that are readily being used in trading. Learn to read charts and stock quotes, learn about the trading processes, how it works and the tips that are involved in successful trading.
You can access a wealth of information on the company website. Read articles, news, reviews and other educational content on the web and educate yourself. You can also access charts and quotes - analyze the data and learn more about it. Once you are through, you can start trading right from your home, office or anywhere in the world. Thanks to the Internet world that has given a new vista to the investment industry.
It is important to mention that the most vital factor involved in trading is the buying and selling of stocks. All your market knowledge help you trade intelligently in the volatile market. If you want to trade intelligently, you need to analyze the market first. This is really important - analysis not only helps you understand the market, it allows you to get rid of the subtle risks that are involved in trading. Use analysis tools that are available online - analyze the data and make an intelligent strategy for buying and selling of stocks.
You should know when to buy and sell stocks in order to gain maximum profits. Target leading company shares and also some small-scale companies based on the growth structure and previous company records. You can also take some help from your online broker - he will definitely help you in the whole trading process. In addition, keep you abreast of the latest market news updates. And in any case if you want to discuss some issues - you can consult with online financial experts and discuss your issues in detail.
Follow the simple steps that have been discussed above and invest your hard earned money in stocks. If your planning and steps are in the right direction, there is no question of failure. So, plan first, invest your money and then gain profits from the market.
Sogotrade Interest Rates and Fees: trading stock options
Article Source: http://EzineArticles.com/?expert=Micheal_James
Friday, August 8, 2008
Stock Investing - How the Stock Market Works
By Louis Navellier
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.
Louis Navellier has earned a national reputation as a savvy stock picker and portfolio manager over the past 27 years. He writes four newsletters/trading services for individual investors, Emerging Growth, Blue Chip Growth, Quantum Growth and Global Growth. He informs readers where to invest, and delivers the latest in stock advice.
Article Source: http://EzineArticles.com/?expert=Louis_Navellier
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.
Louis Navellier has earned a national reputation as a savvy stock picker and portfolio manager over the past 27 years. He writes four newsletters/trading services for individual investors, Emerging Growth, Blue Chip Growth, Quantum Growth and Global Growth. He informs readers where to invest, and delivers the latest in stock advice.
Article Source: http://EzineArticles.com/?expert=Louis_Navellier
Thursday, August 7, 2008
13 Things You Should Never Do When Trading Stocks
By David Colletti
Never say never except in the following cases:
1. Never break your trading rules -
What ever rules you have, stick to them. Strict discipline is essential to preserving capital and to your overall success.
2. Never underestimate the importance of discipline -
Learning the basics of stock trading is the easy part. However, most traders fail in the stock market due to their lack of discipline, not their lack of knowledge.
3. Never trade without a plan -
Always remember the reasons you took the trade in the first place. Don't get shaken out by intra-day whipsaws or volatility if the stock chart still looks solid and price is above major support.
4. Never seek the Holy Grail -
There is no Holy Grail of trading. No matter how long you look, you won't find it. There is no secret formula to success in the stock market. The closest thing to the "Holy Grail" is disciplined risk management.
5. Never believe in a company -
The only thing that matters is revenue growth. Forget the press releases; they are designed to boost the stock price. Trust only the numbers and nothing else.
6. Never Trust the talking heads-
Ignore the so called 'Guru's' on TV and other media outlets. They have their own agenda and they certainly do not have your best interests in mind. Do your homework regardless of the information source. It's your money at stake, not theirs.
7. Never trust the market; it is not your friend-
The market doesn't owe you anything for all the hard work and study you have done to learn how it works. It only pays off when you just happen to be right, and your timing is perfect, whether it was luck or skill it makes no difference to the market.
8. Never trade to get even -
Every new trade is its own and must stand on its merit. Never trade with revenge in mind. Trading should never be a game of catch-up. If you have a loss, take it with the same composure you entered the trade with and take the next trade with discipline and emotional control.
9. Never ignore intuition -
Your intuition knows best most of the time, respect it. That's the voice of reason, the voice of a disciplined trader trying to get through your thick skull.
10. Never count your profits while in a trade -
Never count your profits before you close the trade. The market gives and it can take away just as fast.
11. Never hate to lose -
You must expect to win and lose. Nobody is perfect. Nobody wins every trade. Expecting to lose is a defensive disciplined style. If you are willing to cut your losses quickly then losing trades will be common. But they will be so small that it will not affect your bottom line because when you win, the winners should be much bigger if you let the winners run.
12. Never expect perfection-
If you see a service advertising "every trade is a winner" or "We haven't lost a trade in 6 months" These are gimmicks. A trade is not a winner or loser until it's closed. They may have 10 winning trades in a row that they've closed but they also may still have open losers that they have been underwater in for the past 6 months. Expect to win and lose with regularity. Expect the losing trades to teach you more about winning, than the winning trades will.
13. Never think of trading as entertainment -
Trading is a job or a business. You are in it to make a profit. Most of the time it should be like any other job; boring. The markets are rarely exciting, even when you are making money.
Copyright © 2008 StockTradersHQ.com
David CollettiFounderStockTradersHQ.comThe Headquarters for serious traders.
Copyright © 2008 StockTradersHQ.com
This article is courtesy of David Colletti, a ten year veteran stock trader and founder of StockTradershq.com. Our staff of professional technical traders analyze 1,000's of potential stocks every day to provide you with a list of stock recommendations nightly with the greatest potential for explosive gains. These stock picks are traded with our real-time portfolio. Email alerts are sent to members for every entry and exit. Our subscription service provides all the resources, stock picks and tools an investor needs to make very profitable, consistent trades while maximizing gains and minimizing losses. StockTradersHQ.com offers a 21 day free trial with full member access.
http://www.stocktradershq.com/
Article Source: http://EzineArticles.com/?expert=David_Colletti
Never say never except in the following cases:
1. Never break your trading rules -
What ever rules you have, stick to them. Strict discipline is essential to preserving capital and to your overall success.
2. Never underestimate the importance of discipline -
Learning the basics of stock trading is the easy part. However, most traders fail in the stock market due to their lack of discipline, not their lack of knowledge.
3. Never trade without a plan -
Always remember the reasons you took the trade in the first place. Don't get shaken out by intra-day whipsaws or volatility if the stock chart still looks solid and price is above major support.
4. Never seek the Holy Grail -
There is no Holy Grail of trading. No matter how long you look, you won't find it. There is no secret formula to success in the stock market. The closest thing to the "Holy Grail" is disciplined risk management.
5. Never believe in a company -
The only thing that matters is revenue growth. Forget the press releases; they are designed to boost the stock price. Trust only the numbers and nothing else.
6. Never Trust the talking heads-
Ignore the so called 'Guru's' on TV and other media outlets. They have their own agenda and they certainly do not have your best interests in mind. Do your homework regardless of the information source. It's your money at stake, not theirs.
7. Never trust the market; it is not your friend-
The market doesn't owe you anything for all the hard work and study you have done to learn how it works. It only pays off when you just happen to be right, and your timing is perfect, whether it was luck or skill it makes no difference to the market.
8. Never trade to get even -
Every new trade is its own and must stand on its merit. Never trade with revenge in mind. Trading should never be a game of catch-up. If you have a loss, take it with the same composure you entered the trade with and take the next trade with discipline and emotional control.
9. Never ignore intuition -
Your intuition knows best most of the time, respect it. That's the voice of reason, the voice of a disciplined trader trying to get through your thick skull.
10. Never count your profits while in a trade -
Never count your profits before you close the trade. The market gives and it can take away just as fast.
11. Never hate to lose -
You must expect to win and lose. Nobody is perfect. Nobody wins every trade. Expecting to lose is a defensive disciplined style. If you are willing to cut your losses quickly then losing trades will be common. But they will be so small that it will not affect your bottom line because when you win, the winners should be much bigger if you let the winners run.
12. Never expect perfection-
If you see a service advertising "every trade is a winner" or "We haven't lost a trade in 6 months" These are gimmicks. A trade is not a winner or loser until it's closed. They may have 10 winning trades in a row that they've closed but they also may still have open losers that they have been underwater in for the past 6 months. Expect to win and lose with regularity. Expect the losing trades to teach you more about winning, than the winning trades will.
13. Never think of trading as entertainment -
Trading is a job or a business. You are in it to make a profit. Most of the time it should be like any other job; boring. The markets are rarely exciting, even when you are making money.
Copyright © 2008 StockTradersHQ.com
David CollettiFounderStockTradersHQ.comThe Headquarters for serious traders.
Copyright © 2008 StockTradersHQ.com
This article is courtesy of David Colletti, a ten year veteran stock trader and founder of StockTradershq.com. Our staff of professional technical traders analyze 1,000's of potential stocks every day to provide you with a list of stock recommendations nightly with the greatest potential for explosive gains. These stock picks are traded with our real-time portfolio. Email alerts are sent to members for every entry and exit. Our subscription service provides all the resources, stock picks and tools an investor needs to make very profitable, consistent trades while maximizing gains and minimizing losses. StockTradersHQ.com offers a 21 day free trial with full member access.
http://www.stocktradershq.com/
Article Source: http://EzineArticles.com/?expert=David_Colletti
Wednesday, August 6, 2008
Stock Trading Mistakes to Avoid
By John Efetobor
Mistakes are great learning tools of life; we learn and grow by mistakes. Some of the aspects of life you have mastered today are accumulations of mistakes that you did not give up on, but do you know that one mistake in stock trading action or decision can be disastrous, it can incapacitate your portfolio and therefore it is very important you understand how to avoid these stock trading mistakes. Lets get started shall we?
1. Over dependence on Stockbrokers
Stockbrokers are a fantastic bunch of people; a good stock broking firm would be one that has a sound research department. Your stock broking firm is supposed to be your backbone in terms of stocks picks, but these days stock broking firms have abdicated this very important responsibility for personal gains. Therefore, you must take responsibility for decisions bordering on stock picks, when to buy and when to sell.
2. Depending on hype to buy a stock
Many stock investment journalists are bias in their write up concerning certain stocks in the capital market. They do this either because they have vested interest in such stocks or they are sponsored to write sensational articles in their columns in order to create artificial interest about a stock, therefore endeavor to carry out your research employing sound analyzing tools that are readily available to you on different platforms both online and offline.
3. Over dependence on overzealous share analyst
Once every now and then, you get compelling tips from your share analyst about a hot stock that has a sure fire prospect, ensure you do your own thorough investigation about that hot sure fire stock before calling your broker to buy; otherwise you will be courting trouble with eye open. No matter how hot a stock is; common sense reasoning should warn you to cross check your tip by considering information from several reliable sources.
4. Buying a rising stock without knowing the reason behind the rallying up
There are some investors that form the habit of watching daily trading activities in the pages of investment newspapers, observing stocks whose prices tends to be rising steadily, they get excited and take position by buying into such equities without knowing the force responsible for the upward pull. Understand that there are many reason why the price of a stock will rally up, ultimately there is a peak point where there will be a reversal of the price, if you don't understand it, it could be disastrous avoid it; you could end up in a mess.
Information is key when it comes to making awesome profits from the stock market, get practical, workable and sound information concerning every stock you are interested in. Weigh each stock in their own strength; it's not a difficult task if you know how to apply basic stock trading skills.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction
Article Source: http://EzineArticles.com/?expert=John_Efetobor
Mistakes are great learning tools of life; we learn and grow by mistakes. Some of the aspects of life you have mastered today are accumulations of mistakes that you did not give up on, but do you know that one mistake in stock trading action or decision can be disastrous, it can incapacitate your portfolio and therefore it is very important you understand how to avoid these stock trading mistakes. Lets get started shall we?
1. Over dependence on Stockbrokers
Stockbrokers are a fantastic bunch of people; a good stock broking firm would be one that has a sound research department. Your stock broking firm is supposed to be your backbone in terms of stocks picks, but these days stock broking firms have abdicated this very important responsibility for personal gains. Therefore, you must take responsibility for decisions bordering on stock picks, when to buy and when to sell.
2. Depending on hype to buy a stock
Many stock investment journalists are bias in their write up concerning certain stocks in the capital market. They do this either because they have vested interest in such stocks or they are sponsored to write sensational articles in their columns in order to create artificial interest about a stock, therefore endeavor to carry out your research employing sound analyzing tools that are readily available to you on different platforms both online and offline.
3. Over dependence on overzealous share analyst
Once every now and then, you get compelling tips from your share analyst about a hot stock that has a sure fire prospect, ensure you do your own thorough investigation about that hot sure fire stock before calling your broker to buy; otherwise you will be courting trouble with eye open. No matter how hot a stock is; common sense reasoning should warn you to cross check your tip by considering information from several reliable sources.
4. Buying a rising stock without knowing the reason behind the rallying up
There are some investors that form the habit of watching daily trading activities in the pages of investment newspapers, observing stocks whose prices tends to be rising steadily, they get excited and take position by buying into such equities without knowing the force responsible for the upward pull. Understand that there are many reason why the price of a stock will rally up, ultimately there is a peak point where there will be a reversal of the price, if you don't understand it, it could be disastrous avoid it; you could end up in a mess.
Information is key when it comes to making awesome profits from the stock market, get practical, workable and sound information concerning every stock you are interested in. Weigh each stock in their own strength; it's not a difficult task if you know how to apply basic stock trading skills.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction
Article Source: http://EzineArticles.com/?expert=John_Efetobor
Saturday, August 2, 2008
The Stock Trader's Mindset (2nd Part)
By Efetobor John
Every genuine stock trader I have encountered so far in my almost ten years of stock trading and analyzing of stocks all have one common denominator; they all believe that everything is possible in the capital market.
The mindset of a stock trader is a comprehensive description of the mindset, thought pattern, beliefs, heart beat, and approach to stock investments. The traditional stocks investor is averse to taking risk, plays safe, takes his time, is not knowledgeable of the undercurrents of equity investments, he is grossly ignorant of the dos and don'ts of stocks investment, he is a passive player in the very active terrain of the capital market. No wonder they make just 10% of the over 12 trillion naira that exchange hands daily in the capital market and they constitute about 90% of investors that lay claim to owning shares of companies.
Stock traders smile to the bank everyday with about 90% of the over 12 trillion naira that actively is changing hands in the capital market, they make just 10% of investors in the Nigerian Stocks Exchange. The stock trader as the name implies buys and sells stocks; the emphasis is on the word "TRADE" there is a constant exchange of stocks for money, it is his trade-mark.
- HE IS INTERESTED IN HIGH LIQUIDITY STOCKS
If you take a close look at the daily, weekly and monthly trading, you'll observe that it is the sector leaders that lead in volume of trade, they are the ones that command more patronage, their daily trade volumes is in millions. Now, this is very important to the stock trader for the sake of effective and unhindered trading.
Let me describe how this mindset works. High liquidity means high trade volume; stock traders Focuses on high volume stocks, therefore, he knows it is dangerous to buy into a company that does low trading volume, why? because when he wants to sell, it will be difficult to do so.
- HE CONSISTENTLY LOOKS FOR OPPORTUNITIES OF HOT STOCKS TO INVEST IN
The capital market is a beehive of investment opportunities for all investors to make fabulous returns. These opportunities come in different shape and sizes; also they come in different colorations, but it is the seasoned stock trader that is able to grasp them because he consistently looks out for them.
The stock trader knows the addresses of where to locate these openings, He goes to investment columns in daily newspapers, in investment newspapers, stock investment programs in Radio and Television, at seminar venues and stock investment websites.
- CONSISTENTLY EDUCATES HIMSELF.
Equity investment education is paramount to the stock trader, He knows acquiring stock trading understanding is non negotiable, he knows the knowledge of yesterday at best is good enough for today but certainly not for tomorrow.
You'll always find him at seminar grounds both paid and free, most stock traders do subscribe to top stocks newspapers, they are on the list of first-class stock investment newsletters on the internet like.
- HE IS ACTIVELY INVOLVED IN STOCK TRADING
Stocks' trading is a full-time vocation, so important that it cannot be left completely in the hands of a stock broker, which in my considered and humble opinion can be detrimental to your investment health.
Therefore, by the foregoing, the stocks trader is actively engaged in trading, it his passion, he derives a thrill from trading in hot stocks that sees him growing his portfolio to enviable heights.
Conclusive, it pays to cultivate the mindset of a stock trader. All over the world, the best performers in equity investment have been known to be stock traders.
Watch out for other incisive and impact articles.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction.
Article Source: http://EzineArticles.com/?expert=Efetobor_John
Every genuine stock trader I have encountered so far in my almost ten years of stock trading and analyzing of stocks all have one common denominator; they all believe that everything is possible in the capital market.
The mindset of a stock trader is a comprehensive description of the mindset, thought pattern, beliefs, heart beat, and approach to stock investments. The traditional stocks investor is averse to taking risk, plays safe, takes his time, is not knowledgeable of the undercurrents of equity investments, he is grossly ignorant of the dos and don'ts of stocks investment, he is a passive player in the very active terrain of the capital market. No wonder they make just 10% of the over 12 trillion naira that exchange hands daily in the capital market and they constitute about 90% of investors that lay claim to owning shares of companies.
Stock traders smile to the bank everyday with about 90% of the over 12 trillion naira that actively is changing hands in the capital market, they make just 10% of investors in the Nigerian Stocks Exchange. The stock trader as the name implies buys and sells stocks; the emphasis is on the word "TRADE" there is a constant exchange of stocks for money, it is his trade-mark.
- HE IS INTERESTED IN HIGH LIQUIDITY STOCKS
If you take a close look at the daily, weekly and monthly trading, you'll observe that it is the sector leaders that lead in volume of trade, they are the ones that command more patronage, their daily trade volumes is in millions. Now, this is very important to the stock trader for the sake of effective and unhindered trading.
Let me describe how this mindset works. High liquidity means high trade volume; stock traders Focuses on high volume stocks, therefore, he knows it is dangerous to buy into a company that does low trading volume, why? because when he wants to sell, it will be difficult to do so.
- HE CONSISTENTLY LOOKS FOR OPPORTUNITIES OF HOT STOCKS TO INVEST IN
The capital market is a beehive of investment opportunities for all investors to make fabulous returns. These opportunities come in different shape and sizes; also they come in different colorations, but it is the seasoned stock trader that is able to grasp them because he consistently looks out for them.
The stock trader knows the addresses of where to locate these openings, He goes to investment columns in daily newspapers, in investment newspapers, stock investment programs in Radio and Television, at seminar venues and stock investment websites.
- CONSISTENTLY EDUCATES HIMSELF.
Equity investment education is paramount to the stock trader, He knows acquiring stock trading understanding is non negotiable, he knows the knowledge of yesterday at best is good enough for today but certainly not for tomorrow.
You'll always find him at seminar grounds both paid and free, most stock traders do subscribe to top stocks newspapers, they are on the list of first-class stock investment newsletters on the internet like.
- HE IS ACTIVELY INVOLVED IN STOCK TRADING
Stocks' trading is a full-time vocation, so important that it cannot be left completely in the hands of a stock broker, which in my considered and humble opinion can be detrimental to your investment health.
Therefore, by the foregoing, the stocks trader is actively engaged in trading, it his passion, he derives a thrill from trading in hot stocks that sees him growing his portfolio to enviable heights.
Conclusive, it pays to cultivate the mindset of a stock trader. All over the world, the best performers in equity investment have been known to be stock traders.
Watch out for other incisive and impact articles.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction.
Article Source: http://EzineArticles.com/?expert=Efetobor_John
Friday, August 1, 2008
Stock Analysis Skills - Basic ABC Formula
By Efetobor John
The basic ABC formula is a strategy I consider very vital and fundamental to stocks analysis, this is because without it, you can't have a full grasp of what the capital market is all about. Stocks trading can be such an interesting endeavor if you can apply yourself to practical and common sense thinking.
As I write this article, there are about 265 companies listed on the floor of the Nigerian Stocks Exchange. These companies are further sub-listed into 33 sub sectors. Companies are sub-listed according to the services and products they offer. All this information's are very important when it comes to stocks analysis.
The first thing you have to take into consideration is to take a close look at all the 265 companies one after the other, seven vital research you must carry out includes 1. Find out what each company is doing. 2. Find out what period of the year each company will be most favored to do more business. 3. Find out sector leaders amongst the companies in every sector. 4. Find out what each sector is all about. 5. Find out which company commands the highest trade volume in each sector per time and why? 6. Find out the job descriptions of each sector. 7. Find out for instance if Government pumps money into a sector, which company will profit more. Let's take a closer look at these points:
1. Find out what each company is doing: Is it not surprising that people invest into a company without having a clue to what such a company is involved in terms of company location, what business they are involved in. In stocks analysis, this knowledge is very critical.
2. Find out what period of the year each company will be most favored to do more business. Most companies in the Nigerian Stocks Exchange do more business during specific periods of the year or are affected by certain seasonal events e.g. a sub sector like Building materials and construction will be most impacted during a period a heavy construction project like when the National Stadium was constructed in Abuja a few years ago.
3. Find out sector leaders amongst the companies in every sector. Do you know that in every sub sector, there are companies that enjoy more patronage in terms of business because of their leadership position e.g. in Agriculture sub sector Okomu Oil and Presco.
4. Find out what each sector is all about. The Nigerian Stock Exchange is sub listed into 33 sub sectors for clarity purpose, otherwise there will be conflict of business. You must understand what each sector is involved in, in terms of their business description, why? As you keep tabs on economic, social, religious, cultural and sporting events as to when they come up, you will easily decipher which sub sector and of course which particular company will benefit more from such events so that you can take position way ahead of others for you to maximize profits.
5. Find out which company commands the highest trade volume in each sector per time and why? If you take a close look at the daily trading patterns of the Nigerian Stock Exchange, you will observe that there are some companies that command superior volume of trade consistently over others. As an analyst, it is your duty to closely monitor these companies.
6. Find out the job descriptions of each sector. It is the responsibility of any stocks analyst to find out the production description of every company that is quoted on the exchange, in other words, it will be to your advantage talking about making millions from trading in stocks if you can take time to dig into the nature and scope of companies, especially the ones you have taking particular interest in. Why do you need to do that? When an opportunity that you'd ordinarily ignore knocks, you can easily apply it to the companies that it concerns because of the timeless knowledge of the job description understanding you already have.
7. Find out for instance if Government pumps money into a sector, which company will profit more. From time to time Government releases funds to different sectors, from experience I know that there're some companies that profit more; find them out.
STOCKS ANALYSIS SKILLS- INTRODUCTION
Every stock trader in the marketplace globally that I know, they all have just one objective- to make money. However, very few people are able to successfully make money in the long run. When the market is rallying up, almost every dick and harry makes money trading stocks. However when push comes to shove during the bearish season; they take along with them almost all the profits of unsuspecting investors.
Stock analysis is an art that requires skills . If a stock trader is not watching his emotional attachment to certain stocks, he'll definitely get his fingers, if not his life burnt. To avoid such mishaps, it is important that he imbibes every analyzing tools that are vitally necessary for his success. well in the art of analyzing and picking profitable stocks, one does not need a Harvard or Cambridge ability or knowledge to do well, all you need is four simple tools, what'll be extensively explained in other parts of subsequent articles of this series, What the average prospective stock investor needs are.
1. Common sense
2. A good sense of history
3. A good sense of arithmetic (arithmetic is the branch of mathematics that deals with subtraction and addition).
4. Sound trading skills.
How can one know which stocks will make profits in the stock market? How can you be sure that the stocks you are investing your money into will not burn your fingers? Such questions are tough to answer if you don't know your way through the uncertain road of stock's investment. To be at home with analyzing hot stocks that can crank fortunes into your bank account, you must be able to cultivate the ability to think straight; you must be disciplined when it comes to controlling your emotions, as a stock analyst of almost ten years standing, I've seen men destroyed because they couldn't separate their feelings from the reality that was starring them in the face.
Stocks analyzing discipline can be achieved with strict money management discipline. Every investor must be able to acquaint himself with basic stock analyzing tools like common sense, which enables you to be able to think rationally. This is intended to open the eyes of the investor to objective analysis to show him how to identify stocks for trading. How to subtract falsehood in terms of companies that don't have strong fundamentals and add up sound facts based on sound technical and fundamental realities, When an investor is not familiar with the performance of companies in the previous years, he can fall into the trap of repeating a sad history of loses. A good sense of past performance can save a stock trader from basing their investment on guesswork or flimsy rumours that holds no water.
Stocks' trading is believed to be risky by certain category of investors and such people are intimidated to go into trading, Risk no matter how risky it is, can be reduced to the barest minimum by knowledge, a sound knowledge of the dynamics of equity investment will be of life help to you ultimately.
You must understand that it is investor's sentiment that drives the prices of stocks. Your ability to know what is responsible for these sentiments, why investors respond to certain stocks the way they do is very critical to your analyzing skills.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction
Article Source: http://EzineArticles.com/?expert=Efetobor_John
The basic ABC formula is a strategy I consider very vital and fundamental to stocks analysis, this is because without it, you can't have a full grasp of what the capital market is all about. Stocks trading can be such an interesting endeavor if you can apply yourself to practical and common sense thinking.
As I write this article, there are about 265 companies listed on the floor of the Nigerian Stocks Exchange. These companies are further sub-listed into 33 sub sectors. Companies are sub-listed according to the services and products they offer. All this information's are very important when it comes to stocks analysis.
The first thing you have to take into consideration is to take a close look at all the 265 companies one after the other, seven vital research you must carry out includes 1. Find out what each company is doing. 2. Find out what period of the year each company will be most favored to do more business. 3. Find out sector leaders amongst the companies in every sector. 4. Find out what each sector is all about. 5. Find out which company commands the highest trade volume in each sector per time and why? 6. Find out the job descriptions of each sector. 7. Find out for instance if Government pumps money into a sector, which company will profit more. Let's take a closer look at these points:
1. Find out what each company is doing: Is it not surprising that people invest into a company without having a clue to what such a company is involved in terms of company location, what business they are involved in. In stocks analysis, this knowledge is very critical.
2. Find out what period of the year each company will be most favored to do more business. Most companies in the Nigerian Stocks Exchange do more business during specific periods of the year or are affected by certain seasonal events e.g. a sub sector like Building materials and construction will be most impacted during a period a heavy construction project like when the National Stadium was constructed in Abuja a few years ago.
3. Find out sector leaders amongst the companies in every sector. Do you know that in every sub sector, there are companies that enjoy more patronage in terms of business because of their leadership position e.g. in Agriculture sub sector Okomu Oil and Presco.
4. Find out what each sector is all about. The Nigerian Stock Exchange is sub listed into 33 sub sectors for clarity purpose, otherwise there will be conflict of business. You must understand what each sector is involved in, in terms of their business description, why? As you keep tabs on economic, social, religious, cultural and sporting events as to when they come up, you will easily decipher which sub sector and of course which particular company will benefit more from such events so that you can take position way ahead of others for you to maximize profits.
5. Find out which company commands the highest trade volume in each sector per time and why? If you take a close look at the daily trading patterns of the Nigerian Stock Exchange, you will observe that there are some companies that command superior volume of trade consistently over others. As an analyst, it is your duty to closely monitor these companies.
6. Find out the job descriptions of each sector. It is the responsibility of any stocks analyst to find out the production description of every company that is quoted on the exchange, in other words, it will be to your advantage talking about making millions from trading in stocks if you can take time to dig into the nature and scope of companies, especially the ones you have taking particular interest in. Why do you need to do that? When an opportunity that you'd ordinarily ignore knocks, you can easily apply it to the companies that it concerns because of the timeless knowledge of the job description understanding you already have.
7. Find out for instance if Government pumps money into a sector, which company will profit more. From time to time Government releases funds to different sectors, from experience I know that there're some companies that profit more; find them out.
STOCKS ANALYSIS SKILLS- INTRODUCTION
Every stock trader in the marketplace globally that I know, they all have just one objective- to make money. However, very few people are able to successfully make money in the long run. When the market is rallying up, almost every dick and harry makes money trading stocks. However when push comes to shove during the bearish season; they take along with them almost all the profits of unsuspecting investors.
Stock analysis is an art that requires skills . If a stock trader is not watching his emotional attachment to certain stocks, he'll definitely get his fingers, if not his life burnt. To avoid such mishaps, it is important that he imbibes every analyzing tools that are vitally necessary for his success. well in the art of analyzing and picking profitable stocks, one does not need a Harvard or Cambridge ability or knowledge to do well, all you need is four simple tools, what'll be extensively explained in other parts of subsequent articles of this series, What the average prospective stock investor needs are.
1. Common sense
2. A good sense of history
3. A good sense of arithmetic (arithmetic is the branch of mathematics that deals with subtraction and addition).
4. Sound trading skills.
How can one know which stocks will make profits in the stock market? How can you be sure that the stocks you are investing your money into will not burn your fingers? Such questions are tough to answer if you don't know your way through the uncertain road of stock's investment. To be at home with analyzing hot stocks that can crank fortunes into your bank account, you must be able to cultivate the ability to think straight; you must be disciplined when it comes to controlling your emotions, as a stock analyst of almost ten years standing, I've seen men destroyed because they couldn't separate their feelings from the reality that was starring them in the face.
Stocks analyzing discipline can be achieved with strict money management discipline. Every investor must be able to acquaint himself with basic stock analyzing tools like common sense, which enables you to be able to think rationally. This is intended to open the eyes of the investor to objective analysis to show him how to identify stocks for trading. How to subtract falsehood in terms of companies that don't have strong fundamentals and add up sound facts based on sound technical and fundamental realities, When an investor is not familiar with the performance of companies in the previous years, he can fall into the trap of repeating a sad history of loses. A good sense of past performance can save a stock trader from basing their investment on guesswork or flimsy rumours that holds no water.
Stocks' trading is believed to be risky by certain category of investors and such people are intimidated to go into trading, Risk no matter how risky it is, can be reduced to the barest minimum by knowledge, a sound knowledge of the dynamics of equity investment will be of life help to you ultimately.
You must understand that it is investor's sentiment that drives the prices of stocks. Your ability to know what is responsible for these sentiments, why investors respond to certain stocks the way they do is very critical to your analyzing skills.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction
Article Source: http://EzineArticles.com/?expert=Efetobor_John
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