Trading Using Fundamental and Technical Analysis

There are generally two types of investor in the world today.  The first group prefers a long-term perspective, one in which it studies several companies for potential appreciation opportunities over many years, and then elects to “buy-and-hold” its chosen security for many years to come.  For this investor, fundamental analysis is definitely his preference, and he may rarely attempt to employ technical principles to guide his effort.  The latter class of investor is the active management type, or trader.  He prefers to enter and exit a market at will, using technical indicators to optimize his opening and closing of positions, recording gains as he goes and being ever mindful of fundamental data releases.

For the traders among us, whether the harried day trader or the swing-trader looking for trades that last a few days at the most, the thought of attempting to survive in volatile markets, especially the currency markets, without the assistance of either technical or fundamental analysis is anathema, an obvious prescription for failure.  The last thing a trader needs is to be blindsided by an immediate reversal of material proportions.  This situation can occur every month like clockwork with the release of non-farm payroll data by the U.S. Department of Labor on the first Friday of the month.

December 3, 2010 was just such a day.  The chart below illustrates the pricing activity of the “EUR/USD” currency pair:

   

The employment data is critical to assessing the health of the economy of the United States.  The data for the prior month is released at 8:30 A.M. EST, and analysts need about thirty minutes to assimilate the report and react.  Trading volume suddenly shifts into high gear.  Broker servers become overloaded, together with switchboards.  Attempting to change previously issued orders may not be possible during this period.  Broker agreements even specify that orders, especially stop-loss orders, may not be executed due to high volume.

In this case, there was an immediate upward movement by the Euro, a response to an unexpected increase in unemployment in the U.S., but the trend continued for nearly three hours.  Traders that “trade on the news” never try to pick a perfect bottom or top, but in this example, after the initial tsunami subsided, there was ample room to benefit from the last 100-pip leg of the run-up.

Technical indicators would have provided guidance for the above entry and exit points.  The “GBP/USD” tends to react more widely.  Its run-up was on the order of 200 pips, versus the 150 pips above. Fx trading on the news is not for the faint-hearted, but even if this opportunity is not for you, you need to be prepared for the volatility that can occur when major data releases are announced.

The dates and times of public releases of economic data in major markets are known and published.  Many brokers produce a schedule to assist their clients in preparing for these events, if only to avoid the volume outbreak.  Volatility, however, is the basis for many trading strategies, and measuring the strength and momentum of the trend is key to selecting profitable opportunities in the market.  There are indicators that have been designed to give guidance in both of these areas.

Even for the long-term investor, there are obvious benefits to be gained from technical analysis.  The optimization of your security entry price can yield immediate gains.  Major stock patterns are much like shorter versions within currencies – they tend to move in waves.  Technical indicators can prevent you from buying on a peak when an overbought condition is prevalent.

How To Trade Like A Professional

Learn To Trade Like A Professional

The most successful floor traders are those that have the most experiance, this is no coincidence at all and should be a pointer for those who aspire to become a good trader. Day trading can be likened to being a sportsman, such as a golf pro or tennis champion, you need to be trained and in good physical shape. Skills are needed which must be developed over time and practiced until they become 2nd nature. If you want to learn how to day trade you must be prepared to put in the effort. Here are some of the key skills that you must develop as a trader.

1. Technical analysis can be used for futures as well as the more standard stocks, options and bonds that most people trade. This can give you a large edge over other traders who have not taken the time to study the charts support and resistance areas, trendline and patterns. Learning technical analysis is really a must do if you want to trade futures successfully.

2. This is a very simple point but is very important, always have your trading plan prepared before you enter a trade, never try and create it on the fly, you will be much too emotional. Make sure that you have both an entry and exit point in your plan.

3. Keep your losses small!, this is the one thing that every trader must do if they want to stay in the game for a long time. By doing this you will preserve your capital allowing you to trade another day. Your small wins will compensate your small losses allowing your big wins to give you an overall profit

4. Over trading is a big mistake that a lot of amateurs make. Professionals tend to be more patient and wait for the better opportunities to come along, this is called cherry picking and takes both patience and discipline. These are essential skills that you must develop.

5. This is a big day trading tip, it is important that you track all your trades and review them to see where you are making the mistakes. This is hard work, but this is what separates the professionals from the amateurs. Unless you do this you will keep on making the same mistakes. The best way to do this is to keep both a daily and weekly log.

6. Only trade when you are both physically and mentally prepared. This is often overlooked but is very important. Do you think a golf star can win a game when they are tired and mentally not focused?, it’s unlikely. Being prepared means getting a good nights sleep, having your trading station and charts well prepared before the market opens, taking the time each and every day to review your trading plan and rules. Finally you must have the mental frame of mind and confidence that you are going to be successful today in your trading.

7. If you are new to trading futures take the time to paper trade until you are very confident that you are going to make money. You will know when you are ready because you will start to hate paper trading knowing that you could be making real cash profits on a consistent basis.

Remember that the markets only trend for about 20-35% of the time, the rest is either sideways or very choppy, if you want to do trend trading to win you must be fully prepared when the opportunities arise.

Free Top Dog Trading Course

Here is a great free gift from Top Dog Trading, they have just finished creating a new course that gives you the most important things that turned Barry Burns own trading.

At first they were going to charge for it … but they have decided to start
the New Year by giving it away to all of their students, subscribers and readers.

Ot is just their way of saying “thank you” for your friendship, and to help you make this your best trading year.

There are no strings attached and you don’t have to “opt-in” to anything. Simply go to the site, download the PDF outline and then follow along with it as you watch the 3 videos (there is about one hour of training in all).

It’s there for you at the Top Dog Trading Blog

To access the course, just go to the front page of the blog and you’ll see the most recent post at the top of the page gives a quick introduction and then gives you the link to the course.

The post is entitled: “Top 20 Daytrader Secrets for Day Trading Stocks, Emini Day Trading, Forex and Other Markets.”

Just go to  Top Dog Trading Blog

How To Use An ETF Trading System

How To Use An ETF Trading System

Exchange trading fines also known as ETFs maybe bought or sold just as any other stock. ETFs are sold at any brokerage firm. The ETF trading system consists of a set of rules that dictate when to buy and sell ETFs that allows you to trade without emotion. By following the rules, even market downturns do not prevent you from making money.

Many systems pose a risk that is between a mid-low and a a medium risk. Many are easy to use.

The one key thought of an ETF trading system is never stray from the rules. That souds easy enough, but wait till a buddy brings a tip or the market becomes unstable. Then the emotions can get pretty strong.

Even in an unstable market, you can consistently out perform the buy and hold people. You can count on a steady annual return.

Time travel back to 1928. The market was going big guns. You did not have to have a plan to make money, just drop money into the stock market. And all was well until one day when the market crashed the next year. People followed their emotions and feelings to financial ruin. Emotions are a poor guide for making investments.

Investors who did not follow their emotions, but followed their rules, may have had short term losses, but continued to make an overall profit. By following the rules, investors could have had a fourteen percent annual return over the next twenty years, even though the market did not return to its peak from just before the fall during that time.

It could take the market another fifty to eighty years to recover to its highs of a few years ago. Unfortunately, most of us cannot wait that long. We need something that will give us that same consistent annual return. ETF trading system can do just that. They will help you to avoid the pitfalls of sharp market downturns. They help you to make money year after year.

Stop following the heard. You probably learned that lesson a couple of years ago when you were trampled. Followers always get trampled in the stock market, it is only the leaders that win. They know to sell before the everyone else and to buy before everyone else. That is why they win.

If you want to be a leader and win, get a proven ETF trading system and start following your rules and not your emotions. If you follow the ETF trading system you will come out in the lead every time.

Can Sure Fire Trading Make You Rich?

Sure Fire Trading Reviewed

If a product has moved up by about 20 places in under a week in the ClickBank top product list, it actually is good – that’s a fact.

Sure Fire Trading has done precisely that, and is now said to be among the most promising trading systems available on the internet now.  One bizarre thing about Sure Fire Trading is that the ideas and elements aren’t restricted to any one mode of trading – they’re equally useful in foreign exchange, Stocks, Commodities, and Futures trading.  Nice, right?

The system looks highly easy, but be assured that there was a large amount of tough work which has gone into making the system so good.  From Fibonacci to trading samples from different states and time-zones, they have all been researched for a period of virtually 5 years, and that it probably why the system is sheer genius.

Though there are separate chapters for futures, stocks, currency exchange, and commodities, the essential guidelines are the same.  And the beauty is that you don’t need to buy the program in order to benefit from their data.  There is a column that pops up ( and is really extraordinarily persistent ) asking for your name and e-mail id ; or at the end of each page you have a place to leave your e-mail id and name to add on to the Sure Fire Trading mail list.  Doing so will put a newsletter in your mailbox at regular intervals, and the tips mentioned in them are quite enough to get you off the ground as a trader.  When you start believing in the middle, you can take up the premium membership and buy the e-book.

If you check the Page Rank of Sure Fire Trading, you may notice the PR is 3.  That implies the site has been around for quite a while now, and is also reasonably popular.  If you’re significant about trading online, this is a program that might come in very handy.  Try it.

 

Share Trading Course: Top Dog Trading Review

Search for ‘Technical Analysis’ on the internet and you will be overwhelmed with material, but after much digging and researching I found Top Dog Trading.

When I began trading Share markets, I realised that fundamental analysis was not a system I could use, but analysing share charts was something I could get my head around.

What helped my decision to take the Top Dog Trading course to learn Share trading?…. A variety of things besides the desire to improve my trading and stop entering too many loosing positions; was that I had a good feel for what Dr Barry Burns was imparting on his website and a significant amount of the teaching is explained on the detailed videos which makes it much easier to understand and see what he is saying. A further qualifier was Barry’s CV; it is impressive, a business man who treats trading as a business, he is also a accomplished speaker and writer.

So I started with his free 5 video course on learning to trade to see if I felt good about his analysis systems.

Prior to this, I had studied several other courses on technical analysis for Share trading but even after all of these I still felt there were gaps in my knowledge that would allow me to become a successful trader, all this changed once I came across Dr Barry Burns, now I am comfortable with the share trading strategies I have learnt.

In his courses Barry explains the principals simply and clearly, then gives real chart examples with all their erratic moves showing how to make the rules work profitably. This is all explained via a vast selection of videos.

Having completed Barry’s courses I have not only learnt how to execute his methods but also embraced a far deeper knowledge of the Share market & the associated charts but more critically the money management and personal philosophies that are such an important part of becoming a professional Share trader.

Barry’s teachings are the best Share trading courses that I have come across and I would highly recommend that you give his FREE course a try. This freebie has 5 videos that walk you through some of the most powerful trading material I’ve ever come across.

Barry teaches methods, which when stuck to, provide a good ratio of winning trades with tight control on the losses, so when one does have a losing trade (which all traders do) the financial pain is not too severe.

I have completed the course, loved it, and gained a vast amount from it and have gone on to Barry’s more advanced courses. My want to delve more into the world of Share trading has turned out to be very profitable.

Try Barry’s Free Video Course for yourself, it’ll be the best thing you’ll do!

Understanding The True Value of Gann Square of Nine

Gann Square of Nine or Gann Pyramid as it is also called, is one of the most useful tools in the investment industry. Though it is somewhat more complicated than other tools, once mastered it is very useful when applied to financial analysis.

The Gann Square of Nine is most often used to confirm the significance of highs and lows in terms of stocks, commodities and other types of investments. Imagine being able to predict when to buy a particular stock and how much to pay. The Gann Square of Nine makes this not only possible, but also a reality that has worked for many investors over the past century.

It is important here to note that Gann Square of Nine should never be used to choose tops and bottoms when selecting stocks, but it can be utilized to provide additional information to confirm how significant a recent high or low point in the market was when a break in a trend occurs. Gann Square of Nine is similar in shape and concept to a wheel or circle, and is often also referred to as the Gann Wheel.

It starts with the number 1 in the center and radiates out to the first square of nine. This begins with the number 2or number 1 to the left of the center, it then spirals clockwise to the number 9 in order to form its first rotation around the square of nine. This rotation then shifts one unit to the left of nine and the next rotation begins at the number 10. It then continues its spiral to the number 20 and so on.

Here is a picture of the Gann Square of nine:

http://www.stock-commodity-trading.com/gannsquare.gif

The Gann Square of Nine is a time and price calculator that figures the square root of numbers, both odd and even and their midpoints as well. It also seeks time and price alignments from a specified starting point or price level. One example of this would be a significant high or low point in a given market.

If you look at the numbers that appear on the grid that run down to the bottom left corner on the Gann Square of Nine, you will find them to be the square root of odd numbers. An example of this would be 5×5 = 25. If, on the other hand, you look at the numbers that run up to the top right corner on the Gann Square of Nine, you will find that they are the square root of even numbers. An example of this is 4×4 = 16.

The numbers that run down to the bottom right corner will show you the midpoint between the squares of odd and even numbers. Let’s use the numbers 25 and 16 mentioned above to illustrate this. Here, the number 21 would represent their midpoint because it falls exactly between them.

The Gann Square of Nine is an arrangement of numbers with a specific order and a used in a number of ways. Further review of Gann Square of Nine will show you how it works and illustrate its usefulness in determining market highs and lows.

Day Trade Options

When you are considering a move into the Forex market and the day trade option, you need to be aware of certain things. For one thing, not many people in the world are actually doing the day trade option and of those that are, they drop out at a much higher rate than those who go into the Forex market and take the long route.

Considering that 90% of the people in Forex drop out, the number of people who enters the day trade would be higher and this means that there left little room for you. Of course, this is not saying that you cannot make money on the day trade, of course you can – it is just a question of how good you are.

But if you are a Forex newbie, then it it advisable that you not do this unless you have good prior knowledge of the Forex market. You need to be able to capitalise on the smallest of all price movements, and when you can do this, you would need to react really fast. But if you are looking at it from a part-time revenue point of view, then it will definitely not work.

You need to adopt at least 4 – 6 hours a day on your day trading, and you need to understand that it is only possible to move in tiny pips a day. Profit is one thing to be concerned about and you need to understand that the going is pretty tough when you are talking about the whole concept of the day trade.

It is a mighty challenge and the money might come in slowly. You really need to weigh your options when you consider the day trade. Closing your positions at the end of the market day and starting fresh requires plenty of stamina and you really need to micromanage you entire asset management. The paper trade is popular and one that is dynamic too, and a volatile market is what you need to go for, but this means that your day trade option is going to be a hectic one.

There are many day traders out there and the reason is because majority of these players are experienced traders. When considering the day trade option, you need to realise that those that have been doing it for long time are the people who have plenty of experience behind them.

Day trade is not for everyone and when you are looking at a zero sum game like the Forex trade, you might not want to be at the losing end at all times. You will need to judge for yourself how good you are and if you are not, then it is time to improve your skills and efforts.

Swing Trading and Stock sell Investing Tips

What is Swing Trading and is it Right for You?

There are diverse types of trading or outlay strategies that relations next when trading stocks and shares. Day trading, lasting investing and swing trading.

Day trading as the name implies is trading over the interlude of a day and closing all your positions or the stock souk closes. enduring investing is compelling a posture that lasts a few years a la lair Buffett.

Swing trading involves trading in stocks for short point of time, commonly a few days, in order to take pro of a swing in the set a price of use swing trading involves identifying an uptrend or a downtrend in a stock fee In an uptrend the highs are elevated and the lows are advanced too. Swing traders look for boring patterns in order to foresee when a stock price will stop falling turn about and start mounting yet again.

Swing trading is all based on calculating the risks beside the loot – if the risk is too virtual to any the makings loot then there is no point in the traffic There are a add up to of criteria that must be met or a trade is placed.

Stocksare normally trading higher than $10 with a daily capacity of more than 500K shares, as such stocks are less answerable to be manipulated. To connect a stock which is in an uptrend the finishing price must be above the daylight hours emotive be an average of and the day of the week plain heartbreaking mode and the daylight affecting typical needs to be above the 20-day heartrending arithmetic mean.

There are a come to of points to take into consequence when swing trading to limit your risks. Don’t advance all your money in one go. If a stock gaps up 1 to 2%, then buy half the total you be determined trading. Wait to see if the price continues to rise earlier investing more riches If the stock gaps up 2 to 3% then only put in 1/4 of the total amount you be going to trading.

If the share gaps up more than 3% then don’t make an effort with the trade as the risk/reward ratio is not good sufficient The aim when swing trading is to pull off a aid of 5 to 10 % if you complete this (or if the trade turns contrary to you and you start behind currency then close the trade and look for an extra occasion.

Stop victims each one makes losses the trick is to make sure your losses are less important than your gains. To ensure this you need to set stop sufferers when you place your craft such that if the trade goes wrong the perception will be certainly stopped up out. Given that in swing trading the benefit reason is in the state of 7% your stop loss must be set at something like 4%.

Free Trading System and Course

Very limited time offer!

yes it’s true, I’m giving my trading course away, as part of an experiment I’m running on Twitter, I’m sure you have heard of it?, if not visit http://www.twitter.com

Just visit:

http://www.topdogstrader.com/twitter/

and follow the simple instructions and you can download this great course on trading the futures market at no cost

but hurry, I’m not leaving this page up for long

« Older Entries