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Learn Online Stock Trading

Investors who would like to learn online stock trading should take a few minutes to read this article. This article explains the pros and cons to online stock trading so that each and every stock trader can invest wisely online. It is important to note that while there are cons to investing online, as long as you are aware of them, you should be able to overcome them.

In order to learn online stock trading likes the professionals, you must first be aware of the disadvantages involved. The best stock traders are aware of the fact that sometimes commissions charged by various brokerage firms can be misleading. For example, some firms will charge membership fees in addition to the advertised commission fees. Also, some firms charge a flat fee, as a percentage of the trade value, which end up being higher than the commissions available by other firms. On the other hand, online stock trading offers lower commission fees than originally available to investors due to the advent of the internet. There are so many stock brokers available online these days, that it has caused commission rates to be very competitive. Basically, each investor must be sure to research all possible firms and they must fully understand all of the fees associated with each. Many investors opt to go with online discount brokers, once they are more experienced in their trading methods.

To learn online stock trading also means that each investor must know how to obtain the required information to trade successfully. Luckily we are in the information age, as a result of the internet, and information is the key to successful trading. The problem now is the large amount of information provided and being able to discern between what is considered pertinent and useful information and information that is incorrect or misleading. In addition to finding valuable information, each investor must be sure find a stock trading software that is affordable and reliable. In order to facilitate this, investors will often reach out to fellow investors for referrals. With the advent of the internet, investors can now join online forums so that their fellow investors can help them weed through all of the software packages available in order to find one that is a good fit. Many successful investors will recommend that traders join some sort of trading network for this and many more reasons.

To learn online stock trading also means to understand that with online trading comes great power and great risk! When trading stock online you do not have to provide a broker an order to purchase a minimum number of shares, but instead can trade as many or as few shares as you would like. This can be seen as a disadvantage and an advantage depending upon the experience level of the investor. More experienced investors typically prefer this method so that they donít have to go directly through a live broker, while novice traders may need that extra hand holding at first. In addition, many investors will implement a stop loss order themselves because it is not feasible to provide this information to a live broker, specifically when day trading or swing trading. Things happen too fast so investors must adopt a plan to implement a stop loss order themselves, and more importantly they must have the discipline to exercise this order! 

There are many additional advantages and disadvantage to trading stock online. Each investor must be sure to research as much as possible so that they understand exactly what they are getting into. Online investing is a great way to make a living or to bring in additional income. The key is to ensure that first you take the time to invest in yourself through receiving a thorough online investing education.

Market Direction:

Candlestick analysis can be utilized to take advantage of all other technical trading tools. The evaluation of a trend can be much more effectively assessed when witnessing where candlestick signals are occurring. This creates two beneficial functions. First it allows for a much clearer understanding of what a trend is doing. It is a trend in a downtrend, uptrend, or choppy sideways? That becomes much easier to visually interpret when using candlestick formations. The second function is being able to identify exactly where a short-term price move is ending. For the shorter-term trader, this becomes a very valuable tool.

Applying very simple trading rules/observations, with candlestick signals, allows for an investor to make profitable trades with a much higher degree of accuracy. As illustrated in the Nuance Communications Inc. chart, the downtrend had obvious features. Each time a bottom formed in the downtrend, a bounce from that level did not create a new high. The failure of a bounce produced a new low. This makes the assessment fairly easy. If short in a downtrend, the covering of a short position might be followed by a reestablishment of that short position when a candlestick sell signal appears. What signifies the potential reversal of the downtrend? When the next downtrend does not breached the previous low. This can be seen at the first of August when a Morning Star signal stopped the downtrend well before the previous low.

This development now produces a new scenario. The downtrend may be over and a new uptrend may be starting. Although this is not a earthshaking revelation, it allows the candlestick investor to anticipate which trends may be the longer and stronger. The downtrend produced small uptrends followed by much larger downtrend's. The reverse should now be true if an uptrend is in progress. The lack of a lower low is the first indication. The NUAN chart is now showing a breach of the 50 day moving average. If it continues higher before the next pullback, a higher low it is now followed by a higher high. Having the ability to identify the reversal signals is a major benefit for most investors. Having the ability to anticipate the magnitude of each wave makes trading more comfortable.



Good investing,

The Candlestick Forum Team

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