Candlestick Trading For Maximum Profits

There are many people who are invested in the stock market. Many of us who have money in any type of retirement account can count ourselves as a participant in the market as a whole. But have you ever stopped and wondered how the stock market actually works? Have you ever attended an auction? If you have then you might be able to relate with the daily operation of the stock market because it's basically just that, an auction for shares of ownership of publicly traded companies.

As in an auction, there is an auctioneer. But in the New York Stock Exchange (the largest stock market in the world) and the American Stock Exchange he is called a market maker. The market maker tries to match buyers with sellers just as an auctioneer would. There is no set price for a share of stock. Institutions and traders bid to buy and offer to sell and the price is set by the market maker. The price will fluctuate throughout the day depending on supply and demand. There is no fixed price for a share of stock. Bidders buy on the expectation that the price will go higher and sellers sell because they think the price will go lower. It's a huge psychological game that repeats itself daily.

Many of you have seen the floor of the NYSE on the news or on CNN during news reports about the trading day. Maybe you have seen the ringing of the bell to announce the beginning or the end of the trading day. It really is a sight to watch floor traders buy and sell their shares with the emotions of fear of loss and the greed of potential profit. The actual participants look at the stock market as something completely different as most investors.

The NAZDAQ operates completely different from the New York and American Stock exchanges. The NAZDAQ operates completely electronically. The trades placed on the NAZDAQ are placed through a huge computerized network. It's still an auction but buyers and sellers place their bids and offer shares through the network. If you can imagine a sheet of paper split down the middle into columns with bidders on one side and sellers listing their ask prices on the other. On each side both are put into different levels depending on their bid or ask price. The highest bid price gets the honor of the top slot in the buyer's column and the lowest sell price receives the same on the sell side. This is basically a description of the quote system called Level II which active traders pay close attention to as they make their daily trades.

To many of us all this goes on behind the scenes. For a growing number of people this has become an area of study as the internet has given them access to the daily auction called the stock market. The number of online traders has steadily grown since the nineteen-nineties and some have profited handsomely and continue to do so. Others consider themselves fortunate that all this goes on behind the scenes and are content with their mutual fund. Whichever camp you find yourself in, the objective is the same%u2026to make a profit in the greatest auction in the world.

If you would like more information about candlestick charting, technical analysis or trading stocks please visit http://www.market-masters.com

Anyone who studies the stock market has undoubtedly heard of candlestick charting. Their history goes back almost four centuries as a method of technical analysis used by Japanese rice traders. It wasn't until the early 1990's that candlestick charting made its way to the western world. As popular as the technique has become in the west, it's hard to imagine a time when there was little information able to be found on the subject. All a person needs to do is type the term "candlestick charting" into their favorite search engine and they are presented with all types of information on the topic. There are numerous websites, articles, books, software, courses, and videos. There are even candlestick games and flashcards! The subject has been highly commercialized due to the desire of new traders wanting as much information about the subject as possible.

One of the drawbacks of the excess information available on the topic of candlestick charting is that there is as much bad or incomplete information as there is good. Unfortunately, the trader new to candlesticks takes this partial or downright bad information into the trading arena and experiences financial loss at the hands of the stock market. Why? Well, just like any other type of stock analysis, "it's never quite as simple as it sounds". Candlestick charting is often touted as a "holy grail" in the world of trading stocks, but nothing could be further from the truth.

While it's true that using candlesticks can give the trader a method determining whether or not a trend may be getting ready to reverse, it's also important to remember that stocks rarely just turn on a dime and reverse course. If you look at a healthy trend on a stock chart, you'll notice the price movement from one end of the trend to the other takes kind of a zigzag course while the overall price movement moves toward the direction of the trend. If you are looking at a candlestick chart, you'll also notice there will be a multitude of reversal signals that mean nothing more than a slight pullback in price as investors take profits, NOT a trend reversal.

So are candlestick reversal signals a viable method of technical analysis? You bet they are! In order to use candlestick reversal signals successfully you need to understand technical analysis in general. There are points of price resistance and support that will show up on the chart and most technical analysts learn them early in their studies. Just like any other method of "predicting" a change in trend, candlestick reversal patterns need to be applied to these areas of support and resistance as well. Once the trader understands the proper application of candlestick reversal patterns they can also see the results in their portfolio.

If you would like more information about candlestick trading or charting please visit http://www.candlestickcourse.com

Most traders at some point in their career realize that they could improve their trading by purchasing educational material to study and expand their knowledge of the market they trade. Whether it is forex, stocks or options, there is enough material available for study on the internet that will fit the bill when it comes to improving ones knowledge on their market of choice. What many traders soon find our however, is many of these courses will cost a considerable amount of money. That doesn't have to be the case if the would-be student is willing to take the time to look around and do their homework.

There are three things the trader should consider when purchasing a trading course; price, content and quality. Yes, it is possible to find a quality trading course that will give you the best of all three of these components. Below you will find an outline of each of these key ingredients to a quality trading course that will not cost you an arm and a leg.

Price - The first component of a quality trading course is price. With many courses costing upwards of five hundred dollars, it's no wonder why many traders feel as if they can't afford a quality course. Nothing could be farther from the truth! There are many courses available that carry a much more reasonable price tag. All the trader has to do is look. There are some courses available for less than fifty dollars that can help the trader learn their craft.

Content - Even more important than price is the content of the course. It doesn't matter how inexpensive a course is if it won't teach the trader to trade or expand their trading horizons. Even some of the more expensive courses have very week content so don't assume that a low price equals poor content.

Quality - How easy is the course to navigate? Does it flow easily from one subject to another or does the course seem to jump from one subject to another without fully explaining each subject first? Does one section build up to the next or is the student forced to skip around in the course to find his way around?

No, a quality trading course doesn't have to cost an arm and a leg but it will take some homework on your part. Once you have found a course that answer the above questions to your satisfaction, don't be afraid to purchase the course...a trader never stops learning.

Mark Jorgenson is an active trader and the owner of the Markets Media Company. Markets Media reviews low cost trading courses for price, content and quality. Don't pay too much for a trading course, visit http://www.markets-media.com

Japanese candlestick charts have been around awhile now but it's still hard to find anyone, except the gurus, who can converse about the subject with any authority. Many have heard of candlestick charting but really don't understand the benefits candlestick charting can provide the trader. Through my years of trading, it has become apparent to me that Japanese candlestick charts had all I was looking for in a trading system that allowed me to profit in the markets. But many traders still haven't taken the proper steps to incorporate candlestick charting into their trading.

As I said before, candlesticks are nothing new. Their signals have been around for hundreds of years as they where used by Japanese commodity traders centuries ago. They don't involve complicated formulas or extensive calculating processes to master the system. Candlestick charting is so simple in fact that I believe the simplicity is the reason most traders give candlestick trading nothing more than a passing glimpse. Most technical analysis strategies today are so complicated that it has all but taken the price patterns out of the equation. Well, price patterns are the root of technical analysis and determining the psychology behind them. Candlesticks do this without the need for fancy indicators or complicated systems.

Most traders who truly investigate candlestick trading and put forth an honest effort into learning the bullish and bearish signals candlestick charting provide will really see a difference in their trading success. Candlestick signals provide extremely accurate results. Whether in stocks, commodities or any other chartable investment vehicle, the results are impressive.

Buy low and sell high is the mantra on Wall St. but most traders fail at this goal because they don't know how to find the low. Buy low and sell lower is what many investors have found to be the case in their trading. But it doesn't have to be that way! Once mastered, candlestick charting will provide the trader the ability to find stocks that are at a bottom or very near to it.

Japanese candlestick charting doesn't take months to master. With practice the patterns can be memorized in a few short weeks and the trader will begin to see these patterns reveal themselves on the charts soon afterward. The most enjoyable aspect of candlestick trading is the patterns begin to stick out like a sore thumb on a stock chart and the trader no longer has to spend as much time analyzing a single stock. The time spent on a single chart is much less so more charts can be studied in a shorter amount of time.

If you haven't tried Japanese candlesticks as a means of analyzing your investments, I urge you to give them an honest try. I believe you'll find them as easy as they are profitable.

Why the Lottery is a Better Investment than Mutual Funds
By Tom Wheelwright

I AM NOT an investment advisor and never hold myself out as one, however my clients continue to ask me how to better prepare for retirement. Should I do an IRA? Should I max out my 401(k) contribution? Should I put more in my profit sharing plan or pension plan? What do I tell them? You may as well invest in the Lottery!

Contrary to popular belief, none of these are wise investments. Why? Among other reasons, they all involve putting money into an investment vehicle over which they have little control as to investment and timing and most people end up choosing Mutual Funds as their investment within these plans. In fact, putting your money into the Lottery would be a better investment.

Really? The Lottery as an investment vehicle? Sound crazy? Gamble my retirement funds away in a government-sponsored game of chance where I have little chance of winning? Where millions of other people are putting in money in hopes of winning the big one? Where most of the money goes to someone else and the chances are strong that I will lose part or all of my money?

Wait a minute - are we talking now about the Lottery or about Mutual Funds? Hmm, a government sponsored program where I have little chance of winning. Sounds like a lot like Mutual Fund investment in a 401(k) or IRA. After all, what are my chances of retiring on Mutual Fund investments? Not very high, actually.

A couple of years ago, I was listening to a financial program on the radio on my way into work. The interviewer was asking the representative of a large Mutual Fund about the performance of the Fund. The Rep responded that the Mutual Fund had risen in value by an average of 20% per year for the prior two years. But when the interviewer asked about the average return to the average investor in the Fund, the Rep responded that the average investor had actually lost 2% per year. Why? Because of the timing of going in and out of the market. Compare this to the Lottery, where everyone knows the exact chances of winning and the exact amount that could be won!

But what about the great tax advantages of putting my money into a 401(k) or an IRA? Yeah, right! Get a tax deduction when you are young and in a relatively low tax bracket so you can pay taxes on the money you take out when you are retired and in a higher tax bracket? Yeah, that's a good deal. Or, consider the difference in tax rates on capital gains and dividends if you are not in a 401(k) or IRA versus the ordinary income tax rates on the earnings when you pull them out of your 401(k) or IRA.

So now you are thinking that you should just invest in Mutual Funds outside your 401(k) or IRA? Wrong again. Mutual Funds result in capital gains taxes when the Fund Managers trade them even though you don't see the money! You have to pay taxes even though the Fund may actually have gone down in value! And what about the lost opportunity cost of that money that you are now paying in taxes that you could have put into other investments? At least with the Lottery, you know the exact amount of taxes you can expect to pay if you win and you only have to pay taxes if you do win.

Yes, you say, but the Lottery is gambling and I have no control over whether I win or lose. You are right. The Lottery is gambling. But so is a Mutual Fund. You have no control over the stock market and neither does the Fund Manager. The market goes down, so does your Fund. At least you recognize that you are gambling when you play the Lottery. You don't have the government, financial institutions and your employer telling you that the Lottery is a good investment. And your employer doesn't go so far as to match the amount you put into the Lottery like it might with your 401(k). Nobody is lying to you about the Lottery being gambling, but those in positions of authority are lying to you about the chances of success in a Mutual Fund!

But surely, you say, there is a better chance of making money in a Mutual Fund than there is in the Lottery? Hardly. There may be less of a chance of losing all of the money you put into a Mutual Fund than there is losing all of the money you put into the Lottery. But you are never going to win big in a Mutual Fund. In fact, Mutual Funds are designed to minimize your returns by creating a "balanced portfolio." If they could minimize your risk of the market itself, this might be okay. But the problem is that nobody can minimize the risk of the market without sophisticated hedge strategies that are not typically used in Mutual Funds. At least with the Lottery, you have a chance of winning big. And you can sleep at night, because you aren't wondering if the chances of winning are going down overnight because of something that happens in Tokyo.

You say you don't like the idea that most of your Lottery gamblings are going to support government programs? Where do you think most of the earnings from your Mutual Fund are going? No, not to support government programs, but rather to support your investment advisor's and the Mutual Fund manager's retirement? You take all of the risk, you put in all of the capital, but most of the earnings from the Mutual Fund go to the Fund manager and your investment advisor. At least with the Lottery, the funds are going to worthy causes, such as the Arts.

Of course, I would never advise a client to rely on the Lottery for their retirement. But neither would I advise them to rely on Mutual Fund investments. For my dollar, the Lottery is a lot more fun and at least I know I'm gambling. But if you want to retire, look at other investments and work with someone who is willing to put in the time to help you retire soon and retire rich. Financial freedom is available to those who are willing to work and learn about it, but not likely for those who want to rely on such risky investment strategies as Mutual Funds.

Warmest Regards,

Tom

http://www.provisionwealth.com

Article Source: http://EzineArticles.com/?expert=Tom_Wheelwright
http://EzineArticles.com/?Why-the-Lottery-is-a-Better-Investment-than-Mutual-Funds&id=886092