One of the basic tenets put forth by Charles Dow in the Dow Theory is that security prices
do trend.
To consistently earn money in the stock market, you only want trade stock trends!
Trend following is a popular trading system. The method involves joining an established
trend with an aim to ride the stock in the direction it's heading and exiting when the
trend reverses.
Trend following is a great way to chew up your trading capital!
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A principle of technical analysis is that once a trend has been formed
it will remain intact until broken.
That sounds much more simplistic than it is! The goal is to analyze the current
trend using trendlines and then either invest with the current trend until the
trendline is broken, or wait for the trendline to be broken and then invest with
the new (opposite) trend.
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After a significant price move (either up or down), prices will often
retrace a significant portion of the original move. As
prices retrace, support and resistance levels often occur at or near
the Fibonacci Retracement levels.
The Fibonacci Retracements pattern can be very useful for traders to
identify reversals on a stock chart.
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There are many ways of using moving averages to trade but by far the
most common method is to trade when a short-term moving average
crosses over a longer term moving average.
An up signal is given when the short-term price MA crosses above the long-term
price MA. A down signal is given when the short-term price MA crosses
below the long-term price MA.
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The MACD Histogram (Moving Average Convergence Divergence Histogram) provides
far earlier and more responsive signals than the original MACD.
The MACD Histogram is useful for anticipating changes in trend.
Alexander Elder describes the divergence between the peaks and bottoms
of share price and the MACD Histogram as the strongest signal in
technical analysis.
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Relative Strength Index (RSI) is an extremely useful and popular
momentum oscillator.
The best analysis of the RSI was found out: it is better to find a
divergence in which a new high is being made by the security, but the
RSI is going down to surpass its previous peak. This divergence means
that soon the reversal will come.
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Price % Gainers |
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As of 7/2/09 00:00 ET |
|
| Symbol |
Last |
% Change |
$ Change |
|
11.44 |
37.83 |
3.14 |
|
5.33 |
25.49 |
1.08 |
|
7.87 |
25.12 |
1.58 |
|
6.48 |
18.25 |
1.00 |
|
9.05 |
17.53 |
1.35 |
|
4.75 |
17.30 |
0.70 |
|
10.75 |
16.22 |
1.50 |
|
7.98 |
14.00 |
0.98 |
|
5.77 |
13.14 |
0.67 |
|
8.96 |
12.06 |
0.96 |
|
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Price % Losers |
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As of 7/2/09 00:00 ET |
|
| Symbol |
Last |
% Change |
$ Change |
|
7.26 |
-25.58 |
-2.50 |
|
14.67 |
-18.00 |
-3.22 |
|
7.00 |
-16.77 |
-1.41 |
|
6.61 |
-16.70 |
-1.33 |
|
7.87 |
-16.28 |
-1.53 |
|
9.09 |
-15.60 |
-1.68 |
|
6.19 |
-15.09 |
-1.10 |
|
3.55 |
-14.66 |
-0.61 |
|
4.10 |
-14.23 |
-0.68 |
|
6.25 |
-14.15 |
-1.03 |
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Volume Leaders |
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As of 7/2/09 00:00 ET |
|
| Symbol |
Last |
% Change |
Volume
|
|
12.64 |
-3.14 |
215,154,384 |
|
5.89 |
-0.34 |
73,488,744 |
|
11.46 |
-2.72 |
71,448,616 |
|
23.37 |
-2.79 |
65,392,808 |
|
16.72 |
-1.88 |
54,881,000 |
|
23.08 |
-4.39 |
52,469,196 |
|
18.50 |
-1.60 |
41,516,896 |
|
14.48 |
-2.82 |
41,197,200 |
|
7.60 |
8.57 |
40,262,336 |
|
12.97 |
-3.14 |
40,194,908 |
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6/30/2009
It is common to want to pick the bottom of a stock in order to get in before a trend starts. But that does not make it the most profitable route to go. It is a far better strategy to stick with the trend of a stock until it ends for the following reasons. read more..
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6/29/2009
Anytime there is a drawdown in the stock market everyone still wonders if the stock market is really a great place to put your nest egg and save for retirement. In short it is still better to be invested in the stock market now then it is to pull your money out and put it into a bank and here is why. read more..
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6/29/2009
Asset allocation funds can be a great way to approach investing because they allow you to benefit from the movements of stocks, while at the same time avoid the volatility they come with. They do this by investing in other asset classes such as bonds as well as stocks. Some of the major benefits are. read more..
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6/22/2009
Gold is considered to be a great place to put your money in order to guard against inflation. It is a shiny metal that is deemed valuable, but why does it work to help your money keeps its buying power, even when inflation hits? read more..
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6/22/2009
Naked puts can be both very profitable when done right, and very deadly when done wrong. To avoid making a huge mistake by selling naked puts you should always consider the following. read more..
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6/20/2009
Stock splits occur when the price of the stock lowers and investors get more shares to make up for the lowered price. So do they actually affect how strong a stock will be in the future? read more..
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6/19/2009
Trading with the trend is the best way to make a great return in the stock market. Regardless of what your strategy is trading on the same side as the overall trend can improve your winning streak. read more..
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6/19/2009
There are two major ways to trade the stock market, bottom picking and momentum investing. Most people attempt to make money by calling the tops and bottoms, but it can be more profitable to simply ride a trend until it ends. read more..
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6/18/2009
Option Greeks can be a very good way to estimate the price of an option as a stock does one thing or the other. There are three reasons why the Greeks can really help you out in the trading world. read more..
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6/18/2009
Selling Puts can be a very effective strategy for pulling money out of the stock market on a consistent bases or even getting into a longer term trade and getting paid to do that. When you sell a put you sell the right for someone else to sell you the stock at a certain price on or before a certain expiration date. How can you use this strategy to your advantage? read more..
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|
| Symbol |
Last |
% Change |
|
8280.74 |
-2.63% |
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1796.52 |
-2.67% |
|
896.42 |
-2.91% |
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5775.24 |
-3.00% |
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1.3987 |
0.26% |
|
1.6379 |
0.26% |
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95.95 |
0.05% |
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932.63 |
0.37% |
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10/14/2008
Trading is a business, it can be played like a game but it really is a business. If you do it well, trading can potentially outstrip any conventional business in terms of monetary returns. But you should know this already, that's why you are reading this in the first place. What you probably don't know at the moment is how to trade Forex smart so that you will be a top earner and not a top loser. read more..
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5/8/2008
There is a widespread rumor in the financial community that successful day trading can be manually programmed and automated to produce vast profits for minimal work and input on the part of traders, providing a regular and consistent income by simply setting up a system, clicking a button to turn it on, and walking away. This is NOT true. I myself am just one of the many victims of this 'automated trading system' myth. read more..
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9/1/2008
Stock screeners are extremely useful in allowing traders to search the entire stock market for stocks that conform to specific criteria set by the user. This allows traders to compile a Watch List of stocks that conform to their criteria. read more..
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9/1/2008
I have been making some great money from the stock market over the last few weeks. In this article i will explain my strategy and dissect how and why I have been making money despite global indices falling as the full effect of the credit crisis sinks in to the financial world. The media is absolutely full of doom and gloom about the worlds stock markets at the minute. read more..
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10/14/2008
The stock indexes are at a low. An upside reversal is due. The Russell 2000 and the S&P 600 may be leading the way. read more..
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