Intro Technical Analysis (Video1)

Source : Informedtrades

Intro Technical Analysis

Intro Technical Analysis Video

Stock-Picking Strategies: Technical Analysis

Technical analysis is the polar opposite of fundamental analysis, which is the basis of every method explored so far in this tutorial. Technical analysts, or technicians, select stocks by analyzing statistics generated by past market activity, prices and volumes. Sometimes also known as chartists, technical analysts look at the past charts of prices and different indicators to make inferences about the future movement of a stock's price.

Philosophy of Technical Analysis
In his book, "Charting Made Easy", technical analysis guru John Murphy introduces readers to the study of technical analysis, explaining its basic premises and tools. Here he explains the underlying theories of technical analysis:

"Chart analysis (also called technical analysis) is the study of market action, using price charts, to forecast future price direction. The cornerstone of the technical philosophy is the belief that all factors that influence market price - fundamental information, political events, natural disasters, and psychological factors - are quickly discounted in market activity. In other words, the impact of these external factors will quickly show up in some form of price movement, either up or down."

The most important assumptions that all technical analysis techniques are based upon can be summarized as follows:

1. Prices already reflect, or discount, relevant information. In other words, markets are efficient.
2. Prices move in trends.
3. History repeats itself.

What Technical Analysts Don't Care About
Pure technical analysts couldn't care less about the elusive intrinsic value of a company or any other factors that preoccupy fundamental analysts, such as management, business models or competition. Technicians are concerned with the trends implied by past data, charts and indicators, and they often make a lot of money trading companies they know almost nothing about.

Is Technical Analysis a Long-Term Strategy?
The answer to the question above is no. Definitely not, Technical analysts are usually very active in their trades, holding positions for short periods in order to capitalize on fluctuations in price, whether up or down. A technical analyst may go short or long on a stock, depending on what direction the data is saying the price will move. (For further reading on active trading and why technical analysis is appropriate for a short-term strategy,

If a stock does not perform the way a technician thought it would, he or she wastes little time deciding whether to exit his or her position, using stop-loss orders to mitigate losses. Whereas a value investor must exercise a lot of patience and wait for the market to correct its undervaluation of a company, the technician must possess a great deal of trading agility and know how to get in and out of positions with speed.


Support and Resistance
Among the most important concepts in technical analysis are support and resistance. These are the levels at which technicians expect a stock to start increasing after a decline (support), or to begin decreasing after an increase (resistance). Trades are generally entered around these important levels because they indicate the way in which a stock will bounce. They will enter into a long position if they feel a support level has been hit, or enter into a short position if they feel a resistance level has been struck.

How to Make Consistent Profits

A lot of people do not realize that they buy the stock because of greed and they sell the stock because of fear because what they have in their mind is how to make money as quick as possible and as easiest as possible without knowing the behavior of the stock market. In order to make profit, we should be able to acknowledge some strategy and be discipline.

Therefore, some people take their money away from the stock market and switch to commodity or foreign exchange. However, one thing we should realize that there are some industries/sectors that do not get impact the during this recession even some stocks rally up due to high inflation and wide market segmentation, meaning to say that people worldwide still use the product or service for doing everyday need or for supporting to run the business. As swing traders, this is good opportunity to growth our portfolio and to make consistently profit.

Even, we can pick up some stocks are really really undervalue in which people are fear to lose therefore they sell everything, not knowing fundamental of the companies. Also, for option trader, we can take profit from bi-directional by using some particular strategies. Therefore, the question that we should ask to our self is are we getting poorer or richer after this recession?, do you want to know how to find those stocks? For option trader, do you want to know the strategy that will generate us profit in bi-directional market?

 

How to succeed while Trading Forex

Most FOREX traders know every thing including all the indicators, market analysis and money management but lack the right orientation and what it actually takes to succeed in the trade.

It takes, what I call PIP (Practice, Intelligence and Perseverance) to really succeed in the money market.

Patience plays a big part in trading. Take the trades only if you are at least 75% sure of profiting from it. If you are not sure, stay away from the trade. Staying on the sideline is as good as winning.

Never trade against the trend especially with a high volatile pair like GBP/JPY. It may give you a couple of winning trades. But it's going to get you in the long run.

Always have a trading strategy, make a habit to stick to it no matter how desperate you are. Your charts are your FOREX bible. Everything that you need to know about FOREX is on your charts. You will learn something new everyday from you charts.

Specialize in one or two currency pairs. 
Stay away from the ranging markets. There will be enough of trend break outs on this pair than you ever want.

You must rid yourself of the get-rich-quick mindset. There is a disease that most of the people looking to better themselves have; it is the "make a lot of easy money fast" disease. It comes from reading too many books full of hype and too many infomercials. It will destroy your ability to make significant money at anything, especially trading.

You must not be greedy while trading, learn to get satisfied with the profit you have realized and exit where necessary).

Traders are a greedy bunch. Less greedy once are the most successful once. 
Don't try to chase every single pip (profit in point)) or market movement. Have a realistic daily, weekly or monthly target as a percentage of your account, not the number of pips. If you have already achieved that target stay away from the market. Your gain should be more than your losses. Do not try to cover all your previous losses from your next trade.

At last ... remember there is no easy way to become a good consistently profitable trader. No one can become a profitable trader overnight. As everything else in life it takes time, patience lots of sacrifices and learning. Don't be afraid of mistakes. You have to practice and make research; Sign up for one good broker now and start practicing. So practice some more. If you do this right, you can make money trading FOREX. Yes I know you can.

Just follow the steps, okay, Practice! What it takes to succeed in FOREX trading is the guts to keep practicing and maintain self discipline.

 

How to make Rs 5000 a day in Trading

Can you claim to be able to make Rs 5000 a day in profits from your trading? In fact how many traders you know can teach you a way to make Rs 5000 a day everyday?

I dare say not many, because if you work out the sums, Rs 5000 a day works out to $10,000 a month. The professional traders make much more than this, while the private trader who lives by trading makes around this figure per month.

It is actually not difficult to make such consistent profits at all. You will have to work hard to achieve such results of course. Here are the steps you need to take to be able to make such a sum.

Step 1

Have a good money management plan. This is the crucial step, without it you can very well forget about getting any profits at all. A good money management plan consists of rules to guide leverage and margin, stop loss, profit objectives and position size.

Profit objectives are something that a lot of traders seem to have forgotten. In my classes I come across statements from students that ask why not let their profits run and try to cut their losses. My answer is this, "we are not doing a wild wild west here, allowing any from of control to escape your hands shows a severe lack of professionalism and foresight"

Not exactly a mild rebuke, but the idea of allowing a run away profit is not good financial planning. The reason for this is answered in step 2. But before we get there, remember to focus on a good money management plan. There is very resources on this but try to get as much information as possible as this is the corner stone of your trading.

Step 2

In your quest to make Rs 5000 a day in trading, your focus should be on your mind. You need to attract the money to you. You need to want to profit and you need to control all emotions. How this works is that you use your brain before and after the trade. During the trade you switch it off. You use your heart before and after your trading day. During the trading day, you detach your emotions.

Now this is a tough step to master. For money management it is easier because there are tangible elements, but for psychology everything is inside of you. Psychology is concerned about discipline, emotional detachment, and the ability to handle losses and profits.

In answer to the question in money management, when you allow profits to run and not set profit objectives you set yourself up to be too emotionally involved in the trade. How many of you can say enough is enough when you see your trade making more and more money? The reality is that most will just keep in the trade and then become like gleeful school children after the trade is over.

When that happens you have "programmed" your mind to behave in this way. So when you start to lose money you will also become so attached to your trade. Then what happens is that you refuse to exit the trade. You shift your stop loss position, finally you are out of money and then you are forced to end the trade. You may think that this may never happen to you, but after 20 years of trading and teaching I can safely tell you that 100% of traders that do not have a money management plan always face this crisis.

Last Step

A well crafted trading plan. This is where most traders are quite comfortable. Unfortunately there are a lot of half baked trading plans out there in the market. A good trading plan is one that covers 4 core areas. An intra day trade, a daily trade, a weekly trade and a monthly trade. There is too much information to write about it here, the blog provides a lot more information for you so pop by and visit.

How to make Rs 5000 a day in trading is to follow the above 3 steps. Just be sure to know that it is not easy. You will need time and effort to be able to reach such a figure per day. Just think that if you need 6 years of schooling to be an architect, you are considered lucky to take a year to learn how to trade properly and profitably.

 

How to Become Day Trader

There are many of us who would like to know exactly how to gain financial freedom through day trading. This is becoming an increasingly popular way to supplement your regular income, because you can work whenever you feel like it without having to answer to anyone. The first thing you need to do is to make sure you have the basics: a high speed internet connection, a charting service, real-time quotes and a broker service. However, keep in mind that if you truly want to become a day trader you need to possess a number of skills that are essential for your trading success.

Here are 7 useful tips to become a successful day trader:

1. Don't use borrowed money: Stocks are unpredictable and can fall at any time, so only trade with money you can afford to lose.
2. Start small: don't invest too much money on your first try. Wait until you have gained enough experience and then gradually increase you investments.
3. Learn from you mistakes: every time you fail you should carefully examine what where the factors that led you to failure. There are many people who keep repeating the same mistakes without ever questioning their techniques.
4. Don't give up too early: as soon as they lose some money many traders quit, believing that this is just a waste of time. You need to stay strong and focus on the target.
5. Always record your trades: keeping a record of every action that worked or failed will help you develop your own profitable strategy.
6. Establish a stop loss policy: money management is a very important skill. Don't risk wiping out your whole account.
7. Learn from the best: finding a great mentor and getting a good trading education is critical for your success. You need to learn how to analyze market trends and develop the correct money management strategy.

 

Global Financial Crisis affect the Day Trader

During the last two decades most markets were in long term bullish up trends.

We day traders could have been forgiven for becoming defensive about our craft as, week after week; we read sober articles exhorting investors not to "fall into the trap of trying to time the markets". Do not, they were told, act like day trading cowboys.

Instead of trying to time markets, clients were advised to take the Warren Buffet approach. Buy great companies and hold the stocks long term.

[Ironically, we now know that some of the organizations promoting this advice to clients were actually trading highly-leveraged, under-secured derivative instruments around the world. In comparison, most day traders act like pin-striped conservatives.]

Buy-and-hold is sound advice in a rising market. It is bad advice in a falling market, as countless unfortunate investors have found to their cost. It is especially bad if you are forced to liquidate holdings for any reason - to meet margin calls, for example.

When markets rise for years, buy-and-hold can become the default wisdom for all occasions. People are hypnotized into thinking the strategy will ride through occasional "downturns" and, when hit with a full blown recession, they sit and watch in horror as profits erode and turn into massive losses.

I believe day trading is inherently much safer than buy-and-hold investing for three reasons:

• The day trader makes money in rising or falling markets. Short term traders have the skills, tools and techniques to work with long or short positions. Unlike the buy-and-hold investor they are not locked into a world view that profit can only be made if prices go up.
• The day trader holds capital on the side lines most of the time waiting for a trading opportunity, then moves in for a quick strike. (I am rarely exposed to the market for more than an hour each trading day, often it is just a few minutes.) In contrast, the buy-and-hold investor is exposed to "event risk" twenty four hours per day, week after week, year after year. When war, natural disaster, or economic catastrophe strikes, the buy-and-hold investor takes the hit and hopes the markets will recover.
• A day trader is a disciplined risk manager. (Otherwise he or she will not last long in the business.) There is a plan for every trade entered, and if the trade does not work out a small loss is taken without emotion. in contrast, the average buy-and-hold investor has no risk management plan, other than to hold on and hope the markets will come back.

I am not being quite fair here. I am comparing an average buy-and-hold investor, a person who decides to buy some shares, with a competent day trader. But even if the long term buy-and-hold investor is a sophisticated operator, they are still more subject to unexpected event risk, still less flexible for short trading, and still find risk management (portfolio protection) more complex.

I trade the grain futures markets each day. During the last two years, prices in these markets rose relentlessly to record peaks, before plunging by more than 50%. That is the macro view.

However, the macro picture makes absolutely no difference to the way I approach my daily trading activity!

I go through the same routine, make decisions on the same basis, whether wheat is $10 per bushel and going to the moon, or $5 and collapsing.

This stability, this consistency of approach through all market conditions, this capacity to prosper in all market phases; these are the things I truly enjoy about day trading!

 

Day Trading Advice

Becoming a day trader is becoming a hot means for the average person to earn an income. You will find individuals who treat it as a full time job and others treat it as a method to make some extra money. Several individuals earning good livings with day trading which explains why numerous people are tempted to try it out.

Now obviously you can't simply start and make sizeable cash without understanding what you're doing! You want to have a certain level of knowledge when you get started so that you can make the best of your money. As we know, purchasing shares at a low price and selling high is how you earn money in the stock market. Obviously, the big question is - how can you know when to purchase and sell?

Employ these important day trading tips to increase your income possibilities.

Know what's in the market news and stay informed about the markets. You want to stay on top of happenings in the markets such as mergers, stock issuance, and earnings announcements for leading businesses. It's essential to gain a sound overview of the happenings in the markets.
Don't spend too much time on stocks with little movement. Changes in share prices are the key for day trading. In day trading you are buying and selling shares every day so you need to be invested in stocks that have daily price variations.

Improve your quantitative analysis skills. You'll need to be capable of analyzing trending and financial data at a glance. There's no need to be a master mathematician, but you need to know what the financial numbers mean so that you can make fast, accurate assessments.
Stay cool and determined. You need to keep your emotions even to avoid clouding your assessments. Whether you are too excited about a big trade, or deeply disappointed about a loss, both of these responses can hinder your ability to remain in the game, take smart actions, and keep a clear mind.

You may not get wealthy right away, but these hints are going to get you on the route to earning great cash with day trading. When you have the best tools and resources, you can experience the unbelievable money making potential that day trading offers.