Candlestick Trading Blog
May 31, 2008
Forex Charts
Trading in the forex markets requires the ability to trade using forex charts. They are also known as price charts and can include line graphs, bar graphs and candlestick graphs. The purpose of using charts when forex trading is to see certain prices during a specified time frame. The time frame can range from minutes to years and anytime in between. There are also point-and-figure charts that track value instead of time intervals. In today’s article we will discuss all types of charts available including line charts, bar charts, candlestick charts, and point-and-figure charts. Line charts contain a very broad overview of price movement showing only the closing price for a specified time interval and they are the simplest to use. Forex charts of this nature make it easier when analyzing chart pattern reversals and trends, but they don’t provide as much detail as a bar chart or Japanese candlestick chart. Bar charts can be more difficult to read but it is pretty easy to tell if the price rose or fell. With a bar chart the length of a line displays the price spread during that time interval and it allows you to see the price variation. The larger the bar in this chart the greater the price difference between the high and low price during a specified interval. To sum it up, bar charts are price bars that are a linear representation of a period of time. They allow the user to see a graphic representation that summarizes the activity of a specific time frame. They are more commonly used when fx trading in addition to candlestick charts. Candlestick charts, also know as Japanese candlesticks, are used to represent the same information as price bars in bar charts. These forex charts are only different in that the open and close form the body of a box which is displayed with a color inside. Candlesticks were originally developed Point-and-figure charts are charts that follow the changes in prices and not the changes in time. In the stock charts described above, the comparisons are made between the price as it varies between time intervals. The point-and-figure charts are different because any column form this type of chart can represent any amount of time. These forex charts have no set amount of time for each figure and movements take place only when the minimum determined price moves. If the value does not change, then there are no new marking that appear on the chart. Trading forex is a very popular method of trading these days, but you must learn how to read forex charts in order to be successful. Now that you know a little bit about each type of chart available, do your own research to determine the investing strategy that works best for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 9:35 AM
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May 26, 2008
Investment Manager
Investment managers are professional managers of an individual or of a company’s financial assets. Their job is to make investments on behalf of people, institutions, or pension funds by assessing each client’s individual needs and investment risk profile. Investment managers perform asset management or investment management, depending on who they are representing, but they basically do the same thing. Investment firms are paid to perform asset allocation in attempts to outperform specific benchmarks. They perform asset allocation by understanding the different asset classes available and then by allocating funds among these assets. Managed investment funds are designed to offer the potential for high returns and portfolio diversification. While investment management has existed since the early 1900’s, it really grew from the Social Security solvency issues in the 1970’s. Due to increased attention to retirement planning, the Employment Retirement Income Security Act (ERISA) was passed to create 401k private retirement plans. It was then that investment managers began to specialize in managing money for institutions and individuals. Investment managers assist institutions and individuals in diversifying their portfolios. Effective diversification requires portfolio management. It is through this process that each manager looks at the degree of diversification that makes sense for a given client, and they then develop a list of planned holdings in accordance with the degree of diversification. This list is used to determine the percentage of each fund that should be invested in each stock or bond. There are benefits to utilizing an investment manager to help manager your investment options. The most important benefit it that they assist investors in investing in areas in which they would never have thought about themselves. Perhaps the greatest advantage is that it also provides a sense of comfort to the investor to know that their funds are being handled by a professional. Investment managers have really good contacts with people outside of their firm which can provide them access to more information and potential investment ideas. This can help them to make timely decisions as well for the investor who otherwise may not have the knowledge. You have to of course trust this professional and therefore must do your own research to ensure that you are happy with the investment firm you have chosen. There are many ways you can do this. You can look to fellow investors for referrals, join investment clubs, or join online forums to gain feedback from a larger group of people. They may be able to point you in the right direction when choosing an investment manager. You must however, make the final determination. When selecting an investment manager there are certain things that you should look for and there are certain things that you should avoid. You should look for independent investment management firms because they have fewer conflicts of interest. You should look for portfolio managers that are accessible. This will come in handy when the financial markets are volatile. You also want to choose a firm that in conservative in their investing strategy. Excessive risk taking can have a negative impact on your portfolio. Some things to avoid when choosing an investment manager are those investment advisobrs with little academic and analytical experience. You should also stay away from accountants who offer investment services. They tend to have a somewhat limited investment experience. Lastly you should stay away from any investment manager who guarantees you a return on investment. There are no guarantees! Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 10:49 AM
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May 23, 2008
Forex Online Training
For those interested in learning how to trade forex, it is very important that you receive some sort of forex online training. Through taking a class you will learn about what forex trading is, many terms regarding forex, as well as facts regarding the forex markets. Forex is very distinctive in nature due to the fact that traders are buying and selling money at the very same time. Trades are done in pairs and the forex market is the largest market in the world. An average of $1.9 trillion trades are completed daily and the turnover rates are close to 30 times larger than the total volume of equity trades in the When taking forex online training you will come across many terms such as the ask price (offer), the bid price, the bid/ask spread, the end of day order (EOD), pips, limit orders and stop-loss orders. In today’s article we will provide a definition for each of these terms however, there are many more that you will learn through forex online training. Ask (Offer) Price – This is the price at which the market is prepared to sell a specific currency in a foreign exchange contract and the price at which the trader can buy the base forex currency. Bid Price – At this price the trader can sell the base currency and it is the price at which the market is prepared to buy a specific currency. Bid/Ask Price – Forex online training will teach you that this is the difference between the bid and offer price when foreign exchange trading. End of Day Order (EOD) – This is an order to buy or sell at a specified price. This order remains open until the end of the trading day. Limit order – This is an order that has restrictions on the maximum price that is to be paid or the minimum price to be received when trading currency. Pips – This term is one of the first things that you will learn through forex online training and is the smallest unit of price for any foreign currency. Stop Loss Order – This order happens when an open position is automatically liquidated at a specified price. It is often used to minimize exposure to losses if the market where to move against a forex investor’s position. Forex online training will also teach you about the history of forex such as the fact that it is relatively new. It was only made available for the public to trade in 1998. Before that trading forex was only done by banks, large corporations, and major currency dealers. It is true that large international banks are still the major traders in the foreign currency exchange, however, it is now offered in smaller portions to individual forex traders. Not only must you partake in forex online training, you must also come up with a trading plan, and figure out which forex trading platform you would like to use. There are many that you can find online but you should also ask around to your fellow forex investors through joining online forums, or investment clubs. Forex online training is only the beginning to a long educational process that if taken seriously and done correctly can provide investors with access to great wealth. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 3:13 PM
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May 20, 2008
Best Mutual Funds
How to Pick the Best Mutual Funds When deciding the right mutual funds to invest in there are a laundry list of items to consider. You will want to look at things such as the history and performance of the fund, obviously, the financial condition, expenses, investment strategies, policies, goals and the allowed investments. Where can you find all of this information? To pick the best mutual funds, you must read and study the fund’s prospectus. It will tell you everything you need to know when deciding on the funds you want to add to your investment portfolio. The prospectus is required by the SEC and it must be updated and available to investors annually. The prospectus will assist you to pick the best mutual funds by focusing mostly on three areas of interest. These areas of interest, when investing in mutual funds, include the performance of the investment funds over the last ten years, the average annual return, and the fees and expenses associated with a particular fund. The prospectus shows each fund’s performance as compared to the industry benchmark and tells you how much its value has increased or decreased each year, again as far back as ten years. The average annual return, is also an important piece when mutual fund investing because it prevents funds from only reporting their good years. This way they cannot ignore bad past performance, allowing the investor to make a well-informed decision and pick the best mutual funds. The last of the three areas of interest includes the fees and expenses of each fund. This tells each investor whether or not the fund is a no-load mutual fund. When buying shares in what you consider to be the best mutual funds, you must understand the difference between “no-load” and “load mutual funds”. No-load funds contain no sales fee or commission, or a pretty small fee. Load funds do contain a sales free or commission upon purchase and they are often sold by an investment broker at a firm or bank. Before investing in mutual funds it is imperative that you understand which type of fund you are buying in order to prevent any surprising fees. Most professionals should tell you to invest in no-load funds because sales charges of the load funds reduce your return on investment. Now that you have picked the best mutual funds to invest in, take note on the two ways that you can now invest in them. You can either invest the total minimum amount required at one time, or you can transfer pre-set amounts directly from your bank account on a set schedule. Either way is perfectly fine, but keep in mind that when you set up automatic payments, you get the best dollar cost averaging. It helps you take advantage of the condition of the open market, no matter the conditions, and it really is seen as the best option by many investors. There is an abundance of information that you should know when determining which mutual funds to add to your portfolio. Mutual funds in general provide portfolio diversification and are seen as many investors as a must to successful investing. Read yesterday’s article “What are Mutual Funds” for additional information on how you can invest in today’s top mutual funds. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 11:50 AM
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May 16, 2008
Online Investing Education
Invest in Yourself First Through an Online Investing Education If you are new to online investing and want to learn how you can make money through the use of the internet, you must first invest in yourself through acquiring an online investing education. Maybe you already have online investments but you are losing money instead of making money? If this is the case, then you may need to take a step back and revaluate your investing strategy or your trading methods. Whatever the case may be, you must ensure that you receive the proper investing education and that you continue to educate yourself so that you are on top of new trends and new information that may potentially change the way you invest. It doesn’t matter if you are day trading, forex trading, or investing in mutual funds, you must have the proper education and training. You can find a lot of information on the internet to help get you started. Due to the vast number of vendors available on the internet, there are many vendors who offer free online training or free demos of the investment software that you may be interested in using. Other vendors offer an online investing education for a course fee providing you with software that you can install and download. This is typically offered to those investors who are interested in learning to trade stock via a trading platform. It may also work the other way around in which you research and find an online stock trading software that you want to buy. Perhaps it was recommended to you by a peer and then you take the training associated with that software. Just be sure that whatever system you decide to use that you research, review a few vendors, and get advice from your peers or and investing mentor. Another route that investors can take in order to acquire an online investing education is to join online investing forums that pertain to their type of investing. Through the use of online forums, investors can interact with a large of number of people who can potentially provide expert opinions about the different investment options. They can also possibly interact with experts themselves in their specified niche of investing, who can teach about fundamental and technical analysis in relation to the stock market, for instance. Another benefit of online forums, in relation to providing an online investing education, is that members can post questions to discussion boards. They are then able to read multiple answers given by different members and then act accordingly. Another reason that online forums are useful is that you can obtain relatively unbiased information, as opposed to going through a stock brokerage source. In the past you had to solicit the services of a stock broker and he or she would do your investing for you. With the advent of the internet, online investing has taken on an entirely new face. You no longer have to put your money in the hands of someone else, but now are faced with the reality that you have to know more about investing. With that in mind, it is imperative that you invest in yourself through obtaining an online investing education. Some of the courses available to you are not cheap, but the cost is minimal when compared to how much you could potentially lose with out the proper education and training. The best investment advice one can give is to invest in yourself to ensure your success. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 10:41 AM
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May 13, 2008
Forex Trading Platform
Now that you know how to trade forex and are comfortable with the forex markets, you must decide on a forex trading platform to use. Having a great foreign exchange trading platform and understanding how to use it can produce a significant difference in your profit margin. These trading platforms are software through which online forex brokers and investors perform their daily forex trading. They can do this from anywhere is the world and the idea is to choose a platform that will assist the investor to execute trades the most effectively maximize returns. How to you pick the best platform? First of all, the best platform should be profitable in relation to your trading style. You must see a demo of each platform that you are interested in and then you must review every inch of it. This will assist you in determining which forex trading system will work best with your trading plan. The second thing you must establish is what profit you expect to gain over a specific period of time by using the forex trading platform you choose. There are formulas that can assist with this second piece that will give you the average profit per trade. Other things that a good trading platform should offer include the following: • Position monitoring and real time margin Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 6:07 PM
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May 9, 2008
Investment Software
Investment Software When Forex Trading Forex trading is becoming increasingly popular among investors as it provides an alternative method to achieving financial security. Investment software is a must for investors looking into fx trading so that they are able to trade their money through a demo account and eventually an active account. The type of software needed to trade forex includes a computer application that coordinates all of the currencies available to trade in the world market. It is available 24-hours a day and it can be done from anywhere you can get an internet connection. When deciding which forex software you should use there are a few resources that you can utilize. You can reach out to a forex broker or a dealer to get recommendations, or you can ask your fellow forex investors. You can also of course research different types of investment software online. Your fellow investors should be able to not only offer recommendations, but they should also be able to tell you the trading software to stay away from. If you prefer to search the net, try out software packages that offer free downloads for you to sample before making a final decision. Keep in mind when deciding which type of investment software you would like to use, that the main difference between them is the platform. Some platforms are client-based while others are web-based. Either kind of platform will work for forex traders but each also has their advantages and disadvantages. For instance, client-based software is only available for use where you work or at home, but you are less susceptible to viruses. With web-based investment software, you are more prone to viruses, but you can trade the forex markets from anywhere you would like. Also, when forex day trading, investors must keep in mind that you may get information when it is too late to take action. This is often due to the issues that your trading company may have with their servers because of a virus or other technical problems. Considering the above issues it is very important that you not only choose a forex investment software that you like, but you must also research the quality of customer service that the company provides, the quality of the trading software itself, and the quality of the company in general. You also must ensure that the forex company you are utilizing offers an online trading course that meets your needs. The systems are very complex and the system that you choose should offer many tools including charts and technical analysis tools. You should also have someone on point that you can speak with in the event you have an issue or a question when completing the course. Lastly, one you have decided on the investment software to utilize when trading forex, open up a demo account. This account will allow you to trade just as you normally would, but not with real money. Once you have practiced enough and you understand the trading software and the forex markets, you are ready to begin trading with real money! Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 3:25 PM
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May 6, 2008
Market Analysis
Why market analysis should be your first step for deciding your stock portfolio allocation. Many, but certainly not all, stocks will move with the market. For this reason alone it is well worth your time to perform your own analysis, and more specifically the analysis required to determine a bull or bear market. The old adage of ‘running with the trend’ translates into ‘don’t fish upstream’. Making money in the markets is challenging enough without going against the crowd. Market analysis does not need to be overly complicated. The main goal is to become comfortable with your personal analysis until you can recognize when a change is coming. One example for a quick analysis could be the evaluation of Volume and Price. A general observation can be easily made when witnessing a spike in volume; which indicates a larger than normal number of buyers/sellers. We all know that Price tells you which direction the buyers/sellers are going. There are several websites which provide a plethora of free stock market analysis tools. Market analysis requires common sense (which is not so common). Simply stated; nothing goes up or down in a straight line. As you become more comfortable doing your own analysis you will appreciate the differences between healthy ‘profit taking’ and severe ‘sell offs’. Candlestick charts provide a huge advantage in your market analysis. Unlike bar charts, which tell you what price movements did during a specific timeframe, candlestick charts unfold secrets before your very eyes by telling you the investor sentiment and what to expect in the future. Market analysis with candlestick signals can be done by only learning 12 Major Candlestick Signals. Determine the overall trend by viewing the DOW and the NASDAQ. Let the market tell you what the market is doing. The same analysis used for individual stocks can be applied to the market indexes in general. There is a wealth of free information available over the internet to assist you in your analysis of the markets. (Everyone wants to know which way the market will go) This is why we choose Candlestick Signals and Candlestick Charting for this type of analysis. Even the most basic of candlestick charting methods provides its user with a valuable technical analysis tool giving you a head start on other traders. (Read more in our article ‘Market Analysis Systems - Seeing the Market Move; or ‘Market trend analysis with candlestick signals’) If all of this talk about market analysis has confused you, may I suggest you join us on Thursday evenings for our free live stock chat sessions. Additionally, you may wish to review Stephen Bigalow’s personal CD on Trend Analysis; a 90-minute training video outlining the steps Steve personally uses each evening to perform his own analysis. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 2:48 PM
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May 2, 2008
Buy Gold
Should you Buy Gold? Investors interested in investing in gold must first understand what gold funds are. When an investor wants to purchase gold, he or she can purchase it in units at a set gold price and the profit/loss of the investment is reflected in the movement of the unit price. Investors may purchase gold funds in the form of mutual funds or exchange traded funds (ETF). This form of gold investing is popular with the business people who do not want to spend time figuring out where they will store physical gold coins or bars after they buy gold. Mutual fund investing includes a group of investors who pool their money together and a fund manager directs that money to invest in various investment vehicles such as stocks and bonds, money market accounts, or other securities. Those investors who have pooled their money make capital gains and collect the dividend or interest income. For those investors who want to buy gold funds, they can also invest in and ETF, as mentioned above. A gold investment such as an ETF takes place when an individual invests in gold, but does not invest money into a pool with other investors. Instead the money is invested individually and the ETF investor is actually buying and amount of gold which is represented in an account. Additional ways to buy gold include the purchase of gold coins, gold bars or bullions, gold in escrow (digital gold), investing in gold producers (miners), and even gold futures. Those that invest in gold coins or bullion bars have the advantage that gold value tends to remain stable or increase over time, and you own it physically. The downside to this type of gold investing is that if you have a lot of gold, it can be hard to transport it, unlike gold stocks of course! Also unless you ship it from another company, it is heavy and hard to get through customs. Small coins of course are not hard to transport, they are very easy to sell and they attract less tax problems. Gold bullion and gold coins are perhaps the most popular with gold collectors and investors. Traditionally in circumstances such as high inflation, or currency inflation, investing in gold offer investors safety and security. Historically, the gold markets have provided the best protection against financial disaster and instability in the economy. The way this works is that in the event of a financial catastrophe, paper assets would be converted into gold. This explains why some investors just skip a step and buy gold bars or gold coins. It is interesting to note that when you have only paper in your investment portfolio, gold tends to move in the opposite direction of those paper investments. Troubled times typically increase the amount invested in gold. Investors opt for long-term protection of their portfolio through buying and investing in gold. These days, people continue to buy gold to protect their strong portfolio from a currency crisis, inflation, or recession, while gold investing should be based on macroeconomic consideration and the investment atmosphere. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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posted by Stephen W. Bigalow at 10:04 AM
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