Stock Market Investing
A Quick Look at Stock Market InvestingWhen people first hear about the stock market it can be very intimidating. Stock market investing is not an easy way to make money, but if you learn how to do it, and you are good at it, you can make a very good living, if not become very wealthy. You hear of investors who participate in stock market investing and who aim to build a strong portfolio. They also speak of portfolio diversification as a must when learning to invest in the stock market. In order to understand what these terms mean, it is first important to understand some of the basics when stock market investing.
If you want to get started in investing in the stock market, there are a few terms that you should be familiar with. You need to know first that a ticker symbol is a short group of letters that represents a particular stock, for example General Electric’s stock ticker is “GE” and Coca Cola’s stock ticker is “KO.” You also need to know that a “share” in stock market investing represents and investor’s ownership in a portion or “share” of the profits, losses, and assets of a corporation. Shareholders are investors that hold "shares” of stock in a company, and earnings per share is the amount of profit each share of a company is entitled to. A business will “go public” and then carve itself into pieces to sell to investors in exchange for cash. When a company “goes public” it means that that it is selling stock in itself for the first time also known as IPO (Initial Public Offering). When learning about stock market investing you should also know what “market capitalization” is. This is the amount of money that someone would have to pay it they bought every share of stock in a company. This can be calculated by multiplying the number of shares by the price per share.
When stock market investing you should also know that there are three different stock exchanges in the United States. In order for a company to be able to be “listed” on a stock exchange, it must meet the requirements of the exchange in regards to profit, employees, size, and the like. The three exchanges in the U.S. include the New York Stock Exchange (NYSE), the National Association of Security Dealers Automated Quotes (NASDAQ), and the American Stock Exchange (AMEX). During certain times of the year the markets will tend to exhibit behaviors. There are typically strong stock performances in January which is commonly referred to as the “January Effect.” This effect supposedly occurs because a lot of investors choose to sell some of their stock right before the end of the year. They do this so that they can claim a capital loss for tax purposes. It is also said that in the early fall around October, markets tend to slump. No investor knows for sure why these stock market trends occur, however, they still pay attention to them since they have occurred throughout the history of stock market investing.
This article presents a very low-level introduction to the stock market basics. For those of you that are sincerely interested in pursuing stock market investing, the information that is out there is endless. Take your time doing your research, but do it vigorously. Remember it takes money to make money, and invest in stock market investing 101 classes and stock market for dummies books. Good luck!
Market Direction:
What is the biggest bugaboo for most investors? Our own emotions! Have you ever sold a stock at the absolute bottom because you could not stand the pain anymore? Have you ever held onto a stock too long, after having good profits because you were worried the price could go higher, then giving back most of the profits? We all have done that. The proverbial ‘fear and greed’ is what causes most investors from making profits in the markets. Fortunately, candlestick analysis removes emotions out of the investing.
The basis of candlestick signals is the hundreds of years of profitable utilization by Japanese Rice traders. Emotions can be eliminated when investing based upon one simple assumption. The information conveyed by candlestick signals work extremely efficiently, otherwise the signals would not be in use today. Two major advantages are produced by candlestick signals. They are visually easy-to-recognize. Candlestick charts, which are now found on all computer systems today, convey an immense amount of information. Along with the easy visual identification, each signal incorporates a massive amount of investor sentiment. Having the ability to witness where investor sentiment may be changing in a trend is a powerful investment tool. An investor’s profitability is even more enhanced by understanding the nature of the investor sentiment that created the reversal signals. If you can see when a potential trend change is occurring, and you understand 'why' that trend change is occurring, you will then grasp the thought processes professional investors use to produce profitable investing.
Why is it so hard to buy at the bottom? Every investor wants to be able to buy low and sell high. Although that may seem to be an understatement, reality demonstrates that most investors have a hard time overcoming the fear that is associated with stock prices or commodity prices trading at the end of a downtrend. Candlestick signals create opportunities for investors to buy without fear, when the trend is reversing at the bottom. If you can recognize a candlestick 'buy' signal in oversold condition, the probabilities are that the trend is reversing.
The signals clearly illustrate what investor sentiment is doing at important technical levels. Other technical methods indicate where a reversal "may" occur. Candlestick signals reveal what is happening NOW. Using candlestick signals allows an investor to project quite accurately what investor sentiment is doing exactly at those levels. Once you gain the knowledge of how to use candlestick signals correctly, then you create an evaluation format where investment decisions are made based upon probabilities versus hopeful anticipation.
As illustrated in the Dow chart, two weeks ago a few Bullish Harami's indicated a change of the downtrend. Stochastics in the oversold condition made the probability of a reversal that much greater. The fact that Bulls appeared to be supporting the market at the same level where the market reversed back in mid August was another factor.
DOW
Now that the trend has reversed, simple utilization of the major moving averages makes for high probability areas to take profits. This afternoon, the Dow was just approaching the 50 day moving average. Having the ability to recognize what investor sentiment was doing at a projected target makes getting into and out of a trend position that much easier. The emotions are much less involved.
Solar Energy stocks and the China stocks are experiencing bullish participation in a much stronger degree than the rest of the sector's. The strong reversal signals allows the candlestick investor to participate in strong trends in the early stages. There is a dramatic difference in one's mental state when they can identify early where they should be placing their funds. Many times investors jump into strong moving price trends merely because the price is moving dramatically. They have no program of why and when to get in and when to get out. Utilize what the signals are telling you! Knowing how to use the candlestick signals effectively allows you to get into high profit price trends with a definite game plan. You know why you want to enter the trade. You know what to expect to provide a high probability entry confirmation. You know where to set stop losses. And you can reasonably project a potential target. Having this knowledge dramatically improves an investors investment ability.
Holiday specials - The feedback from being able to participate in the live chat room each day and the Monday night training sessions has been extremely positive. To learn how to invest successfully requires knowing the correct trading method . It also requires repetitious confirmation. Both Steve Bigalow and Rick Saddler provide constant valuable insights into how to use the candlestick signals and other indicators successfully. The Candlestick Forum is providing dramatically reduced prices on the information that makes candlestick signals a highly effective trading technique. But it does not end there! The information you obtain on the training CD special's can be reinforced in the chat room with up to six months free access to the Candlestick Forum website. The world economy is growing well. The investment markets should have high profit potential in the coming year. Learn the candlestick analysis concept and you will be able to participate in the high profit areas. Visit the holiday specials of the website homepage.
Online training program - Mark on your calendar, January 19 and 20th 2008. A 2-day training seminar will be presented by Steve Bigalow demonstrating successful investing produced by the correct method for analyzing candlestick signals. Additionally, Rick Saddler will demonstrate how he uses the candlestick signals and other highly effective technical indicators for consistently pulling money out of all the markets on a daily basis. The combination of this information during a full weekend would dramatically solidify your investment perceptions. Details on the trading program will be available in the next few days.
Chat session tonight at 8 p.m. ET - The session is open to everybody. Please come join us and feel free to ask questions. December 13, Rick Saddler will be demonstrating another one of his indicators that has contributed to his successful investing. Do not miss the opportunity to gain more insights on trading techniques that work well.
There will be a public stock chat tonight at 8PM ET. Click here for instructions.
Good investing,
The Candlestick Forum Team
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