Interested in Joining or Creating Investment Clubs?

Investment clubs exist as a group of people who share an interest in the stock market and who pool their resources into one large investment. Many investors are on there own and may not have enough money to invest individually into the stock market, so they opt to join or create a club based on the principle that there is strength in numbers. Investment clubs are a wonderful way to get to know the stock market, make friends, and over time receive a return on investment.  Unfortunately, it is very difficult to join an established club since many of them have been operating for years with the same members. These investment clubs are not likely to grow in membership if they have been operating successfully over time.  This leaves many investors with the only option of creating their own stock market investing club. If you are interested in creating your own club keep in mind that it can take a significant amount of your time and a lot of work to get it up and running.  Below I discuss some factors to take into consideration if you are interested in the undertaking required to create investment clubs.

First of all, you should be sure that participating in investment clubs is right for you personally. If you have never been a member of a club, you may not know the answer to this. Some things to take into consideration may include the fact that you may not always get your way.  Can you handle a democratic forum? Also, are you willing to be an amateur?  Just because you start a club doesn’t mean you will become an expert in playing the stock market overnight. The purpose of investment clubs are to provide a safe learning environment and one that is an ideal atmosphere for beginner investing.  Lastly, are you being realistic?  If you think the only purpose for starting investment clubs is to make a large profit quickly, then you are sadly mistaken.  Not saying that overtime you won’t make a large profit, but there are no guarantees and the level of success depends on many factors.

Still interested in starting one of your own investment clubs? Great!  Below are a few tips to assist in the successful launch of your club.

1) Before investment clubs are formed you must be sure that you have investigated the status under federal, state, and local laws.  It will vary from state to state so you want to be sure that you are compliant.

2) Find compatible members to form your club. You want to have few enough that you don’t have too many schedules to balance and big enough that you allow enough capital to invest so that you actually make money investing in stock. You also want to be sure that your fellow investors share a similar investment philosophy.

3) When creating investment clubs, you also want to be sure that the position of replacements for members who have dropped out, or for newcomers to the club are clearly defined. For example, should the new member be expected to match the total investment of the member he or she is replacing?

4) Determine common goals for the group and decide how much money the club will invest on a monthly basis. This will be a part of determining your clubs investing strategy.

5) Open a bank or brokerage account after you have filled out a Limited Partnership form. (If that is what you choose). Many investors see this as the easiest way to start a business and create investment clubs.

Investment clubs work out great for investors for many reasons. They are a great place to learn how to invest and to learn how to avoid making investing mistakes. You can learn the investment basics and work with members of your group in determining and learning new investment strategies.

Note in our recommendation of IMB. A severe Belthold signal formed as it supported at the 50 day moving average. The Belthold signal indicates the elimination of the recent sellers. The next day experienced mild consolidation, not unexpected after a major reversal. But note what the price was doing today. In the final hour, when the Dow was still down over 100 points, IMB was trading positive. Although it was not trading with any great bullish vigor, it was holding up well in a very weak market. This is not an unusual circumstance after witnessing a strong candlestick buy signal. The investor sentiment was revealed with the Belthold signal. That investor sentiment is usually going to continue even in the face of strong selling in the rest of the market.

IMB

Note the trading action in WCG. For the past three weeks it has just waffled. Nothing of significance was occurring. Yesterday, an obvious Hammer type signal formed. Today's trading is followed through with a very good strength. The price was up 6% when the rest of the markets were trading very weak. Candlestick signals provide high probability visual formations that indicate strength coming into a price. Use this information to your advantage. The signals provide not only strong reversal indications but also alert investors to when new sentiment might be coming into a price trend.

WCG

Commodity Traders - Mr. Bigalow did present the basics of candlestick analysis to the World Cup Advisors webinar Wednesday evening. It is still viewable in their archives. The World Cup Advisors have an excellent program for watching and participating in commodity trading. Mr. Bigalow has been very quiet about this program due to being whipsawed in October. He will be producing a very informational e-book on 'how to trade commodities and currencies with candlestick signals' in the near future. He took his $20,000 account down to $5,800 after being whipsawed. He will be the first to profess that you do not allow an account to do that. After he hunkered down, putting his 20 years of commodity trading rules in place and adhering to them, he has now brought the account back up to the $32,000 are level over the past four months.

A 60% return on the account is what Mr. Bigalow felt was a reasonable return after seven months of trading, but not in the manner in which it was done. Fortunately, some valuable lessons can be illustrated from this Fupaw. The new e-book on 'trading commodities with candlesticks' will touch on the human weaknesses that most investors suffer. You will not have to experience losses if you follow the candlestick patterns correctly and apply the common sense trading techniques that candlestick signals incorporate. The great advantage that candlestick signals provide is a trading format that can produce profits consistently PROVIDED THEY ARE USED CORRECTLY.

Taking big losses in a commodity account illustrates something is wrong. Knowing that the candlestick signals produce high probability situations, the analysis simply becomes analyzing what 'you' are doing wrong. That is what Mr. Bigalow had to do. Step back and ask why am I losing money. You are going to gain the benefit of how to apply the correct mental and mechanical trading techniques to commodities. As always, the information that will be forthcoming will be based upon actual trading experience, not theory. The proof of the pudding is in the results. Using candlestick signals correctly can produce huge profits. As seen in Mr. Bigalow's trading, going from $20,000 to $5,800 is not the right direction. However, going from $5,800 back to $32,000 is a 550% return.

The big advantage of candlestick signals is that they work. Some very simple trading rules will show how to eliminate big losses.  Mastering the trading rules can produce profits in both stock and commodities.  Using the signals correctly will put you in situations where the gains can be very large.

Note chat session tonight, everybody should be with their Valentine.

Good investing,

The Candlestick Forum Team

Valentine's Day Special - 25% OFF!

12 Major Candlestick Signals