Using Technical Analysis to Win on the Stock Market

On February 7, 2010, In Main, By americandollar

When you buy stocks, it is important to take a look at the profit and loss trends with that stock. If they drop more than they climb during day trading, then you’re taking a risk. The profits may be great at one time, but not selling at the right time could result in significant losses. You want to know when the right time to sell is.

Another reason why you may wish to watch stock trends is because you want to buy low and sell high. Stock trends always show what the lowest trading price and what the highest trading price has been during day trading. That way, you know it is time to sell if your stock has reached or exceeded the highest trading price listed. Some individuals decide to sit on that stock despite the high sale price, but could be risking not getting the maximum out of their stock. However, by monitoring stock trends and news surrounding that stock and its company, those individuals can make an informed decision as to whether or not to sit on it or whether or not to sell.

Power of trend lines

It doesn’t matter if you are a high risk individual or one who does not like risk at all, monitoring the stock trends are very important. If you are not a risky person or you are unable to keep a steady eye on stocks that fluctuate quickly, you may want to buy stock that doesn’t have rapid fluctuations. If you look at the trends of the stock market as a whole, you will see that it can rise at a very high speed, but it can also drop at the same speed or faster. However, what you will notice by studying the trend lines is the fact that when it is down it always goes back up. This seems to be what we have been seeing in the stock market in recent days, but this can always change. However, stock trends can certainly tell you a story about the stocks that you are investing in and whether or not you want to invest in that stock.

Basically, trend lines more or less take care of the guess work when you buy stocks. You shouldn’t have to guess with your money if you don’t have to. When some individuals lose money on stock and they say that they wish someone would have told them about that stock, they obviously didn’t look at the stock trends. The stock trends tells them whether or not they should use as much as a ten foot pole to touch that stock with, let alone invest large sums of money in it. Sure, it may be great to buy that stock when it goes down, but the trends will display whether or not that stock will move up when it goes down. This takes up back to the aspect of buying when stock is low and selling when it is high.

By buying low on a stock that shows trends of bouncing back can be quite profitable. A stock that has consistently bounced back after reaching very low prices shows that the stock is very resilient. If it currently shows that the stock is dropping and dropping fast, it is important to watch it. If past trend lines show that it always bounces back, then this stock may be worth investing in. However, you must evaluate how quickly the stock climbs after it has dropped and determine when you want to sell based on the trends. If it is prone to dropping quickly, then you may want to sell when it reaches a price comparable to its highest trading price according to the trend lines. With this, it is very obvious how powerful trend lines are in deciding how profitable you can be.

Monitoring stock trends

It is important to not be lazy when monitoring stock trends since they help you determine when to buy stocks and sell stocks. But we all live busy lifestyles that can make it difficult to constantly research and monitor our stocks. That is why a stock screener presents a great solution. What a stock screener will do is notify you of any trading signals, provide you with strategies, show you charts that notify you of the trends your stocks are experiencing, and will notify you of hot stock picks. The hot stock picks are based upon the overall performance of that stock based on your risk level and other criteria. Basically, a stock screener is allowing you to optimize your stock trades and use investment strategies that will give you the best return on your investment.

A stock screener such as Technical Stock Screener provides you with all of the information needed to be successful in your stocks. A stock screener puts all of your stock information in one place so that you do not have to tediously search market listings throughout the internet or, if you wish to buy stocks, you are not trying to find the best stock picks on your own. It is easy to miss the best stocks when you are trying to find them on your own and it isn`t your fault. It is simply because it is difficult to sift through all of the stocks on the market to find the best one. It can also take up time that you don`t have. That is why there is a stock screener to help you identify those important stock trends to help you decide when the best time to make a move with your stocks is. What you will find is that you can maximize your investment by being better informed about the happenings of the market.

Alan McKnight is a successful trader and an author of many articles devoted to stock trading. His deep expertise in technical analysis, fundamental analysis, investment and stock picking strategies has made him a well respected member of the financial community. As consultant, Alan has participated in developing various stock screening tools including Technical Stock Screener. Alan has frequently been published in national publications, and he is always glad to share his years of experience and knowledge with other stock traders and investors.

Article Source: http://EzineArticles.com/?expert=Alan_McKnight

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Learn Technical Analysis – Ascending Continuation Triangle

On February 6, 2010, In Main, By americandollar

While another Classic Pattern has already been discussed in our Learn Technical Analysis Free series, we should also be introduced to the Ascending Continuation Triangle pattern rather early. This Classic Pattern will take shape when two high levels of a trading range are connected by a horizontal line (indicating a resistance level) and a rising line that are joined by two higher lows of that same range (please visit the site for a visual).

For investors who want to learn technical analysis, the Ascending Continuation Triangle is an important pattern as it provides us with a Bullish trading signal. Since the pattern is normally a short-term pattern that takes shape over one to three months, investors are able to quickly lock in gains and reverse their position without much loss.

For investors who are just starting to learn technical analysis, remaining patient as the pattern takes shape is often more difficult than spotting the pattern itself. To confirm the pattern, here are a few things one should look for:

Volume is probably the most important confirming factor when it comes to this pattern. As the pattern takes shape, volume should be diminishing. When the pattern is confirmed and there is a breakout, volume should spike. Lacking this volume spike at breakout, investors should no consider the pattern reliable and should steer away from making trade decisions based on it.

Moving Average should also be taken into consideration. If the pattern’s prices touch or come close to the 200-day moving average, then the pattern is considered strong.

Duration also needs to considered, something many investors who have just started to learn technical analysis tend to forget. Break-out will happen when the price penetrates the upper horizontal line (e.g. the resistance line), but this occurrence should happen long before the pattern reaches the apex, or right-side tip of the triangle. Generally speaking, this break-out should occur between three-quarters to two-thirds of the way along upper line.

In terms of explaining, in fundamental terms, how the Ascending Continuation Pattern evolves, consider a large institutional investor who wants to unload a large quantity of stock at a certain price. The order is placed. Once that price is reached, buyers will draw on the large supply and consequently, for other sellers to fill their orders, the price will need to drop. This will create a resistance line. However, once that large supply of stock is exhausted, the price will continue to climb as it normally would, providing the breakout that investors who want to learn technical analysis are waiting to see.

Chris Blanchet has more than 16 years of experience in the financial services in industry as a Financial Advisor. For more information about trading and investments visit Online Trader Today.com where Chris provides Technical Analysis and Options-based contributions. He maintains his debt-free blog at How To Repay Debt.com

Article Source: http://EzineArticles.com/?expert=Chris_Blanchet

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Forex Online System Trading For Higher Earnings in Shorter Time

On February 6, 2010, In Main, By americandollar

The reason for the vast popularity of forex online system trading is the desire of higher earnings of people in a shorter period of time. Under this form of trading, there is also no geographical location limitation for the investor. He can access internet from any place, whether it is at home or some other place. As the forex market is open for twenty four hours, the trading can be carried out constantly the whole day and night for profit maximization.

Online forex trading is basically buying and selling of currencies of different countries. When the investor assumes that the value of the currency will rise in the future, he buys that currency with the expectation to sell it when the value is higher. In the same way, when he expects the fall in the value of currency, then he sells the currency he is holding. The difference in the buying and selling price is his profit. Through such trading, the investor can earn good profit from his dealing in forex trade. This reason has made trading in foreign currency a lucrative venture for the investors.

The easy earning in shorter period of time has made online forex trading very popular among millions of investors. This race has also led to fierce competition among the foreign currency investors. To get success in this trade, nowadays, investors have started using various systems and tools which can get them the desired results.

Several forex trading activities can be automated by the use of such software. This helps in saving lots of valuable time for the investor. The higher earnings from forex trading depends on the effective forex online system trading to implement right strategies which can boost the income of the trader from the foreign currency trading.

This has made it necessary to utilize the right forex software system which can offer them the right information about the market and can update their daily reports. The forex software also stores the database which helps the trader to gain knowledge about the past movement of currency in the forex market.

With the application of the right forex online system trading, the investor can enhance his profit and can give boost to his income. It is also necessary that the investor gets the right software which can furnish him correct and updated information. Most of the genuine software have money back guarantee and so a person is not required to worry for the results.

It is the utility of Forex Online System Trading that it offers such information that helps a person to get good profit. If you want to know more about Forex trading, then you can visit this website at http://www.bestonlineforexsystemtrading.com.

Article Source: http://EzineArticles.com/?expert=Alan_Lim

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American Dollar is Still the King – But For How Long?

On January 27, 2010, In Main, By americandollar
Something happened in November 2008, which had not happened at any time before in history. An upstart Euro, which started to be used as the official currency in some 17 countries in Europe in as late as 1995, upstaged the megalithic US Dollar. The euro had been earlier adopted by the financial markets in 1999. The US Dollar slipped from the high pedestal and lost its numero uno position as the world’s premier currency in circulation to the Euro in November 2008. The significance of this happening was not lost on anyone.

The Euro was valued first at 1.18 against one dollar. It started losing ground fast. The trend continued until it plummeted to 0.8 per one dollar in October 2000. When the national currencies of member countries of European Union were replaced by the Euro, it took a roll reversal and started appreciating steadily. It achieved parity with the dollar in July 2002. It has since risen in value. Its career graph shows it surpassed its initial value in May, 2003 and hit 1.3 against dollars. That was the time when dollar was going through its difficult phase and was losing against all major currencies. After a period of uncertainty, Euro again rose to its highest value of $1.5 in July 2008 but plunged back to $1.25, though still higher than its initial value. As of now, i.e. Nov 2009, it stands at a respectable $1.48.

The American Dollar is truly the international currency exchangeable anywhere on the Earth. Countries like British Virgin Islands, Bermuda and Equador either use the dollar as their official currency or along with their national currencies. Still others, like Lebanon and Iraq have notified the dollar as their de facto currency.

To return to the tickling question of Euro gaining an upper hand internationally and replacing dollar, there are all kinds of speculations flying around. The downward trend took shape during President Nixon’s time when the administration started spending more money than it received as revenue. The OPEC came to its rescue and made up for the deficit. It also bought US Treasury Bonds. Japan followed suit and unloaded its substantial financial baggage in the US to buy the Bonds.

Euro-denominated bonds are in circulation and are posing a real threat to US Bonds. OPEC is looking to invest in Euro bonds. This will complicate the matter further for the dollar and the interest rates in the US are bound to raise. This is because the demand is increasing enormously and the supply may not be forthcoming from Japan and the OPEC.

Let this not dishearten the Americans because the world economy will completely collapse without dollar holding its prime position. At least that is the perceived position for now. The economies of the world will not like to be left in the lurch and left holding the bag. But for how long?

Article Source: http://EzineArticles.com/?expert=Asokan_Ponnusamy
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