Selecting An Options Trading Advisor

August 28, 2019 by Leave a Comment

Selecting an options trading advisor is an important step in preparing to trade options. Before we break down the different types of accounts, let’s talk with the beginners first. If you have experience investing in the stock market, you probably already know that you can trade options with you current account.

Selecting An Options Trading Advisor

For the beginner, this is a very important step. In fact, selecting an options trading advisor and creating a stock trading plan are the two most important things you can do prior to entering the market. The critical factors in selecting an options trading advisor are:

  • Knowing Yourself – Be honest in evaluating your tendencies; are you a risk taker? Do you like to study and do research? Do you enjoy the idea of investment risk? Do you realize that you have more dollars than sense? You know the answers to questions like these; it is important that you understand your tendencies because there are options trading advisors for every personality type.

  • Knowing The Available Advisors – Sounds difficult but once you have done a self-evaluation, you are well on your way to finding the right options trading advisor for you. Investment firms offer a number of different accounts types based on the needs you have.

What Are The Different Types of Accounts?

Trading accounts vary based of level of service, cost and available resources. The list below will give you an idea of the different types of accounts available:

  • Discount Trade – This type of account is intended for the experienced trader; you will not have the security of an options trading advisor. Because you will be calling your directly to the order desk or the floor, you will receive nearly instantaneous placing of orders. The commissions for discount trades are low but little is available as far as research or recommendations from an options trading advisor.
  • Internet Trade – Is it important to you to talk with an options trading advisor? If not, Internet trade may be the way for you to go. You can place trades, cancel replace orders, view your account status and get real time quotes, all with the click of your mouse. Since you are handling your own account, commissions are low, ranging from $10 to $40 per transaction. Like discount trades, this isn’t recommended as the best alternative for beginners because there is little support beyond implementing positions.
  • Broker Assisted Accounts – If you have some experience in the stock market but still need the guidance of an options trading advisor, this is an excellent option. In addition a beginner who is extremely disciplined and dedicated to learning might be interested in this level of support. Options trading advisors are available to help you with information, advice, placing orders and charting. Prices are in the $50 range per transaction which falls directly between discount trades and full service brokers.
  • Full Service Recommendations – With this type of options trading advisor you will likely be on a first-name basis, since he or she will probably be assigned to your account. Such advisors will be able to help you form an investment philosophy as well as placing trades, offering investment advice and reviewing your individual trades. This is the most expensive option but the best for the beginner or the investor that doesn’t want to spend the time to research and chart potential positions. Commissions for a service such as this range upwards of $100.
  • Day Traders – Do you want to participate in the lightening quick trading of day trading? If you want to regularly trade in and out of positions on the same day? If you are committed to turning your positions everyday, this is a good account for you. Commissions are reasonable and range from $10 to $25.

Conclusion

Along with the trading rules in your stock trading plan, selecting an options trading advisor and trading account will likely be your most important decisions in the stock market. Analyze your personal approach and tendencies and select your options trading advisor based on your needs.

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Commodity Swing Trading Made Easy with Candlestick Signals

August 28, 2019 by Leave a Comment

Commodity swing trading is usually considered high risk investing. That is not necessarily so when utilizing candlestick signals. A major advantage that commodity swing trading has over stock swing trading is the consistency of a trend move. Commodity trends usually work in a more consistent fashion. The reason is very simple. There are less outside influences on a commodity price than there is on a stock price. Most commodities are affected by merely supply and demand. This makes commodity swing trading a little easier to implement than stock trading. Whereas a swing trade in stocks may be a 2 to 10 day trading period, commodity swing trading might experience holds of 5 to 20 trading days.

Stock prices have many more influences with which to contend. The market move in general, interest rates, crude oil prices, the US dollar, and a multitude of other influences that may change the trend of a stock price. Candlestick reversal signals provide excellent points to be buying in stocks. The reversal signals work that much better with commodity prices. Commodity swing trading gains the benefit of seeing where a reversal will occur and then knowing the new trend should provide a steady move from that reversal.

Keep in mind, Japanese candlesticks signals were developed with the most basic of commodities, Rice. Learning how to utilize the 12 major candlestick signals is the first step for putting investment funds into high probability trades. Commodity swing trading has the advantage of steady price moves as well as price patterns. The same patterns that are utilized in stock trading, such as the Jay-hook pattern, the scoop pattern, the cradle pattern, etc. work equally well with commodities. Learn the 12 major signals and you will understand where the high probability buy and sell points will be. Once you have become familiar with the signals, then move on to learning price patterns. Price patterns while incorporating candlestick signals dramatically improve the probabilities of being in high profit trades. Click here for the 12 major signals training CD special.

The profits that can be produced in commodity swing trading are extremely large. The risk of trading high leveraged trading entities becomes minimized when knowing what the candlestick signals are revealing. They produce a confidence to buy at the bottom and sell at the top. They also clearly demonstrate where a stop loss points should be placed. Having this knowledge allows an investor to take advantage of any trading market. Participating in the right direction at the right time is very critical in commodity swing trading. As illustrated in the soybean buy signal, the Bullish Engulfing signal, late last week created the opportunity to be in to a very profitable trade.

Commodity Swing Trading, Soybeans

July Soybeans

Market Direction

Both the Dow and the NASDAQ failed their major moving averages. The Dow was going to come back up and tests the 50-day moving average once more but showed a Doji on Friday followed by strong selling on Monday. The first indication early last week of coming down to test the 200-day moving average is now back in the a valuation. This coincided with a failure of the NASDAQ at the 200 day moving average. Both now have their stochastics turning back down. Keep in mind; this is the evaluation of investor sentiment at important technical levels. As of now, all indications are that prices are going to move down to the next important technical levels.

Commodity Swing Trading, Soybeans

DOW

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2011 Stock Market Holidays

August 28, 2019 by Leave a Comment
2011 Stock Market Holidays Date
Martin Luther King, Jr. Day January 17,2011
Washington’s Birthday/Presidents’ Day February 21,2011
Good Friday April 22,2011
Memorial Day May 30,2011
Independence Day July 4, 2011
Labor Day September 5, 2011
Thanksgiving Day** November 24, 2011
Christmas December 26, 2011
**The NYSE Trading Floor closes early (1PM ET) on
Friday November 25,2011 (The day after thanksgiving)

Remember, the professional money managers often vacation around scheduled exchange holidays.
They may also close positions several days before, causing lighter volume around the stock market holidays.

Unpublished Special – Not Found anywhere else in our website!

For a limited time we are offering an exceptional opportunity to receive a 2-Week Free Trial Membership to The Candlestick Forum.

To participate  – simply send an email to Abraham@candlestickforum.com with the subject line: 2-Week Free Trial Membership. You will receive an email with full instructions to join as our Guest and access Free Downloads valued over $335 in educational tutorials! (no credit card information will be requested, you are our Guest)

Look at Membership Benefits with over $335 worth of immediate free downloads to
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Commodity Trading Signals

August 26, 2019 by Leave a Comment

Learning commodity trading signals will open the door to profits in trading commodity futures. Commodity and Futures Training using Candlestick chart patterns allows traders to learn what Japanese rice traders knew centuries ago. The market can tell you what the market will do if you learn how to read the commodity trading signals. There are a dozen Candlestick patterns that traders should commit to memory and another 28 that can reliably predict market behavior. Candlestick charting techniques have a long and successful history of predicting commodity market movement. Candlestick trading tactics are like most tactics derived from technical analysis. Candlestick basics predict market activity and the trader either buys or sells commodities based on the insight derived.
Successful commodities traders start with a solid foundation of fundamental analysis of the commodity or commodities that they trade. There are reasonable limits to prices on a commodities exchange. Knowing where these limits are will help guide successful commodities trading. Within the extremes technical analysis tools can give solid commodity trading signals. Major Candlestick signals include the Doji, Bullish Engulfing, and Bearish Engulfing signals. Candlestick chart analysis can also be done with time honored commodity trading signals such as the Tri Star Pattern, the Three Black Crows, the Three Identical Crows, and the Two Crows patterns. All of these are secondary patterns typically indicating market reversals. A Commodity and Futures Training class will help the beginner learn both the fundamental and technical aspects of the commodities markets.

Commodity trading signals can be useful to both the companies buying commodities or the producers in hedging investment risk. Trading signals may be more useful to traders who routinely buy and sell commodities or who trade options on commodity futures. Although those hedging risk in the commodities markets may buy and sell once or twice a year the trader can and will watch the market throughout the year and throughout the day looking for commodity trading signals that will lead to profit. The addition of traders speculating on commodity prices adds volume and liquidity to the market leading to more traders trading and increasing volume. It is with high trading volume and liquidity that commodity trading signals work the best and are most profitable when followed.

Technical trading works best when applied through a trading strategy. The trader will learn with time which trading signals can be used to make the most profit. With experience the trader can learn more and more efficient execution of the trading strategy. The trader will learn which commodities he or she trades most effectively and which trading signals derived from Candlestick charts are most predictive of market changes for the commodity in question. With competent instruction the trader can learn effective use trading signals coupled with the use of techniques such as Candlestick trading tactics to make consistent profits. At the same time proper reading of market signals will help reduce risk while enhancing return on investment. For those interested in trading options on commodity futures a good choice is to take options training with Stephen Bigalow.

Market Direction

Investor sentiment is the force that moves prices/markets. Candlestick signals reveal the nature of investor sentiment. The signals work extremely well on their own. However, an investor can glean an immense amount of information utilizing candlestick signals and the other obvious information a chart is revealing. Today, the markets experienced a severe selloff on the open. This made for further confirmation of the possible reversal in the trend if you include the Evening Star signal that formed in the Dow last week. How does one know whether it is time to close out long positions when the market opens lower like it did today? They don’t! But they have to take a look at what was affecting the trend to this point. The tee line has acted as support for this uptrend for the past two months. That fact has to be put into the evaluation.

The longer a trend remains in existence, the more severe the reversal signal needs to be. Recently the markets have been reacting to positive or negative earnings reports on a daily basis. The overall trend has remained consistently above the tee line. The severe selling on today’s open was scary. However, up to this point, the trend had been fairly solid. It is prudent to not react until the daily signal confirms there has been a change of investor sentiment. As was witnessed today, the buying came back into the markets after about one hour of languishing near the lows. The intraday charts should have been utilized to see what the trend was doing. If the five-minute chart demonstrated a lengthy flat trading range, there is extreme hurry to close out the positions. They are probably already trading off after the selloff. If the markets appeared as if they were going to close at the low end of the trading range by the end of the day, then you could be selling those positions, probably at approximately the same level as were they were trading one hour after the open.

Commodity Trading, Dow Example

DOW

If the Bulls step back in, as they have done for the last two months, and close the markets above the tee line, a very simple assumption can be made. The uptrend is in progress as long as they cannot close it below the tee line.
Waiting to see what investor sentiment is doing after any price opens becomes a very prudent entry and exit strategy. As seen in the TLEO chart, it opened positive. It also started selling off immediately from that level. What should be witnessed after a candlestick buy signal? Continued buying! In the case of TLEO, there is nothing wrong with waiting one or two minutes to see if the buyers are still participating after the price opens positive following day candlestick buy signal.

TLEO, commodity trading

TLEO

@How the markets closed today would be very important for indicating what was occurring an investor sentiment. Obviously a close at the lower end of today’s trading range would reveal the tee line had not acted as support. You do not have to buy at the absolute bottom or sell at the absolute top. Your entry and exit strategies should include practices that improve the probabilities for profiting from that trade.

No Chat Session Tonight due to Traveling

Good Investing,
The Candlestick Forum Team

 

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The History of Japanese Candlesticks

August 26, 2019 by Leave a Comment

Throughout Candlestick Analysis you are going to find many war-like references. Between 1500 and 1600 the territories of today’s Japan were at constant war. Each daimyo (feudal lord) was in constant contention to take over their neighbor. This one hundred year period is known as Sengoku Jidai or the “Age of Country at War”. This was a definite period of turmoil. It slowly came to order in the early 1600’s through three dynamic generals – Nobunaga Oda, Hideyoshi Toyotomi, and Leyasu Tokugawa. Their combined leadership prowess has become legendary folklore in Japan’s history. Their achievements are described as: “Nobunaga piled the rice, Hideyoshi kneaded the dough, and Tokugawa ate the cake.” All the contributions from these great generals unified Japan into one nation. Tokugawa’s family ruled the country from 1615 to 1867. This become known as the Tokugawa Shogunate Era.
While the Candlestick methodology was being developed, a military environment persisted in Japan.

Understandably, the Candlestick technique employs extensive military terminology for its explanations. Investing is correlated to battle. It requires the same tactical abilities to win. The investor has to prepare for winning trades as a general prepares for battle. A strategy is required, the psychology of coming events have to be thought through. Competition comes into play. Aggressive maneuvers and strategic withdrawals are required to eventually win the war – to achieve financial success.

As stability settled over the Japanese culture during the early 17th centuy, new opportunities became apparent also. The centralized government lead by Tokugawa diminished the feudal system. Local markets began to expand to a national scale. The demise of local markets created the growth of technical analysis in Japan.
Osaka became regarded as Japan’s capital during the Toyotomi reign. Its location near the sea made it a commercial center. Land travel was slow and dangerous, not to mention costly. It became a natural location for the development of the national depot system, assembling and disbursing supplies and market products. It rapidly evolved into Japan’s largest city of finance and commerce. Osaka, the “Kitchen of Japan” with its vast system of warehouses, eventually established an atmosphere of price stability by reducing regional imbalances of supply. Osaka became the profit center of all Japan, completely altering the normal social standards. In all other cities the quest for profits was despised. Japan was composed of four classes, the Soldier, the Farmer, the Artisan, and the Merchant. It was not until the 1700’s that the merchants broke down the social barrier. “Mokarimakka” which means ” are you making a profit?” is still the common greeting in Osaka today.

Under Hideyoshi’s reign, a man named Yodoya Keian become a successful war merchant. He had exceptional abilities to transport, distribute and set the price of rice. His reputation become so well known, his front yard become the first rice exchange. Unfortunately, he became very wealthy. Unfortunate because the Bakufu (the military government lead by the Shogun) relieved him of all his fortune. This was done based upon the charge that he was living a life of luxury beyond his social rank. This was during a period in the mid 1600’s when the Bakufu was becoming very leary of the merchant class. A number of merchants tried to corner the rice market. They were punished by having their children executed. They were exiled and their wealth was confiscated.

The Dojima Rice Exchange, the institutionalized market that developed in Yodoya’s front yard, was established in the late 1600’s. Merchants were now capable of grading the rice, and negotiated setting the market price. After 1710, actual rice trading expanding into issuance and negotiating for rice warehouse receipts. These become known as rice coupons, and were the first forms of futures. The Osaka rice brokerage became the foundation for the city’s wealth. 1,300 rice dealers occupied the Exchange. Due to the debasing of coinage, rice became the medium of exchange. A daimyo in need of money could send his surplus rice to Osaka and get a receipt from a warehouse. This receipt (coupon) could then be sold. As with many daimyo, cashflow problems could be eliminated through this method. Sometimes many future years of crops were mortgaged to take care of current expenses.

With the rice coupon becoming an actively traded entity, the Dojima Rice exchange became the world’s first futures exchange. Rice coupons were also called “empty rice” coupons, rice that was not in physical possession. Rice futures trading became so established in the Japanese marketplace, that in 1749, 110,000 bales (rice traded in bales) were freely traded while there were only 30,000 bales in existence throughout Japan.

It was during this time period that Candlestick trading became more refined. Candlestick analysis had been developed over the years simply due to the tracking of rice price movements. However, in the mid 1700’s they were really fully utilized. “The god of the markets” Homna came into the picture. Munehisa Homna, the youngest son of the Homna family, inherited the family’s business due to his extraordinary trading savvy. This at a time when the Japanese culture, as well as many other cultures, thought it common that the eldest son should inherit the family business. The trading firm was moved from their city, Sakata, to Edo (Tokyo). Homna’s research into historic price moves and weather conditions established more concrete interpretations into what became known as Candlesticks. His research and findings, known as “Sakata Rules” became the framework for Japanese investment philosophy.
After dominating the Osaka rice markets, Homna eventually went on to amass greater fortunes in the Tokyo exchanges. It was said that he had over one hundred winning trades in a row. His abilities became legendary and were the basis of Candlestick analysis.

Japanese Candlestick analysis was never a hidden or secretive trading system. In was successfully used in Japan for hundreds of years. It has been only recently, about 25 years ago, that it first made its way into the U.S. trading community. Until then, there just wasn’t any interest from Western cultures to investigate the Candlestick Technique. Even then, it was not noticed all that much. The perception has been that it was difficult to learn and very time consuming. That may have been true until recently. The first books introducing it into the U.S. trading arena would describe how to make wooden boxes that were backlit. Then the chart graphs could be better viewed. Fortunately, the advent of computers and computer programming has taken Candlestick analysis ahead by leaps and bounds.
Until recently, the investment community knew about Candlesticks, they just didn’t know how to use them effectively. Interest has been increasing dramatically now that the roaring markets have collapsed. Investors, new and old, are now trying to investigate methods that protect them from the severe losses that occurred from March 2000 until now.
Hundreds of years of analysis and interpretation can be much more easily extracted through computer programming. Huge fortunes were amassed with simple charting techniques. The same will be true with all the benefits that computer software provides the investor today.

The interest in candlestick signal analysis in the United States has to be credited to Steve Nison. Over three years of extensive research produced Steve Nison’s initial publication “Japanese Candlestick Charting Techniques”, published in 1991. Much of the background and historical information about candlesticks, found in this site and many other sites, was probably the results of Steve Nison’s excellent research.

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Candlestick Pattern Formations

August 25, 2019 by Leave a Comment

Japanese Candlestick charting dramatically increases the information conveyed to the visual analysis. Each candlestick trading formation or series of formations can clearly illustrate the change of investor sentiment. This process is not apparent in standard bar chart interpretation. Each candle formation has a unique name. Some have Japanese names, others have English names.

Single candles are often referred to as YIN and YANG lines. These terms are actually Chinese, but are used by Western analysts to account for opposites; in/out, up/down, and over/under. INN and YOH are the Japanese equivalents. YIN is bearish. YANG is bullish. There are nine basic YIN and YANG lines in Candlestick analysis. These are expanded to fifteen to cover all possibilities clearly. The combination of most patterns can be reduced to one of these candlestick patterns.

Long Days Candlestick Pattern

Long days

A long day represents a large price move from open to close when candlestick charting. Long represents the length of the candle body. What qualifies a candle body to be considered long? That is a question that has to be answered relative to the chart being analyzed. The recent price action of a stock will determine whether a “long” candle has been formed. Analysis of the previous two or three weeks of trading should be a current representative sample of the price action.

Short Days Candlestick Pattern

Short Days

Short days can be interpreted by the same analytical process of the long candles on candlestick charts. There are a large percentage of the trading days that do not fall into either of these two categories.

Maruboza

In Japanese chart analysis, Marubozu means close cropped or close-cut. Bald or Shaven Head are more commonly used in candlestick analysis. It’s meaning reflects the fact that there are no shadows extending from either end of the body.

White Marubozu Candlestick Pattern

White Maruboza

The White Marubozu is a long white body with no shadows on either end. This is an extremely strong pattern used in stock analysis. Consider how it is formed. It opens on the low and immediately heads up. It continues upward until it closes, on its high. Counter to the Black Marubozu, it is often the first part of a bullish continuation pattern or bearish reversal pattern. It is called a Major Yang or Marubozu of Yang.

White Marubozu Candlestick Pattern
Black Marubozu

A long black body with no shadows at either end used in Japanese Candlesticks is known as a Black Marubozu. It is considered a weak indicator. It is often identified in a bearish continuation or bullish reversal pattern, especially if it occurs during a downtrend. A long black candle could represent the final sell off, making it an “alert” to a bullish reversal setting up. The Japanese often call it the Major Yin or Marubozu of Yin.

Closing Marubozu Candlestick Pattern

Closing Marubozu

A Closing Marubozu has no shadow at it’s closing end. A white body will not have a shadow at the top. A black body will not have a shadow at the bottom. In both cases, these are strong signals corresponding to the direction that they each represent.

Opening Marubozu Candlestick Pattern
 
Opening Marubozu

The Opening Marubozu has no shadows extending from the open price end of the body. A white body would not have a shadow at the bottom end , the black candle would not have a shadow at it’s top end. Though these are strong signals, they are not as strong as the Closing Marubozu.

Spinning Top Candlestick Pattern

Spinning Top

Spinning Tops are depicted with small bodies relative to the shadows. This demonstrates some indecision on the part of the bulls and the bears. They are considered neutral when trading in a sideways market. However, in a trending or oscillating market, a relatively good rule of thumb is that the next days trading will probably move in the direction of the opening price. The size of the shadow is not as important as  the size of the body for forming a Spinning Top.

Doji

Doji

The Doji is one of the most important signals in candlestick analysis. It is formed when the open and the close are the same or very near the same. The lengths of the shadows can vary. The longer the shadows are, the more significance the Doji becomes. More will be explained about the Doji in the next few pages. ALWAYS pay attention to the Doji.

The dimension of knowing what the formations signify magnifies the potential for profits. The bodies, unlike the bars of bar charts, reveal an immense amount of information.

On to Candlestick Research              Go To Products on Trading Candlestick Patterns

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Buying Calls – Bullish Options Trading Strategy

August 25, 2019 by Leave a Comment

Buying a Call is a decidedly Bullish position on an underlying stock value. The investor has the opportunity to participate in the rise of the stock’s value for the term of the contract with a predetermined risk. Most investors will look to sell their contract at a profit, while others may intend to exercise their right and purchase the underlying shares.

To exit a call you have three options. You may let the call expire worthless (lose the premium paid for the option). You may exercise the call at the agreed upon strike price, and turn around and sell the stock at the current market price and profit from the difference. You may sell your call when it rises in premium in tandem in the rise in the under lying stock value.

The main benefit of buying a call is the limited risk of capital. The investor has a much smaller cash layout, with a limited downside loss, and unlimited upside gain. On the flip-side, the option investor does not have the same rights of the individual shareholder such as dividends and voting rights.

In theory, the potential profit on a long call is unlimited as long as the underlying value continues to rise. The potential loss is limited to the premium paid for the contract.

Buying Calls is a long call strategy that is best used in a bullish market where a rise in the price of the underlying stock is anticipated.  By electing to purchase a long call option instead of the under lying stock, you increase your leverage and reduce the inherent risk of the trade. The most you can lose on your purchase is the cost of the premium. Buying Calls can be a great way to increase your participation in certain stocks without tying up a log of funds. Options allow you to control a larger number of shares for less capital.

The Chicago Board Options Exchange (CBOE) provides this concise definition for Buying Calls. Buying an equity call gives the owner the right, but not the obligation, to buy 100 shares of underlying stock at a specified price (the strike price) at any time before a specific time (the expiration date). This is a bullish strategy because the value of the call tends to increase as the price of the underlying stock rises, and this gain will increasingly reflect a rise in the value of the underlying stock when the market price moves above the option’s strike price.

The profit potential for the long call is unlimited as the underlying stock continues to rise. The financial risk is limited to the total premium paid for the option, no matter how low the underlying stock declines in price. The break-even point is an underlying stock price equal to the call’s strike price plus the premium paid for the contract. As with any long option, an increase in volatility has a positive financial effect on the long call strategy while decreasing volatility has a negative effect. Time decay has a negative effect.

Return to main Options Trading Category

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Hot Penny Stocks

August 25, 2019 by Leave a Comment

Hot penny stocks are those stocks that trade from .001 of a penny to $5.00. They are extremely risky yet they have remarkable reward potential. Penny stocks are referred to as over the counter stocks because they are listed on the Over the Counter Bulletin Board.

To qualify as a penny stock, the stock must meet four criteria.

  1. The stock must be priced below five dollars.
  2. The stock is not traded on a national stock exchange or on the NASDAQ.
  3. The stock may be listed on the “pink sheets” the NASD or the OTC Bulletin Board as explained above.
  4. Lastly, the company that issues the stock must have less that $5 million in tangible assets and must only have been in business less than three years.

Many investors buy penny stocks considered “hot penny stocks” because it does not take a large investment to get started. They give the average investor the opportunity to obtain a significant number of shares without having to invest a large chunk of their hard earned money. In other words it provides the successful trader the ability to turn a relatively small investment into a large fortune. This is precisely why hot penny stocks are so popular. The downside of course is that the volatility of shares and the lack of corporate transparency that can quickly make a penny stocks worthless.

It is important to note that the true value of a company and the price of their hot penny stocks are not always necessarily indicative of each other. In fact, most penny stocks are at the developmental stages and have been overlooked by the investment community for reasons unknown. While this has given penny stock investing a bad reputation, there are those penny stocks that truly represent a legitimate investment opportunity. Those are the best penny stocks that you need to find! There are actually studies that show that many companies have standards that they must meet before they are allowed to be traded OTC. The ones that you must watch out for are the companies that are unethically managed. These are the so called hot penny stocks that that are promoted and then quickly sold off to make a profit. By the time naive investors have bought them, the hype has worn off and they cannot sell them. Watch out for these schemes!

There are also those situations when companies are well established and are still considered to have hot penny stocks. These are companies that are truly trying to grow so that they go above the penny stock status and can potentially be traded on the NYSE or another major exchange. These businesses truly opt to increase their customer’s value in the stock market.

Hot penny stocks contain an element of risk just like any other type of investment. The point is that you must build your list of penny stocks very carefully. Do as much research as you can, and think twice before investing in a hyped up penny stock. There are penny stocks worth investing in, but it is up to you, the investor to find them.

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Paper Trading Options

August 25, 2019 by Leave a Comment

It is always nice when someone gives you something for nothing, an extra doughnut at the bakery or that tool you need. Other people want to give you something for free as well; an education paper trading options. Paper trading options is a process in which you can simulate the real decision-making process of options trading without committing real money. 

You approach paper trading options the same as you would a real trade in the stock market, taking into account everything you would consider if you were making a real investment, and implementing your positions on the computer. By analyzing how your theoretical investments perform you can evaluate whether your stock trading plan and your technical analysis tools are working without the pressures of possible financial loss.

Why Paper Trading Options Is A Good Idea

Paper trading options gives you the opportunity to practice and learn without the financial danger of real losses. You can fine-tune your stock trading system, test it and improve your investment philosophy in theory before going live. You can learn stock market terms, techniques and practices without pressure. 

It is also easier for you to test your trading rules in a simulated trading environment than in the real market. When you have actual money at stake, emotional reactions such as greed and fear can sometimes affect sound judgment. If you can resist those feelings and follow your stock investing system , your paper trading options approach, and later your live options trading, will be much more successful. 

A Little Explanation of Options 

Options trading is different from typical investing in the stock market or bonds since you don’t actually own anything. In options trading, A stock option is not a physical thing like holding shares in a company. Instead it is a contract between two parties. When you own stock you actually own part of a company. An option is an agreement, or contract, where one party agrees to deliver something to another party within a specific time period and for a specific price.

This distinction is important because with options you are not borrowing anything. For example, in the case of stock, you must first borrow the stock if you are selling short; with options there is nothing to borrow so you can short options without the worry of borrowing first. Options are popular because they can help you leverage your positions, meaning that you don’t move on a few shares but hundreds or thousands. Instead of buying a stock outright, you can enter into an options contract which can be much cheaper but have the same, or even better, returns.

The Profit Potential of Options Trading

With options trading, you have the best of both worlds; limiting your risk and at the same time leaving you open to make unlimited profit if the market rallies. It is important to say that not all stock option trading strategies have the same payoff benefit. Only if you are buying options can you limit your risk. For option sellers, this is the reverse since they have unlimited risk with limited profit potential. While this sounds dangerous, once you understand the options available to you and how to use them, you can limit even the unlimited risk when you sell strangle.

Getting Started Paper Trading Options

There are a large number of companies on the Internet that offer free options paper trading; a simple search will give you more choices that you can imagine. These companies offer this service in hopes that after you get comfortable paper trading options, you will open a commodity account with them. In the meantime, once you have registered simply follow the directions of the stock market investing software and you are ready to begin. 

What You Might Notice

If you try to implement positions before you understand options trading, you will probably be surprised; options trading has a different set of terminology, different strategies and even the trading software will probably be confusing. So before you try to begin giving yourself an option trading education; learn the terms, learn the techniques, and learn the stock trading software where you are paper trading options. 

Does Paper Trading Options Really Matter? 

In and of itself, paper trading options is not crucial; it is merely a simulation of the things required to trade options in the real world. What is important while paper trading options is your mental approach; if you treat this like a game or don’t understand the importance of learning options trading, you should seriously reconsider attempting to trade options. This is a skill and the consequence is losing your money so don’t take paper trading options lightly. 

Conclusion 

Getting something for free doesn’t happen everyday, especially in the business world. It is time that you put down that free doughnut and take advantage of this unique opportunity and start paper trading options today.

Filed Under: Free Resources

Stock Price Analysis

August 24, 2019 by Leave a Comment

Stock price analysis lies at the root of profitable stock trading. Stock traders profit from buying stock, selling stock, trading stock options, and trading futures on stocks. Traders profit from the price difference between entering a stock position and exiting. Thus stock price analysis is essential. Long term investing relies upon an analysis of the margin of safety of a stock and intrinsic stock value. However, buying a promising stock that has already run up in stock price can greatly diminish profits. Thus stock price analysis can be as important for the long term investor as it is for the day trader. Both long term investors and traders can profit from the use of Candlestick analysis. This easy to read technical analysis tool allows traders to execute trades with a high statistical probability of success without falling prey to the twin stock market trading demons of fear and greed.

Stock price analysis can be carried out with the long view in mind and with an eye towards minute by minute day trading profits. A conservative investor may wish to have a couple of dividend stocks in his stock portfolio. Using stock price analysis he will often buy these stocks when interest rates are high because the stock prices of dividend stocks will commonly be low at these times. When interest rates fall the investor will have the choice of continuing to receive dividends or selling the dividend stock at the now-higher stock price. On the other hand the day trader will commonly use Candlestick stock charts in order to anticipate short and medium term stock price fluctuations. Although the long term investor will commonly prefer a very stable and predictable stock the trader will commonly look for stock volatility and market volatility which picking stocks in search of short term trading profits.

It is common for successful investors to use technical analysis tools such as Candlestick patterns in choose if and when to purchase a stock. The long term investor will look for stocks with strong forward looking earnings potential as well as the margin of safety that cash in the bank and unencumbered physical assets represent. However, such stocks are often highly priced as investors are willing to pay for the promise and security that the stock offers. Thus an astute investor will often pass on such otherwise promising stock after seeing its high price to earnings ratio or high price to sales ratio. Here is where tools such as Candlestick pattern formations come to the aid of the long term investor. Even very stable and successful companies see their stock prices fluctuate during stock market crashes, rumors of mergers and acquisitions, or news of a new product coming out from a competitor. By using Candlestick signals for stock price analysis the long term investor will commonly be able to gain market insight during times of high price volatility and successfully purchase the stock in question on a short term correction. Whether one is interested in long term investing or trading for short term profits, stock price analysis with Japanese Candlesticks gives one a high statistical probability of success without the confusion and mistakes that the psychology of trading can bring about.


Market Direction

Has the downtrend reversed? Has the candlestick signals revealed reversal signals? Although the markets are still in a slow down trend, there have been candlestick reversal signals being formed at these levels. That is providing valuable information. It is visually revealing that buyers are starting to step in at these levels. There are very simple strategies that allow investors to be positioned correctly if a transition in the market trend is starting to take place. 

Private training sessions – August 2011 – It is often asked what are the benefits of attending a private training session. There is a definite benefit to learning candlestick signals and patterns and the related factors surrounding candlesticks that produce consistent profits. These private training sessions, consisting of three or four traders being instructed by Stephen W Bigalow allow for very concise demonstrations and answers to one’s personal questions. Have you ever gone through a training session where your questions were quite answered to where you fully understood? And then the remaining portion of the training session was a little bit hazy because you weren’t fully understanding a specific aspect? A private training session consists of two solid days of viewing and understanding how candlestick analysis works effectively. You will not be provided with information that you have to figure out how to use correctly. You will be instructed in how to use candlestick signals correctly. You do not believe the training with any un-answered questions in your mind.

When you see how candlestick analysis is derived from common sense investment practices, your concept on how to invest correctly is completely altered. You will understand how to buy at the bottoms when everybody else is selling and selling at the tops when everybody else is buying. You will learn how to scan for the high probability/high profit trades. You will learn how to automatically set your stop loss procedures without having any emotional attachment. The learning process is not a “drum into your head” memorization process. Stephen Bigalow shows you how to interpret high profit trading patterns as a natural visual perspective. What makes it even better is the learning environment. The teaching process is done on a porch reviewing charts while also enjoying the clear waters of Keuka Lake, a beautiful Finger Lake of New York State. Breaks do not consist of getting a drink at the water fountain in the hallway of a stark hotel. Breaks at these training sessions consist of taking a dip in the cool and refreshing waters of the lake. The learning process does not end away from the computer screens. Investors can continue to ask questions and get answers from Mr. Bigalow at some of the best wineries in the nation or at dinner in a historic hotel restaurant overlooking the lake.

When you finish a candlestick training session, you will have gained a completely different perspective on what makes consistent profits in the markets. You become a controller of your investments versus the markets controlling you. Do not miss this opportunity to gain valuable insights into the most proven investment program in the world. The nuances of 400 years of candlestick observations, when conveyed to you in very pleasant surroundings, allows you to go home and make consistent returns. These training sessions are an excellent getaway for bringing your spouse and having them enjoy the attractions of the New York’s Finger Lakes region. Seats are obviously very limited. We will have this item posted in our site on Friday.

Chat session tonight at 8 PM ET. Everyone Is Welcome.

Good Investing,

The Candlestick Forum Team

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