Candlestick Trading Blog: May 2009

May 29, 2009

Trading After Hours

Trading after hours became popular along with the rise of online investing in the late 1990's. The majority of stock trading takes place during the day from 9:30 a.m. to 4:00 p.m. on the major stock exchanges. Trading before and after market hours became available to those high-net worth investors, and it also became available to major institutional players. Initially, stock investors were only able to buy and sell stocks during the regular business hours of major stock exchanges. Trading after hours became easier and more accessible with the advent of electronic trading and electronic communications networks, also known as ECNs. Basically, any investors who can make the necessary arrangements to trade via an ECN have the ability to trade stock after hours. There are of course some requirements to practice electronic trading. For example, you must be a customer of a brokerage firm that has access to an ECN or that has one of its own. Keep in mind that some electronic communications networks are unregulated, some are regulated and some are sidelines of broker-dealers. Make sure you know this before you sign up with a brokerage firm. There are of course risks associated with trading after hours just as there are risks associated with trading stock during regular hours. For starters, there is less liquidity. There are fewer investors participating and there are fewer investors available to react to news and other sources of information regarding public companies. Other risks include those associated with limit orders and the execution of stock orders. Those investors who are unfamiliar with limit orders find it difficult in the ECN market and sometimes the market centers that your orders interact with may not include all of the possible execution venues. This means that your order may not be executed at the most favorable stock price available across all possible venues, therefore limiting those prices available among all possible market participants. There also is a possibility that your order may not be executed at all. Due to this, it is highly recommended that only seasoned investors participate in after hours stock trading. The costs associated with trading after hours include more than just the regular commissions. The lack of liquidity mentioned previously, can make it more difficult for you to get the price that you want when online trading after hours. There are also severe price swings that take place when after hours trading and there is limited information regarding price quotes. Trading stock after hours is still a great way to make money investing in stock. Continue to learn more about it and find out if it is an option for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 26, 2009

Brokerage Firms

Brokerage firms are many and there is a lot of information that you should be aware of before choosing a firm. Before you can begin investing or trading stock, you have to have a brokerage account. This is one of the most important decisions that you will make before you begin to invest your hard earned money. In today's article we discuss some information that should help you decide the type of stock broker you should use. First you must understand that there are two main types of brokers to choose from. You can go with the more traditional type of broker, also known as the full service broker, or you can go with an online broker such as a discount broker. Full service brokers are more expensive than discount brokers and they offer more services. They will give you investment advice, prepare reports about your stock portfolio, and will update your on the status of your investments. Of course, those brokerage firms offering the services of a more traditional broker have higher commission fees due to their higher level of service. Discount brokers are more for the independent investor who does most of the work themselves and who can devote the time necessary to do this. They are often online discount brokers and they do not offer investment ideas or investment advice. They simply execute orders for you on your behalf and you don't necessarily have a dedicated broker that you are guaranteed to work with. Most of your trades are done online so if an investor does call in, he or she will most likely get the first broker available. This is an option that works great when short term stock trading since you need access to online trading quickly and repeatedly throughout the day. There are many brokerage firms out there that offer this service. Since the discount broker offers fewer services than the full service broker, their fees are less. Both types of brokers charge per transaction however the fee for discount brokers per transactions is significantly lower. In addition to selecting the type of trading broker you will use, you also need to understand that there is a minimum balance required to open a trading account as well as maintenance fees. The minimum balance required to open an account varies from around $500 to around $1,000 or $2,000 depending on the type of account. You must be sure that part of your investment knowledge is not just how to trade stocks, but also researching the fees associated with brokerage firms. Read the fine print and have a complete understanding of all the fees required so that you are prepared and there are no surprises. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 22, 2009

Buy Stock Online

There is lot of information that you should know before you buy stock online. In today's article we list some stock trading tips to help you on your way. Before you buy stock you must have a trading system in place. With this system you should also have a trading plan that includes your trading rules for buying and selling stocks. This should include your entry and exit points as well as any stop loss orders to limit your losses. Before you begin to invest real money you should practice paper trading to test your trading strategies and trading plan. As you paper trade you can adjust your plan accordingly and not run the risk of losing real money. Once you make money consistently with paper trading, then you are ready to begin investing real money. Many people like to practice online paper trading. Before your buy stock online you must sign up with an online broker. You must have a broker in order to execute trades on your behalf. Many investors that practice short term trading, opt to utilize the services of an online discount broker. They are cheaper than full service brokers because they do not offer any financial advice and they only place your trades for you. You will have to decide which one works for you. Select a brokerage firm after doing a lot of research. Not only should you do your own research, but you should also ask around for referrals from fellow stock investors. Find out who other investors use through joining online investing forums. You should also research and compare pricing. Have a complete understanding of all of the associated fees so that there are no surprises. Once you have selected the type of stock broker and the actual brokerage firm that you will use, you then need to make an initial deposit into your trading account. Firms will require a minimum deposit anywhere from about $500 to $2,000 depending of course upon the type of trading account that you open. Margin accounts will require more of course, for those who will practice margin trading. Some website may not require a deposit at all, but you should be sure to research those website thoroughly. Remember that your broker must report your stock trades to the IRS. You will have to fill out all of the required forms before you buy stock online. Be sure that you also understand all of the tax implications for how you choose to trade. This will affect your actual return on investment in the long-run. There is a lot more to trading stock online, but this article should get you headed in the right direction. Continue to research and expand your knowledge and don't buy stock until you are sure that you know what you are doing. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 20, 2009

Stock Markets

There are many different stock markets that investors can choose from all over the globe. In today's article we discuss the major United States markets as well as other markets around the world. The stock market is a place where buyers and sellers meet to exchange shares of a company. They are physical and virtual market places that offer procedures for stock trading that benefit both the buyers and the sellers. The size of the world stock exchange is estimated to be about 36.6 trillion U.S. dollars. United States Major Stock Markets New York Stock Exchange (NYSE) – this stock exchange is located on Wall Street and it is largest stock exchange in the world. It trades about 1.46 billion shares each day including stock for about 2,800 companies. Stocks traded on the exchange range from blue chip stocks to new high growth companies. There are very strict requirements for those companies that wish to be traded on this exchange. NASDAQ – this stock exchange is the largest equity securities trading market in the U.S. It has more trading volume than any other stock exchange in the world and it was the world's first electronic stock market. NASDAQ stands for National Association of Securities Dealers Automated Quotations. It was the successor to the over the counter stocks systems of trading. American Stock Exchange (AMEX) – this stock exchange is the third largest stock exchange in the U.S. and it manages 10% of all American trades. This is one of the U.S. stock markets known for trading small cap stocks, trading options, and exchange traded funds. It lists companies from a variety of industries from companies of various sizes. There are other markets in the United States including the Boston Stock Exchange, the Cincinnati Stock Exchange, the Chicago Stock Exchange and the Philadelphia Stock Exchange. Other popular stock exchanges in the world include the London Stock Exchange, the Euronext and the Hong Kong Stock Exchange. The London Stock Exchange is one of the largest exchanges in the world and it provides equity markets, trading service, derivatives and market data information. It is one of the top locations for finance in the world listing over 3,000 companies. The Euronext is based in Paris and is a European stock exchange. It also provides derivatives and equities markets and it is ranked the number fifth largest exchange in the world. There are other stock markets that stock investors can learn to trade from however this article discusses the major exchanges. Continue your stock market investing education to learn more about these stock exchanges and others. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 15, 2009

Charting Stock

Charting Stock – The Basics When learning how to read stock charts there is basic information that you should know. Stock charting is based on the principles of technical analysis as opposed to principles of fundamental analysis. Technical analysis is the method of predicting future price movements, whereas fundamental analysis is based on a stock's intrinsic value. While technical analysis is not fool proof and is open for interpretation, it is a very highly valuable tool for finding profitable trading opportunities. In today's article we will discuss charting stock basics. Time Frame – short term stock trading involves the use of intraday time frames that deals with short term movements. The intraday data is used to build daily price data. Day traders will use a different trading time frame than swing traders. The time frame that you choose to trade in will depend on your trading style and your personality. Be sure to research the different trading times frames, the combination of data as well as the different types of stock charts. Price – this refers to the type of stock chart that you will use to trade stock. The main three types go stocks charts include bar charts, line charts, and candlestick charts. Candlestick charts are considered among traders to be the most visually appealing, the easiest to read, and they provide the most valuable information when charting stock. The line chart is the most basic form of price display showing the closing price only for the stock per time period. The bar stockchart displays price using a single bar for each time period and it displays the open, high, and the low. There is also a small horizontal bar that shows the open and close for that trading period. The slender shapes of the bars do allow stock traders to see more information in a time frame. The candlestick chart is based on the use of Japanese Candlesticks to trade stocks. These charts were originally used in Japan centuries ago in order to forecast the prices of rice! These charts are now the most popular style of price display. Once single candlestick consists of an open, high, low and a close and the body of the candle either black (red) or white (green). There are advantages and disadvantages to using each of these three charts however, most traders opt to read candlestick charts when charting stock. Once you have decided which stock chart you will use then move on to study technical indicators. Technical indicators include stock chart patterns, moving averages, and most traders use two or three indicators in conjunction with each other for accuracy. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 13, 2009

Stock Share

Stock Share Types Just as there are different types of stocks there are also different types of shares. In today's article we provide a list of the different types of shares as well as a definition for each. It is important to have this basic knowledge before investing in the stock market. Authorized Shares – These shares represent the total number of shares of stock that were authorized when the company was created. The only way the number of authorized shares can increase is if the shareholders vote for the increase. Not all of the authorized shares have to be issued to the public; in fact, many companies retain some shares for later use. These shares are referred to as unissued shares. These companies may later use these shares and often retain a very large percentage of authorized shares in order to ensure that no other companies can seize control of them. They also like to have stock share available for future issue instead of using debt for major expenditures or to buy another company Unissued Shares – As mentioned above these are those stocks and shares retained by the company in its treasury and they are not issued to the public or to employees. Restricted Shares – This type of stock share refers to company stock that is used for employee incentives and compensation plans. It is important to note that when a company first goes public there is a waiting period where insiders restricted stock is frozen. Permission of the Securities and Exchange Commission is required by stock holders in order to sell these restricted stock shares. In order to do this, insiders must file a form with the SEC to declare their intention. Float Shares – These shares are those that are available for trade on the open market. Anyone can participate in buying stocks and shares that are considered to be float shares. If the float of a company is small and the stock attracts attention of investors it can become volatile due to supply and demand imbalances. More buyers drive the stocks up but you must be careful that the stock is no over priced in comparison to its earnings or other fundamentals. Outstanding Shares – Outstanding shares includes all shares that are issued by a company. This includes float shares as well as restricted shares. The above provides a quick snapshot of the different stock share types. Continue your stock market education and learn more about trading shares. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 9, 2009

Investing 101

Thinking about investing money, but are unsure of where to begin? You are not alone, especially in today's market. In today's article Investing 101 we discuss steps each new investor can take to begin investing for your future. One of the first steps you will learn in investing 101 and that that new investors take is to open a brokerage account. Brokerage accounts will allow the investor to purchase stocks and bonds, mutual funds, and other types of investments. There are fees associated with these accounts that determine not only on the brokerage firm, but the type of account, what you want to do specifically with that account, and the type of broker that you decide to use. There are full service brokers that will provide an array of services, and are more expensive. There are also discount brokers that are cheaper but they don't provide the level of service that full-services brokers provide. Basically, investing 101 tells us that newer investors may want to start of with a full-service broker, where more experienced stock traders that are more self-directed may opt to utilize the services of an online discount broker. When opening an account, be aware of the different fees as well as the commission fees, and the minimum investment required to open the account. This again will depend on the type of account you are opening and the fee usually ranges from $500 to $1,000. The process of applying for an account whether you will be investing in stocks, investing in bonds, or investing in mutual funds, is relatively simply and you can typically get them off of the brokerage firm's site online. Investing 101 will also teach you that you must not only research the brokerage firm's fees but you must also research the firm's customer service ease of use, website, etc. Call into their customer support and see how long it takes them to answer the phone. Once they answer the phone, ensure that they are courteous, knowledgeable and are able to answer your questions. This will give you a good idea of how your experience will be with them should you encounter any issues. Once you open your account you are then free and clear to begin investing your money. All firms will give you the option of paying automatically each month, in which your fee will deposit directly into the brokerage account from your checking or savings account, depending on how you set it up. This helps to invest money to start building up your equity. Continue to research other investing tips and investing basics before you take any action and good luck! Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 5, 2009

Investing Tips

There is a lot to know about investing whether you are looking towards long term investing or short term trading. The bottom line is that education is the key to success whether you are looking to invest in the stock market, in mutual funds, or other types of investment options. In today's article we discuss some investing tips helpful to all new investors. There is no right or wrong way to invest only better or worse investment options. There is not one investing strategy that works for every beginner investor nor is there a set of rules that works for every investor. Risk tolerance, financial resources, and your interests will all play a factor in how you to choose to invest. You must find investments that work for you. Before you act you must develop a plan as well as procedures. For example, if you are going to trade stock for a living, then you must develop a trading plan that documents a set of trading rules that you will follow. Never invest without a complete understanding of what you are doing and a plan of action. There are broader investing tips that every investors should follow as it relates to education. For example, you should understand some basic investing concepts such as earnings per share, net worth, and stock analysis. Investors who are interested in investing in the stock market must be sure to learn about and understand the differences between fundamental analysis and technical analysis. Understanding these two important concepts will enable you to discover your trading philosophy which will ultimately determine how you will invest in stocks. Perhaps one of the most important investing tips is to achieve portfolio diversification. Diversify your investment portfolio through investing in stocks, bonds, mutual funds, and other types of investments. You should have some higher risk investments along with other lower risk investments that are more dependable. You can never do too much research when looking to build a strong portfolio. There are so numerous stock market tips as well as tips with mutual fund investing as well as tips for the newer exchange traded funds. The most important thing that you can take away from this article is that knowledge is power, when beginning to invest, and you can never have enough of both. Do your research, take your time to understand your own strengths and weaknesses as an investor, and build a strong portfolio that will make you money, but won't keep you up at night. Happy investing and good luck! Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

May 1, 2009

Investing for Beginners

In today's article we take a look at the different types of financial instruments that can be traded in today's markets as well as brief explanation of each. Stocks – Many people opt to invest in stock as part of building their investment portfolio. Portfolio diversification is the key to success and investing in stocks is great way to make money. It can be said however that investing in stock is actually different from trading stock. When someone invests in stock they will hold onto that stock for longer period of time, such as months to years. These investors become shareholders and believe that their stock will increase in value over time. When investing for beginners it is important to understand that those who practice stock trading buy and sell stock over a period of days, minutes and even seconds! Currencies – Currencies trading is also referred to as forex trading, FX trading, forex currency trading and more. The forex market is the most liquid market in the world and it involves the trading of one country's currency for another though a currency exchange rate system. Currencies are always bought and sold in pairs and this market is one of the fastest growing divisions in the online trading community. When learning about currencies and investing for beginners it is important to know the main currency pairs that are the most widely traded on the currency exchange. Stock Options – Stock options trading is different from regular stock trading and there area lot of different stock market terminology associated with options when compared to stocks. When you buy stock options, you are not buying ownership in the company but instead you are buying the right to buy stock at any time in that company up until the expiration date of the options contract. Stock options require less capital and they allow for higher leverage, which is why some traders opt to trade stock options instead of plain vanilla stocks. Commodities – Commodities can include items such as soybeans, rice, sugar, gold, ethanol, pork bellies, currencies, and much more. Investing for beginners tells us that commodities are any product that trades on an exchange. Commodities trading is the buying and selling or commodities through what are known as futures contracts and the prices are subject to supply and demand. Similar to stock options, futures contracts also give you're the right but not the obligation to buy a certain commodity, or other asset, during a particular time period. There are many additional types of investing for beginners so continue to research and find out what you would like to invest in. Your options are endless! Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

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