Technical Analysis Blog, Stock Trading Technical Analysis Blogs

Friday, October 31, 2008

What is Indicative Net Asset Value or iNAV?

Indicative Net Asset Value or iNAV or simply indicative value is the measure of net asset value of a fund or instrument according to the change in price of underlying instrument. iNAV is a powerful trading indicator especially for ETF traders and investors, as it indicate almost the price at which the ETF is trading. By definition, it is the intraday measure of per share value of an instrument based on the asset it holding and the liabilities it has.

Thursday, October 30, 2008

Bullish Morning Doji Star Pattern

Bullish morning doji start pattern is one of the most reliable market reversal candlestick patterns which indicate a possible upward trend. The pattern is widely followed by all types of traders trading all financial instruments. Morning doji star formation is a three candlestick pattern, usually found at bottom of a downtrend.

Wednesday, October 29, 2008

What are Matching Systems?

Matching systems are alternative trading systems which automatically match bids and offers to execute trades. They are widely owned by institutional traders, market makers, banks, money managers and other financial firms to create an alternative trading environment. Instead of continuous order execution, as in major exchanges, matching systems often follow periodic execution sessions.

Tuesday, October 28, 2008

Weekly Market Newsletter, 27 October 2008

The Week Ahead: U.S. stock markets are at 5 year lows coming into this week and experiencing one of the worst months on record. Buying is still on low volume suggesting that rallies are bear market traps. The Federal Reserve meets this week on Tuesday and Wednesday with a 1/2 point rate cut expected. A 3/4 point cut may help turn markets around. Other reports include: new home sales on Monday, consumer confidence on Tuesday, a widely anticipated Q3 advanced GDP number on Thursday, and personal income and spending on Friday.

Monday, October 27, 2008

What is Interest Rate Parity?

Interest rate parity is one of the major applications of the Law of One Price and plays a major role in forex trading markets. It links the short-term interest rates, spot exchange rates and forward exchange rates of two or more different currencies. It is a non arbitrage condition according to which the returns obtained from borrowing in a particular currency, exchanging that currency for another and investing in interest-carrying instruments in the second currency, and at the same time buying futures contracts to convert the currency back by the end of the investment period, will be equal to the returns one gets by buying and holding similar interest bearing instruments of the first currency. Whenever the theory is violated, an arbitrage opportunity is created.

Friday, October 24, 2008

Advantages of Futures Spread Trading

There are many advantages of trading futures spreads over trading naked futures (taking simple long or short futures positions).

More profit opportunities and flexibility – trading futures spreads offer more opportunities as they are less volatile (compared to simple contracts), predictable and usually they follow trends.

Thursday, October 23, 2008

Star Candlestick Patterns

Stars are one of the most trusted market reversal patterns. Candlesticks stars are colored (dark or bearish) or clear (white or bullish) candlesticks which fulfill following requirements.

Wednesday, October 22, 2008

Call Markets and Auction Markets

Call and auction markets are trading markets, where trades are carried out based on ask and bid prices. Auction markets are common markets where continuous trading of instruments is carried out by matching ask and bid prices. But call markets lack continuity and trading of instruments is carried out at pre-determined intervals (eg: at market opening, noon and market close) on ask and bid prices specified by the market.

Tuesday, October 21, 2008

Non-Deliverable Forward or NDF

Non-deliverable forwards or NDFs are forward contracts on financial instruments (usually on foreign currencies) which are cash settled and do not involve the delivery of underlying instrument. NDFs are widely traded for non-convertible or thinly traded or futures trading banned foreign currencies. NDFs are traded over-the-counter and are usually settled in US dollars.

Monday, October 20, 2008

NobleTrading Weekly Newsletter, 20 October 2008

The Week Ahead: Markets will try to build on last weeks rebound which was the best in 5 years. The credit freeze thawed somewhat as bank to bank lending rates eased but are still well above normal. With consumer sentiment having its steepest one month drop ever, barrowing demand by consumers may be experiencing a freeze of it own. Ben Bernanke will give his annual testimony to Congress on Monday, and the leading economic indicators are released. Realty Trac's Foreclosure Report is due Thursday and existing home sales on Friday.

Friday, October 17, 2008

Finding Right ETFs for Trading

Exchange Traded Funds (ETFs) are still considered as new comers of financial market, and new types of ETFs, with different underlying indexes and instruments, are coming up. Now there is more than 600 ETFs available for trading and all of them is not suitable for all traders. Traders should select them according to their profit expectations, trading knowledge and trading preferences. Here are some factors which help in evaluation of ETFs.

Thursday, October 16, 2008

Doji Candlestick Formations

Doji are an important group of candlestick formations which carry important market information on their own and with preceding and following candlesticks. Doji candlesticks are characterized by very small body; formed as a result of very close (virtually equal) opening and closing prices. When taken singly doji are neutral candlestick patterns, but with adjoining candlesticks they indicate market reversal and bullish or bearish trends.

Wednesday, October 15, 2008

Directional & Non-Directional Trading Strategies

Directional and non-directional trading strategies are two broad classification of trading strategies. Directional trading strategies include any long-term or short-term trading strategies which include taking a long or short position in market. Non-directional trading strategies include trading strategies which include taking market-neutral positions.

Tuesday, October 14, 2008

Weekly Market Letter, 13 October 2008

The Week Ahead: The rapidity of the stock markets decline last week left investors with the worst one week decline in its history. Banking leaders of the U.S., Europe, and Australia this weekend agreed to support financial firms to prevent failure. Initiatives such as buying bank securities are hoped to halt a financial crisis that none have seen before. The bond market will be closed Monday for Columbus Day. The Fed's Beige book, retail sales, and the Producer Price Index are released on Wednesday. The jobless claims and Consumer Price Index are due out on Thursday. September housing starts will be out by Friday.

Monday, October 13, 2008

Moving Average Crossover for Forex Trading

Moving average crossover trading strategy is one of the most widely practiced forex trading strategies by both novice and experienced traders. The crossovers can be simple, where the price of currency crosses a moving average to very complex where more than one moving averages cross each other.

Friday, October 10, 2008

What are Inflation Derivatives?

Inflation derivatives or inflation-indexed derivatives are a subclass of derivatives which is used by investors to hedge the risk of increasing inflation. Many investors prefer them over inflation-indexed bonds (e.g.: Treasury Inflation Protected Securities TIPS and UK Inflation Linked Gilts), as they offer more flexibility and as they don’t require large amount of capital investments.

Thursday, October 9, 2008

Three Black Crows Candlestick Pattern

Three black crows is a bearish candlestick pattern, which indicate the possible reversal of an uptrend and start of a downtrend. Usually this pattern is formed at the top of an uptrend. Thee black crows pattern is three long dark (colored or bearish) candlesticks each closed below than previous day’s close.

Wednesday, October 8, 2008

Weekly Market Newsletter, 10 October 2008

The Week Ahead: News of a worsening employment situation overshadowed the final passing by Congress of the long anticipated financial sector bailout package as markets continued the plunge to new lows. The FOMC Minutes from the last Fed Meeting are released on Tuesday while pending home sales are due Wednesday. Wholesale trade inventories are out on Thursday. Watch for the import price report and trade balance figures on Friday as well as chain store sales.

Tuesday, October 7, 2008

What is Law of One Price?

Law of one price is a financial law which states that the price of same (identical) instruments must be same at a given time in an efficient market. The law applies to most financial instruments available for trading/investing as commodities, equities, derivatives and funds. Example: the price of one commodity or equity traded in two different exchanges must be same at a point of time.

Monday, October 6, 2008

Trading International ETFs

International ETFs or Global ETFs are exchange traded funds which buy and hold stock traded in foreign stock exchanges to make up their portfolio. The shares of these ETFs are available for trading in US stock exchanges, where they are traded just like stock. International ETFs help investors and traders to overcome many hassles involved in direct trading of foreign stock exchanges.

Friday, October 3, 2008

Three Types of Futures Spreads

Futures spreads trading is considered a more evolved, profitable and less risky futures trading strategy than taking simple long or short positions. Spread is the process of taking long and short positions on two different futures contracts of the same or related underlying commodity. There are three types of futures spreads.

Thursday, October 2, 2008

Three White Soldiers Candlestick Pattern

Three white soldiers is a bullish candlestick pattern which indicates reversal of current downtrend and start of upward trend. It is considered as one of the most reliable trading pattern if it is formed after a prolonged downtrend or after consolidation of a downtrend. As name suggest, three white soldiers pattern consists of three long white (clear or bullish) candlesticks, each closed higher than previous day’s close.

Wednesday, October 1, 2008

What is Advance – Decline Index?

Advance – Decline Index is one of the most powerful technical analysis tools for analyzing market strength of movement. It is a simple indicator which is derived as the difference between the total number of advancing (bullish) stocks and total number of declining (bearish) stocks. Advance/decline index favor all type of traders – short-term and long-term traders – and can be used for trading many financial instruments – stocks, ETFs, futures and currencies.

NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage