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Brokerage

What is a brokerage firm?
An investor will look for this type of firm in order to set up their investment portfolio. This type of firm allows investors to purchase stocks and bonds, mutual funds, and other types of investments once the investor opens up an account with the firm. The firm is employed by professional brokers who buy and sell these items based on how you tell them to. It is the firmís responsibility to at as an intermediary between the purchaser and the seller and your individual broker makes these changes on your behalf. These are firms that are most commonly thought of as it relates to the stock market and the buying and selling of stock. Continue to read below to find out the different types of brokers that are available at these firms, as well as the minimum requirements when opening up and account with these firms.

Which type of broker do I select?
After you open up an account with the firm you have selected, you then must decide which type of broker you will utilize. There are two main types of brokers including the full-service which is considered the more traditional type of broker, or the discount broker. The full service broker is your personal stock broker that will offer you investment ideas, update you on how your investments are doing, and provide you with reports regarding your investments. The services they provide are many and the commission reflects that. You will pay a higher commission with full-service brokers than with discount brokers, but you will receive a lot more services. Those new to investing might opt to go with a full-service broker.

The discount broker is for more experienced investors or for those that have the time and dedication to do more research on their own. Discount brokers do not offer investment advice and are simply there to execute orders on your behalf. Most of them are online discount brokers, or in the event you do need to speak with somebody you will speak with the first available broker. You are most likely not assigned your own personal broker. Additionally, you are charged per transaction with this type of investment broker so be sure you clearly understand those fees. This is the most popular type of broker for those who practice online trading.

What does it take to open account with a brokerage firm?
This will vary from firm to firm but typically the minimum opening balance is as low as $1,000, with some firms offering balances as low as $500. Just be sure that you understand the penalties involved in the event your account falls below the minimum opening. Some firms will charge a maintenance fee if your balance falls below a certain dollar amount and these fees can really hurt you.

Conclusion
Deciding which firm you will utilize is one of the most important decisions you will make when you begin to invest money. Do your research, ask other investors for referrals, and understand the fees very clearly that you are expected to pay.


Market Direction: What makes a trading program viable? Have you often wondered whether it is worth spending the money to see if it's the hype behind a promotion of a trading program is true or not? Have you often wondered why somebody was willing to sell you the "secrets" of a new discovered trading program? There is one simple truism on Wall Street. If something works, everybody knows about it very quickly. If that is the case, wouldn't it be true that one of these newly discovered trading programs would be touted by word of mouth if they worked as they say they did? Things that work in investing will become known without promotions. That is why everybody is familiar with candlestick signals. They are still around. People are making very good money using candlestick signals. Why isn't everybody making huge profits with candlestick analysis? Because everybody has not learned how to use them correctly.

What makes a trading program viable? A truly effective trading method requires one simple aspect. It should work in all market conditions. Candlestick analysis has that feature. It does not rely upon specific market conditions for it to work correctly. The elements that make candlestick analysis work in all market conditions is one universal factor, human emotions. It does not rely on formulas. It does not rely on extensive technical analysis knowledge. It is merely the visual interpretation of what occurs in investor psyche during all aspects of market trends. Why is today's newsletter referring back to the basics of candlesticks? Because the results of the signals produce profits in all market conditions. Furthermore, candlestick analysis makes for a much more clear interpretation of those market conditions. It is easier to project which direction the market, in general, is moving using candlestick signals. With that knowledge, finding the high profit stocks/sectors are much easier to evaluate knowing which direction the market is moving.

The Candlestick Forum tries to maintain an educational point of view when demonstrating the effectiveness of candlesticks. The signals dramatically reduce the amount of emotions involved with investment decisions. The market conditions, during the past few months, have invoked much more emotional response from members of the  Candlestick Forum website. This indicates the manner in which the information is being conveyed apparently has been too mild-mannered. There should not be emotional trauma when utilizing candlestick signals. The utilization of candlesticks should show what is occurring in the market trend. The emotional trauma is the result of expecting and hoping for market results. Candlestick analysis eliminates that trauma if you are using the information correctly. Knowing what the market is doing allows investors to partake in profits produced by what the market is doing. Investors that lose money consistently are those that are waiting for the market to do what they are expecting it to do.

Having the ability to analyze what is going on in investor sentiment based upon the signals allows for huge profits to be made, no matter what the market conditions. Huge profits were made at the bottom of the downtrend back in early October. The Dumpling Top prepared for a strong downtrend. This downtrend was profited by being shorting positions  or owning the short funds. Knowing the simple rules of the signals and how they are formed at the bottom of the trend created  very profitable trading situations. Trades that produced 40%, 60%, and 80% returns in the matter of two or three days. Since early October, the markets have basically traded sideways. However, witnessing strong candlestick signals in specific stocks/sectors have also produced huge profits.

DOW

The past two weeks have basically seen a sideways moving market. Candlestick signals have identified strong buy patterns in a number of stocks. This may be the result of the baby being thrown out with the bathwater. Hedge fund liquidations have been selling the good positions along with bad positions. This has created the opportunity to buy oversold positions that demonstrated the potential of a strong rebound. Recent recommendations in the Candlestick Forum members area have produced profits in the 50%, 75%, and 100% gains over the past two or three weeks. There have been an inordinately high number of recommendations that have produced very large profits. This is not being stated for the cause of tooting one's horn. This is to illustrate the effectiveness of candlestick signals. Although the market is up over the past couple weeks, it did not move in a manner that would be conducive for most trading programs. However, candlestick signals revealed where the strength was coming into specific stocks and sectors. Effectively analyzing which signals were about to produce strong upside potential also showed which stocks were maintaining that strength through some strong market whipsaw action.

The Candlestick Forum maintains a very low key style for recommending stock positions. The major purpose of the site is to educate investors on how to use the signals correctly. Unfortunately, the profitable results gets lost when it is not touted with the enthusiasm seen from other investment websites. It is not unusual for the recommendations put out by the Candlestick Forum to show an extremely high percentage of the recommendations showing good profits. Along with those recommendations, there will be a good number of positions that are producing well above average returns.

WRI for example, was recommended as a buy anywhere from $8.50 to $11.50, based upon the evidence of buying and its dividend payout. At $8.50, the $2.10 annual dividend provided a 24.7% yield. At $11.50, the dividend yielded 18.2%. This recommendation  was for a longer-term more conservative investment account. Today it closed at $18.65, up 62% to 119% over the past two weeks, based upon where it was bought. There are other recommendations in the portfolio with comparable returns. Does this mean candlestick signals always creates these type of returns? Definitely not, however it dramatically improves the likelihood of being in one of these positions when the big returns do occur.

MTZ - another recent recommendation

Please utilize the information on the Candlestick Forum for your benefit. The stock picks are not for the purpose of making you wealthy. The daily videos of the pics and the follow-ups will educate you on what to look for and how to interpret the signals correctly. This is something that can easily be learned. Once you know this information, you can control your own investment returns for the rest of your life.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum Team


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