Online Investing Tips for the New Investor

Whether you are new to online investing or you need a refresher, below are some tips to get you started or to get you back into the game.

1)  Read the Fine Print – You may decide to go with an online discount broker instead of a full-service broker to keep your costs down. That is definitely okay, but you must read the fine print and be sure that while the advertised cost is lower, there may be other fees here and there that can add up. This is especially true if you do a lot of buying and selling frequently.

2)  There are also many types of brokers available. These include commodities brokers, futures brokers, forex brokers, and investment brokers. Be sure that the broker you select is qualified and that he or she specializes in your area of trading.

3)  Begin online investing with a very small amount of money. If you are new to online trading and investing, be sure that you only initially sacrifice a small portion of money.  Once you are more comfortable and can turn a profit, then begin using larger amounts of money.

4)  Portfolio diversification is a must when online investing. Don’t concentrate on just one method of investing, but rather look into other types of investments such as hedge funds, mutual fund investing, or perhaps real estate investment trusts (REIT).  You should also take into account your risk tolerance as well so that you are comfortable in your investment decisions and can actually sleep at night!

5)  Speaking of investing in mutual funds, many investors opt to add mutual funds to build a strong portfolio. Mutual funds allow you to take a back seat when you may not have the knowledge required to invest in individual stocks. You have the benefit of making money through online investing, but with another person making the decisions for you.

6)  Before you begin to sell and buy stock, be sure that you understand the tax implications. The federal capital gains will jump up and bite you if you are trading on a larger scale. This may be okay for some investors, but new investors should research the tax implications before they begin online investing.

7)  Things will go wrong and often do. The sooner you resolve yourself to this, the better off you will be.  Make the most of your mistakes and don’t succumb to trading anxiety felt by many investors. There will also be things that happen that are completely out of your power, such as software glitches in your chosen trading software, or potential server crashes of your online brokerage firm.  The world is not perfect and problems are inevitable!

8)  Lastly, you must always be on top of your game. You must stay informed regarding trends and those companies that you have invested in. Check out the company’s prospectus, their public filings, and never rely on the “supposed” hot stock market picks.

I think the above information should get you well on your way to begin online investing. There is obviously much more information for you to learn before you begin investing, but hopefully this information will give you a good place to start.  Do your research so that you avoid making investing mistakes and remember to stay focused. Good luck and study hard!

The Dow formed a Stick Sandwich formation. This is not a common signal formation. Do you want to memorize this candlestick signal? Probably not, it does not occur often enough to spend mental time or energy learning all the secondary candlestick signals. What is suggested is to occasionally browse through one of the books that illustrate all the signals. Do not try to remember all the details about each signal. If you just visually recognize the signals that don't occur very often, you can always go back to the reference books and get more information before making a decision.

DOW

The Stick Sandwich signal is a very bullish signal. It will usually occur on big price moves. As we have witnessed in the Dow over the past three days, a 420 point move to the upside followed by a 290 point move to the downside. What is expected when prices or markets have huge moves? Profit taking! Will the magnitude of that profit taking effect investor sentiment? Definitely! Yesterday's sell off took back most of the gains seen on Tuesday. Had the Dow traded lower today, a completely different scenario would be in place. The 50 day moving average once again was acting as resistance. The fact that we saw a Stick Sandwich signal form today produces a complete opposite scenario. The Bulls are still in control after the Morning Star signal of the past five days. Yesterday's trading produced an indecisive status in the markets. Today's trading produced a high probability direction indication. A positive open on Monday is going to indicate the bearish sentiment has been dissipated.

Commodity corner - The equity markets may be picking up strength due to the selling off of many the commodities. Most of the world commodities have had very strong runs over the last six months. Soybeans, cocoa, coffee and wheat have tripled. Crude oil is trading at all-time highs. Now prices are breaking. If crude oil prices start dropping dramatically, that will ease up the bearish implications high gas produce. Being short many commodities right now is the correct strategy. However, when the stochastics get to the oversold condition, look for strong bounces. Keep in mind, investor sentiment has been bullish for the past year in most commodities. When the profit taking is over, that bullish sentiment should make another attempt toward the recent highs.

Crude Oil

Soybeans

Online training session - The next online training session will be April 19 and 20th. This two-day training can be experienced from the comfort of your own home. Steve Bigalow will show how to use the 12 major signals effectively, where they work most effectively, and the psychology behind the formation of those signals. This produces powerful insights into what market directions should be doing. Rick Saddler will also be demonstrating his techniques for utilizing candlestick signals and other technical indicators that allows investors to make a very good living trading the markets from their home. Do not miss out on this opportunity to get valuable information put into your brain in a logical and chronological order. You will not be disappointed with the amount of information you will gain from these training sessions. Sign up today! Seating is limited. Click here for more details.

There will not be a public stock chat tonight; enjoy the long weekend.

Good investing.

The Candlestick Forum Team