All About Trading Funds, Different Types of Funds

Open-Ended Vs Closed-Ended Funds

Open-Ended funds and closed-ended funds can be regarded as two main collective investment instruments. Open-Ended funds (OEFs) are funds which stay open; there is no fixed number of shares and are usually not traded on exchanges (eg: mutual funds). Closed-Ended funds (CEFs) have fixed number of shares and are traded through exchanges just like stocks. Here are the key differences between open-ended and closed-ended funds.

Closed End Funds or CEFs

Closed End Funds of CEFs are collective investment instruments which, in many ways, are similar to mutual funds; in fact may consider them as first type of mutual funds. Like mutual funds, CEFs are professionally managed, diversified funds which buy and hold stock and/or bonds and issues their shares to trade publicly. But there are some key differences,

Bullish Dragonfly Doji Candlestick

Bullish dragonfly doji candlestick is a rare candlestick formation indicating trend-reversal; that is the end of existing downtrend and the start of a new uptrend. It is a patter consisting of single candlestick, a dragonfly doji candlestick, having no (very small) real-body and upper shadow. Bullish dragonfly doji pattern has great similarity to Hanging man or Hangman pattern; the difference is that in hanging man there is small real-body.

Positive Volume Index or PVI

Positive Volume Index or PVI is a market trend indicator. It was introduced together with Negative Volume Index or NVI by Norman Fosback in his book Stock Market Logic. Unlike NVI which track smart money on low-volume days, positive volume index tracks the crowd on high-volume days. PVI only consider the trading days which have higher trading volume than previous days. The formula is,

ETFs as Long Term Investments

Exchange traded funds (ETFs) are very good instruments for long-term investments. They are especially important for investors who do not have much idea to screen the stocks, market timings and trends. Below are some factors which make ETFs good for long-term investments.

Market Effects of Large-Scale Trading

According to researches and studies, a major percentage of stock market activities are done by large-cap traders including institutional traders, scalpers and money managers who create a ‘smart money group’. According to CNBC this group of only 4,000 members is responsible for more than 80 percent of total daily stock trading volume. They conduct 50 trades as an average per session. Below are the effects of this type of large-scale trading.

Bearish Dragonfly Doji Candlestick

Bearish dragonfly doji is a trend-reversal candlestick formation which indicates the end of existing uptrend and the start of a downtrend. It is a single candlestick formed of a dragonfly doji candlestick – which as no real-body and no (or very small) upper shadow. Bearish dragonfly doji is rare and has great similarity to bearish hanging man pattern. The difference is, in hanging man formation the candlestick has a small real-body.

Negative Volume Index or NVI

Negative Volume Index is considered as a good indicator to find bullish trends. It was introduced together with Positive Volume Index or PVI by Norman Fosback in his book Stock Market Logic. Negative volume index only consider the trading days which have lower trading volume than the previous days. It is calculated as

ETF Statistics for Traders

Exchange traded funds (ETFs) are one group of diversified trading instruments which are getting more and more popular among traders. Investment Company Institute or ICI (ici.org) releases monthly statistics of US registered ETFs.

Weekly Stock Trader Newsletter, May 18, 2009

The Week Ahead: Thousands of job losses will be threatened at General Motors under the expected announcement by June 1 of the company closing 1100 dealers. Many commercial real estate sites would hit the market with these closings. The NAHB Housing Market Index is released on Monday and April housing starts on Tuesday. The minutes from the Federal Reserve April meeting are due on Wednesday while the leading economic indicators and jobless claims figures come out on Thursday.

Trading Advantages of Stock Splits

Although many financial experts do not admit that stock splits have anything more than just numerical split of price and numbers, many investors consider stock split as a positive event. Often stock splits are accomplished by significant rise in the price of the stocks concerned. There are many reasons for it, and generally they are more emotional than arithmetic.

Bearish Gravestone Doji Candlestick

Bearish gravestone doji is a bearish top reversal pattern, which indicates the beginning of a new downtrend after a noticeable uptrend. This is a two candlestick pattern formed of a bullish (white or colorless) candlestick usually formed at top of an uptrend and a gravestone doji candlestick having (almost) same opening and closing prices and no (very small) lower shadow. Know more about different Doji candlestick patterns.

Speed Resistance Lines

Speed Resistance Lines or SRL, also known as Speedlines, are tools to find possible support and resistance levels for an existing trend. SRL were developed by Edson Gould and is similar to Fibonacci Fans indicator. Speed resistance lines combine trend lines and percentage retracements to predict support/resistance levels and also measures the speed of a developing trend.

Weekly Stock Market Newsletter, May 11, 2009

The Week Ahead: Although widespread layoffs persist in construction, manufacturing, retail, and financial services, optimism that the slowing pace of job loss will lead to economic recovery took hold. Look for the trade balance numbers due out on Tuesday and the retail sales figures on Wednesday. The Producer Price Index is released Thursday along with jobless claims while the Consumer Price Index is revealed Friday.

Advantages of Trading Life-Cycle ETFs

Both Life-cycle ETFs and mutual funds are getting now popular among investors, especially those planning for their retirement. Life-cycle exchange traded funds holds many advantages over life-cycle mutual funds and other retirement investment schemes.

Investor Lessons to Learn from Short-Term Traders

Short-term trading and investing is considered almost opposite trading strategies suiting different types of peoples with different portfolio requirements and money managements. Although one is not considered superior to other, short-term trading has some advantages as it demands quick learning and active trading, better touch with market and economy, better money management and quick decision making. Majority of investors we see around us are poor with their money management, less skilled and are less aware of market movements. There are many things which investors should learn from short-term traders.

Bullish Meeting Lines Candlestick Formation

Bullish meeting lines is a bullish market reversal pattern indicating the beginning of an uptrend after a downtrend. It is a two candlestick formation, which is somewhat rare, formed of a bearish (black or colored) candlestick and a bullish (white or colorless) candlestick. Bullish meeting lines has a strong resemblance to bullish piercing line pattern; the only difference is that the real-body of second day candlestick does not enter to the real-body of first day candlestick. This difference makes it less reliable than bullish piercing line.

Guppy Multiple Moving Average or GMMA

Guppy Multiple Moving Average or GMMA is a technical analysis indicator developed by Daryl Guppy which is used to analyze trends and to identify trend changes. As the name implies it is an indicator based on moving average; exactly two groups of moving averages - short-term moving averages which show short-term trends or trader sentiments and long-term moving averages which show long-term trends – investor sentiments.

Trading Life-Cycle ETFs

Life-cycle exchange traded funds (ETFs), also known as target-date ETFs, are diversified and periodically adjusted funds which are one-stop retirement savings vehicles. Like life-cycle mutual funds, life-cycle ETFs are funds of funds; they track other ETFs. There are also some life-cycle ETFs which directly invest in stocks and bonds. They come with a target date, which can be identified from there name; for example an ETF having 2020 in its name is for investors who are expected to retire at 2020.

Weekly Market Update Newsletter, May 4, 2009

The Week Ahead: The bankruptcy of Chrysler will lead to several more plant closures and a motion to sell the company to Fiat. General Motors will watch this process as a model for its possible reorganization. Construction spending numbers for March are due on Monday. The "Stress Test" results for banks detailing potential losses and whether they can absorb losses will be released on Thursday. In addition, chain store sales and the jobless claims numbers come out.

Coverdell ESA – Advantages and Disadvantages

From the renaming of Education IRA to Coverdell Education Savings Account (ESA) in 2002, they are considered as a very attractive investment option. Most people compare Coverdell ESAs with 529 plan. Coverdell ESA holds many advantages and limitations.

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