Candlestick Trading Blog: September 2007

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

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

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

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

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

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

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

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

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