When deciding which type of stock broker will work for you, there are many factors to consider. Some brokers have hidden fees, some will allow you to write checks on your account and some will not offer options trading. When it comes down to it, your trading style will be the determining factor, and you may find that you may have up to five different brokers. At the end of the day, you will find that you will either choose a full service broker, a discount broker, or a deep discount broker.  Discount brokers have excellent research resources available to investors and offer robust online capabilities. They are the middle-of-the-line brokers in that they are more expensive than deep discount brokers, but they are cheaper than full-service brokers.

Discount brokers do not offer any advice or research and they charge lower fees than full-service brokers. They transact trades with no added extras and they manage fewer products. They sometimes will offer online computer order entry services and they normally paid a fixed salary to execute trades in the stock market. Discount brokers are not paid commissions and they get their business by having lowest prices and the best service. They make their money by doing business in quantity and typically compete on price and on the dependability of their services.

Discount brokers execute stock and option trades and most can trade U.S. treasuries and bonds. They offer a wide array of trades services for those who generally require little hand-holding or advice.  Discount brokers are basically licensed to perform what it is that you tell them to do, within reason, of course. If you are looking to do your own research and make your own investing decisions, than a discount broker should be your choice.  If you are hesitant in your investment strategies, and are new to trading and investing, you may want to consider a full-service broker, until you are ready.

If you decide that going with a discount broker is the way to go, consider a few things first.  First of all, find out if there is a minimum opening deposit required and if so, how much is required.  You will also need to find out if there are any stock market trading tools or research tools available as well as the reputability of the broker. You will also need to find out if there will be any accounting fees associated with your account. Other questions you should ask your discount broker include finding out if there will be any fees for the transfer of assets out of your account or any fees for inactive account fees due to infrequent trading. Lastly, you want to find out if they offer 24-hour customer service, and what they typical wait is when calling in for assistance.

The utilization of a discount broker can be a good way for investors to participate in the stock market or in the bond market.  If you decide that stock trading with a discount broker is for you, be sure that you understand clearly what type of service you will require and select a broker that will best accommodate those services.

That leaves two alternatives. Either sit in cash while the market is going down or find the sectors that are acting bullish in spite of the general bearish direction of the market. Common sense dictates that it is better to invest with the general flow of the markets. Why fight against the current? Common sense can also be used when buying in a down market. Candlestick signals can easily find which sectors/stocks are showing strength when the rest of the market is selling off. Although profits should be greater in short positions in a down market, bullish signals in specific sectors reveal some very important information.

If a sector/industry is showing bullish signals when everything else is being sold, there is a compelling reason. Keep in mind, candlestick signals are formed by the cumulative knowledge of everybody that is buying and selling during a specific timeframe. This is very powerful information. Can a stock price show a bullish signal when it's sector is acting bearish and the market in general is acting bearish? Of course, there could be something bullish occurring to make that stock price move positive when its peers are being sold off. But that bullish move could also be short covering if it has been in a downtrend like the rest of its industry; a maverick move more than a reversal.

When a whole industry/sector is showing bullish signals, that has a different connotation. It has to be assumed that big money is coming into that sector. The probabilities improve by finding specific stocks in that sector that are also showing bullish signals. Simply stated, it is better to find strong candlestick buy signals in stocks were the whole sector is being bought. That is true whether in a bull market or a bear market. However, a sector showing bullish signals in a bear market provides much better clarity as to where the big money is parking their funds as they're coming out of other positions. Going back to the statement, candlestick signals are formed by the cumulative knowledge of everybody that is buying and selling during a specific timeframe makes a strong sector in a bear market a more compelling place to invest. The strength of the sector becomes more obvious. If the sentiment in the markets is bearish, yet investment funds are moving to a specific sector, the reasons/fundamentals of that sector must be quite compelling.

Utilizing the advantage of candlestick signals to scan for bullish sectors in a bear market is extremely easy. Currently the solar energy stocks are showing great strength despite the harsh selling in the markets for the past two weeks. Is the fact that crude oil may be pushing $100 a barrel a factor? Probably! Another major component should be the advancement of technology over the past decade. Recent technology developments have dramatically improved the conversion of sunlight into energy. Would you, as an individual investor or even a money manager, have the time or capability to research each industry to take advantage of new developments? Probably not, unless you have mega-dollars to put into research. The advantage candlestick signals provide is pinpointing where the investment dollars are being committed. It has to be assumed that the big dollar investors have done the research and discovered which areas to be committing funds. Candlestick analysis takes advantage of everybody else's knowledge/research of what is going on in the markets/sectors.

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An easy practice to confirm that a sector is being bought extensively is to look at the other sector stock charts. If they are all acting well, it can be assumed the whole sector is picking up strength. This is not a high-tech process.

The duel advantage of the candlestick signals is added not only identifies where investment funds are moving to but also when. Utilizing candlestick signals and patterns allows you to take advantage of the proper timing for getting into profitable positions. The 12 major signals work just as effectively on a sector scan as they do on individual stocks scan. Click here for the Candlestick Forum 12 major signals training CDs special.

Being in positions that are moving positive when the rest of the markets are selling off is a very comforting feeling. Strong stocks in strong sectors already have implied strength built into them. Will they always go up on a big sell-off day in the market? Not always, but it is not unusual to have stocks in a strong sector still moving up in a big down market or at worst they are only down slightly when most other stocks have sold off hard. This is not rocket science. This is just the inherent nature of what investor sentiment is doing. Take advantage of the information that is built into candlestick signals. You will sleep much better at night.

Market direction - The fear factor is the predominant feature of this market over the past couple weeks. One or two weeks of a bullish trend can be wiped out in one day when everybody starts pulling the plug. Fortunately, we have been heavily in a cash position for the past two weeks. This does not come about by any great futuristic insights. This is a function of the mechanical stops that are applied using candlestick signals. Applying stop losses at the obvious spots in an individual stock price, as well as confirming levels of the market indexes in general, initially took us out of positions with profits. The establishment of new positions during these choppy markets was minimized with buy signals not being confirmed on the open or newly established positions being closed out the same day when they did not move in the manner that would have confirmed the buy signals. Obviously the establishment of short positions has worked out well. There will be times in the markets when the non confirmation of candlestick buy signals keep your portfolio in cash.

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When there is no definite direction being established in the markets, being nimble becomes the advice put out in the morning and afternoon comments. The purpose of investing is putting probabilities in your favor. When candlestick signals and patterns can not be identified, stay out of the market for little bit. The advantage candlestick signals provide is showing the direction of a trend with a high probability projection. When that is not occurring, sit back. Have the money ready to go when the signals do start showing high probability situations.

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