Trading Technical Indicators, Stock Trading Technical Indicators

Thursday, July 31, 2008

Quadrant Lines for Price Movement Inspection

Quadrant lines are a set of horizontal lines which are plotted over price charts. The only purpose of these lines is to aid in the visual interpretation of trends - highest, lowest and average prices, for a specified time period. They do not help in any technical analysis and thus are advocated only for beginner traders, who want to investigate about price movements to get familiar with market.

Wednesday, July 30, 2008

Interpreting Ichimoku Cloud Lines

Interpretation of Ichimoku cloud lines is pretty easy and straight forward. Different colors and shades are given to different line and areas respectively for easy identification and interpretation. Ichimoku cloud indicators give better results if used in long time frames.

Tuesday, July 29, 2008

Ichimoku Kinko Hyo or Ichimoku Cloud Indicator

Ichimoku Kinko Hyo (One Glance Balanced Chart) or Ichimoku Cloud is a technical analysis tool for finding support and resistance levels, direction of trends, strength of trends, and entry and exit points. The indicator was first developed by a Japanese journalist, Goichi Hosoda, in 1968-69. Ichimoku cloud is becoming increasingly popular among traders trading equities, futures and forex currencies.

Monday, July 28, 2008

Integrated Asset Allocation Strategy

Integrated asset allocation strategy is a moderately active portfolio management strategy. It is practiced mainly by mutual funds, portfolio managers and some personal investors. Integrated asset allocation strategy is somewhat complex as there are no fixed rules, and requires good knowledge, frequent investment preference changes and good analysis tools for proper implementation.

Friday, July 25, 2008

Trading Energy Futures Contracts

Energy futures market is a liquid yet extremely volatile futures market offering traders opportunities to profit from ever changing oil and gas prices. Energy futures are traded in different markets across the world like London exchange, Intercontinental Exchange (ICE) and New York Mercantile Exchange (NYMEX).

Thursday, July 24, 2008

Fibonacci Channels Technical Indicator

Fibonacci channels are an advanced Fibonacci technical indicator helpful in determining support and resistance levels. They are variations of Fibonacci retracement lines, and are drawn diagonally rather than horizontally. Fibonacci channels can be applied to both long-term and short-term trends, and to up trends and downtrends.

Wednesday, July 23, 2008

Selling into Strength and Buying into Weakness

Both selling into strength and buying into weakness are standard trading practices, widely followed by traders of all kinds. They are proactive trading strategies which are opposite to one another. In both selling into strength and buying into weakness the trader reacts to the market before confirmation of a change.

Tuesday, July 22, 2008

Market On Close and Market On Open Orders

Market On Close (MOC) or At-The-Close orders are market orders to buy or sell financial instruments which are executed at the last minutes of the trading day by the brokers. MOC orders are executed at market closing price (which may differ with exchanges) or very close to that price.

Monday, July 21, 2008

Forex Trading using Pivot Points

Pivot points are the simple yet powerful technical analysis tools extensively followed by forex traders. Click here to know more about Pivot Points. Pivot points are useful for all types of traders – range-bound traders, trend traders and breakout traders – trading for long-term and short-term profits.

Friday, July 18, 2008

Trading ETF Futures Contracts

Exchange Traded Funds (ETFs) are regarded as the most successful trading instruments introduced in the last two decades. They are traded just like stocks, are tax efficient, are less expensive, and are a good way of diversifying portfolio. Chicago Mercantile Exchange (CME) has also introduced standardized futures contracts on ETF in 1997. CME offers electronic trading of 3 different ETF futures contracts.

Thursday, July 17, 2008

Fibonacci Cluster Technical Indicator

Fibonacci cluster is an advanced Fibonacci technical indicator used extensively by traders of all kinds to find support and resistance levels and to predict trend reversals. Fibonacci clusters are easy to interpret and are easy to use in conjunction with other technical analysis tools.

Wednesday, July 16, 2008

Fighting the Tape and Painting the Tape

Both fighting the tape and painting the tape are trading practices to be avoided. Fighting the tap is a trading practice where traders act against the ticker tap. That is they buy when stock prices are falling (bearish market) and sell when stock prices are rising (bullish market).

Tuesday, July 15, 2008

Forex Mini Accounts and Trading Risks

Mini forex trading accounts are an excellent option for beginner traders to get familiar with forex market. Mini accounts (contract size 10,000) are typically 10% of standard accounts (contract size 100,000), and also require low minimum deposits to open the account.

Monday, July 14, 2008

Weekly Stock Market Information Letter, July 14, 2008

The Week Ahead: Stocks fell for the sixth straight week while bond yields rose as Fannie Mae and Freddie Mac's stock price collapsed losing almost half there value. This has cast a cloud over the specter of a market turnaround, but Fed chairman Bernanke begins his Capital Hill testimony on Tuesday which could ease investor fears. Also look for the PPI and business inventory reports. Wednesday, the CPI, industrial production, and the FOMC Minutes release from last months policy meeting will be in focus. Thursday brings the housing starts number.

Friday, July 11, 2008

Managed Futures Trading Accounts

Managed futures accounts are futures trading accounts which are managed by professional money managers on behalf of their customers. These money managers are known as Commodity Trading Advisors (CTAs), who are registered under Commodity Futures Trading Commission (CFTC). They buy and sell futures contracts in a discretionary or predefined basis.

Thursday, July 10, 2008

Fibonacci Extensions Technical Indicator

Fibonacci extensions are an advanced Fibonacci application, which are widely used by traders and investors. They help traders in figuring out the future support and resistance levels of a trend beyond 100% retracement level.

Wednesday, July 9, 2008

Tirone Levels Technical Indicator

Tirone levels are a series of horizontal lines plotted on trading charts to predict possible support and resistance levels, developed by John Tirone. They are very much similar to Fibonacci retracements and Quadrant lines. Tirone levels are used mainly by short-term traders, especially day traders; they are also useful for long-term trading.

Tuesday, July 8, 2008

Forex Opportunities in Emerging Market Currencies

The economic advancements in many Asian, Latin American and European countries now offer good trading/investing opportunities to investors across the world. Studies have shown that many emerging market funds outperformed others. This emerging market economic growth also offers forex traders an opportunity to profit from trading corresponding currencies.

Monday, July 7, 2008

Stock Info Week Newsletter, July 7, 2008

The Week Ahead: Job losses are now in there 6th straight monthly decline. European banks raised there interest rates. Oil eclipsed $145 a barrel, and the DOW officially reached bear market territory. Earnings season kicks off this week starting with Alcoa (AA) on Tuesday. Pending home sales and wholesale inventories will also be released. Same store sales numbers are due Thursday while the University of Michigan's Consumer Confidence report comes out on Friday. Watch for General Electric's (GE) earnings at weeks end as well.

Thursday, July 3, 2008

Support and Resistance Levels

Support and resistance levels are the most widely used technical analysis tools by all kinds of traders. Support is a price level at or below the current trading level which act as a barrier for downward price movement of the stock. Resistance is a price level at or above the current trading level which act as barrier for upward price movement of stock.

Wednesday, July 2, 2008

Three-Factor Model of Portfolio Management

Three-Factor Model is an extension of Capital Asset Pricing Model (CAPM) used to determine the return and risk associated with a portfolio management. It was developed by Eugene Fama and Kenneth French in 1993. Complicated than CAPM, the Three-factor model is more accurate as it explains more than 90% of portfolio returns (compared to around 80% of CAPM).

Tuesday, July 1, 2008

Capital Asset Pricing Model (CAPM)

Capital Asset Pricing Model or CAPM is an investment model widely used by investors to determine return and risk associated with an investment or portfolio. CAPM is also used to determine whether a security is over-valued or under-valued. The general idea is if the investor takes any risk there must be sufficient return from it, called risk premium. The formula of CAPM is