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Stock Trading Tips

This article reviews stock trading tips that are useful for every investor. While there are no tricks to trading in the stock market, there are stock market tips that can be applied to save you money. Read the below tips and see if there are any that would be beneficial to you.

Stock Trading Tips #1
Investors must keep in mind that technology is great but it can hinder your success when placing trades. We all know that at times our internet services provider is delayed or slow for whatever reason, and sometimes this slows down or can prevent our orders from reaching online firms. Maybe your modem or computer is slow or the heavy volume of traffic on the site that you use is heavy, therefore slowing it down. These issues and others can cause a delay or failure in investorís attempts to access online automated trading systems. You must be sure that your computer, modem and internet services provider is top notch and in working order, and be sure that the online stock trading system that you use can withstand heavy volumes of traffic. We suggest that you take a trial period with systems of your choice so that you can see the overall performance before committing yourself to one.

Stock Trading Tips #2
Investors must be patient when canceling or placing an order. At times investors think that their order did not go through and they mistakenly place another order. Doing this can result in owning twice and much stock as originally intended, and sometimes actually selling stock that the investors does not own. Stock traders should check with their firm to find out how to handle situations in which they are unsure if an order actually was executed. They should be able to tell you what you should do if this happens when trading stock online

Stock Trading Tips #3
Crucial investment advice in this section is to pay special attention when you read your margin agreement provided by your broker. Your broker has the right to sell your securities at any time, without consulting with you first, if your account falls below the firmís maintenance margin requirement. A margin call is when your broker does call you first, but in many firms it is not a requirement. In fact, in quickly declining markets, your broker can sell your entire margin account because the securities in the account have declined in value, therefore resulting in great loss for the investor. When trading and investing you must keep this piece of information in mind. 

There are many more important stock trading tips in addition to those mentioned above that every investor should know. It is crucial that every trader does their homework, regarding the types of stock trading they are going to practice, the type of stock market trading system to use, and they must also take training courses and stock market training seminars. There is a wealth on information that must be attained before any investor should even think about trading stocks for a living.


Market Direction: There is great indecision in the markets! This was obvious all summer when the Dumpling Top was in formation. That was the prelude to the anticipated downdraft in the market. However, since the market has hit bottom, it has moved sideways again. Todays close in the Dow is almost exactly midpoint of the trading range since the early part of October. Price moves in the market have been fast and furious. This has made positioning very difficult. It has made daytrading much more conducive. When the Dow can move down 700 points in one day and then back up 880 points the following day, being on the right side of the market has become that much more important, especially in the short term trading area.

Today's weakness in the Dow and the NASDAQ, after the potentially good news that China's government was putting out $600 billion to stimulate their economy, clearly revealed the selling sentiment was still the most powerful force. Friday's trading formed a Bullish Harami. This had the potential of indicating the selling had stopped. The selling was a loss of 10% in the Dow the prior two days. What was required to confirm the bullish harami? Indications that the Bulls were still present after Friday's positive trading. The potential was there with a positive premarket futures this morning. The Chinese government stimulus package had the Asian markets trading very strong. The premarket futures were a reflection of that strength. Buying on the strength this morning should have been done with one reservation. The bullish sentiment was required going into the close today. There was two reasons that was required.

When analyzing a candlestick signal, it has to be done in the context of where the stochastics are going. The previous two days of strong selling had the stochastics curled back down in a negative direction. The lack of a strong close today would not have changed the stochastics direction. A strong close would have confirmed the Harami signal and curled the stochastics back up in an upward direction. The next aspect to our analysis was the location of the T. line. A strong close today would have had the Dow closing up above the T. line. A weak close today would have had the Dow closing below the T. line, indicating the T. line was still an indicator that was confirmed to the downside.

DOW

Just because a candlestick signal appears, it is still important to analyze where that signal has occurred in the trend. Other indicators, such as moving averages that are crucial to the current trend evaluation, also need to be taken into consideration. As we observed, the Dow closed lower today after a strong morning. The NASDAQ provided the same visual indication, failing to stay above the T. line and the stochastics continuing to point in a downward direction. Why is this analysis important.

Nas

The premarket futures were confirming a potential candlestick buy signal. However, there were other indicators that needed to be satisfied. Any purchases made this morning should have been closed once it became evident that the markets were not going to maintain a strong bullish day. This allows for getting back out of positions with small losses. It also permits for the establishment of short positions that are confirming their signals.

FTEK is an example of the selling occurring after a candlestick sell signal. It had the potential of holding up above the T. line, potentially forming a general pattern. This was a pattern that many stocks were trying to establish on the bullish day of Friday. However, as witnessed in the FTEK chart, the gap down today, in spite of the bullish premarket futures, clearly illustrated the Bears were in control. The gap down in price, after the selling of the previous three days, that followed the little Doji, made it clear the downtrend was still in progress. It closed very close to the support level of the past 30 days. Looking at the chart allows for easy evaluation of what to do next. The stochastics have curled back down. If it opens lower tomorrow, it would be breaching the support level. This would indicate that more selling is probably in progress.

FTEK

When the market conditions are very hard to understand, an added benefit is knowing which stocks or sectors should be doing the best or worst during this time of year. That becomes another contributing factor for put in the probabilities in your favor. This is called seasonality. Good profits can be made by just knowing which specific stocks and sectors perform well during certain times of the year or after certain events. Unfortunately it is very difficult to gather the data that would prepare in investor for watching specific stocks. Peter Hoyt, cofounder of Best Choice Software has created the best software program available.

There may be some tough economic times ahead. Wouldn't  you like to know which stocks perform the best when the economy is slowing down? Wouldn't you like to know which stocks perform the best or worst when other economies are performing well or slowing down? This is all information that Peter Hoyt has built into his successful trading software program. This program has excellent analytical features and a tremendous amount of valuable information. He will be giving a free presentation tomorrow night Tuesday november 11, demonstrating the benefits derived from seasonality. His program puts a tremendous amount of information at your fingertips and he  has it structured to be used effectively. Do not miss this presentation. He provides some very valuable insights into when and why specific sectors move. Combine this with candlestick signals, and you have a very powerful confirming combination. Click here to sign up for the free seasonality presentation.

Chat session tonight for members at 8 PM ET.

Good investing,

The Candlestick Forum Team


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