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Investment Firms

Investment Firms Online

Investors who shop online for stock and bonds already have an account with an investment firm. For new investors, the hard part is figuring out which firm to go with because there are so many available on the internet. The great thing about shopping for stocks and bonds online is that the investor can utilize the services on a brokerage firm all day long and there is no hurry. This article provides tips for finding firms that are legitimate and in good standing.

There is a computerized database that contains information about most stock brokers, their representatives, and the investment firms that they work for. This database is called the Central Registration Depository (CRD) and it can tell you whether or not brokers are licensed in your state, and if they have had any complaints or issues with regulators. It can also tell you information about investment advisors including their educational background and their prior investment firms. It is important to find out if the firm is registered, because if it is not, there may be no way for you to recover your money if the firm goes out of business.

Investment firms generally provide services by providing you with an investment advisor who in turn provides the services of their representative. This representative and the investment advisor must also register with the SEC and you can research them by reading their registration forms called ADV. This form is composed of two parts including, information about their business and any past issues with clients, as well as the services they provide, their fess and their investment strategies.

When utilizing the services of investment firms, additional investment advice is to ensure that its representatives are members of the Securities Investor Protection Corporation (SIPC). This corporation provides customer protection in the event of the brokerage firmís insolvency. Those firms that are not SIPC members, cannot provide coverage if the firm goes out of business, even if it goes to court.

Additionally it is also important to make sure that these online trading firms have protected their sites. Investment firms should encrypt the sites to make sure that no one else knows what the investor bought and sold in many of the stock exchanges available. Also, many of the investment accounts through these firms have it set up so that profits are directly deposited in to the investorís savings account. Thus, confirming the importance of having a secure site. In fact, many investors manage their banking through online accounts, provided by these firms, because that gives them the ability to move large amounts of money right from the comfort of their own home.

The selection process involved with finding investment firms is not a process to take lightly. What good are your investments if they are not backed by a strong firm that will protect your hard-earned money? Research different firms, ask for references, and ask around to fellow investors for referrals to ensure that your money is safe.


Market Direction: A Bearish Engulfing signal in the oversold condition, what does that mean? The benefit candlestick analysis provides is the understanding of what investor sentiment usually does in certain conditions of a trend. The Japanese Rice traders spent centuries analyzing the signals in specific situations. A Bearish Engulfing signal in the overbought condition has a significantly different meaning than witnessing a Bearish Engulfing signal in the oversold condition. Each signal is an interpretation of investor sentiment. Investor sentiment can be dramatically different with the same signal at opposite ends of a trend. A Bearish Engulfing signal in the overbought condition illustrates the bears are starting to take control. A Bearish Engulfing signal in the oversold condition illustrates last gasp selling.

Having this knowledge allows the candlestick investor to prepare for the next trend move. As illustrated in the Dow chart this week, there was the formation of a Doji followed by a Hammer signal. Those are indications of a possible change of investor sentiment. Wednesday's trading created a Bearish Engulfing signal. In most investors' eyes, this would represent the continuation of a downtrend. However, witnessing some potential reversal signals, followed by a Bearish Engulfing signal in the oversold condition, creates an expectation to the candlestick investor. The appearance of a Bearish Engulfing signal alerts the candlestick investor to watch for another buy signal.

DOW

Although the trading was very light on the day before the long weekend, investor sentiment still has to be accounted for. There were buyers in the light trading market. A Bullish Harami was formed. This signal illustrates the selling should have stopped. The next step in the analysis is knowing what to expect after a Bullish Harami. A positive open on Monday would be confirmation the Bulls were coming back into the market. That is what should be anticipated. The establishment of positions based upon that result creates a high probability of being in the right direction at the right time. Conversely, if the pre-market futures show weakness on Monday, the entry strategy immediately becomes different. This may seem like a very simplistic explanation but that is exactly what the candlestick investor gains from knowing what the signals represent.

Simple trading rules make it easy to enter or exit positions without the emotional hang-ups. Many investors are concerned about getting into a position at the exact right time and getting out at the exact right time. Candlestick analysis looks at investing with a completely different point of view. The emphasis is put more on maximizing the profits for an account versus maximizing the profits on each trade.

For the investor that only wants to trade long, candlestick signals have a built in money management system. In a declining market, a candlestick sell signal followed by a close below the tee line illustrates when it is time to come out of a position/take profits. There will be sectors moving strong in a declining market. However, even the strong sectors will start losing ground once the general market sentiment continues to show bearish inclinations. This does put cash in the account, ready for the next buying opportunity.

Simple entry strategies produce higher probabilities for being in the right trade at the right time. That strategy may consist of merely witnessing continued buying strength after a candlestick buy signal. However, in a declining market, the number of bullish confirmations will diminish. This is merely a function of the lack of buying pressure when the general market is heading down. This creates a very simple money-management function. It keeps investors cash positions maintained. Less new long positions are established in a declining market. A further the general market declines, the bigger the buildup of cash. The simple rules applied to candlestick signals create a natural money-management system. If an investor does not like to go short in a declining market, they will at least be heavy in cash when the bottom signals finally appear. Learn how to use the signals effectively. They not only provide excellent entry and exit strategies; they also dramatically reduce the influence of our own emotions. The mechanics of candlestick analysis allows for taking profits at the tops and accumulating cash when reaching a major bottom.

No chat session tonight or Monday night due to travel conflicts.

Good investing,

The Candlestick Forum Team


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