Fund Trading Basics, Basics of Trading ETFs & Other Funds

Types of Exchange Traded Funds

Exchange Traded Funds (ETFs) themselves has great variety and diversity. They can be classified on many basis such as index they following, their management, asset allocation, etc. Here are some popular ETF types.

Weekly Stock Market Newsletter, June 29, 2009

The Week Ahead: The sharp rise in personal savings has the stock market fearing consumers are socking away dollars for a long recession. The April Case-Shiller Home Price Index is released on Tuesday. The auto sales report and construction spending numbers are due by Wednesday. The employment report for the month of June will be reported a day earlier than normal on Thursday due to the markets being closed on Friday ahead of the July 4th holiday.

Basics of Ticker Symbols

Ticker symbols are the identifications of companies on a exchange listed. They are not limited to stock exchanges; they are there for almost all financial instruments which are publicly traded. Ticker symbols derive their name from old noisy machines used by brokers for received buy and sell orders, which make ticking sounds.

Bearish Three Inside Down Pattern

Three inside down is a bearish trend-reversal pattern indicating the end of an uptrend and start of a new downtrend. It is a three candlestick pattern which is the ‘confirmation of bearish harami candlestick formation’. The first two day candlesticks of bearish three inside down pattern forms bearish harami pattern, and the third day candlesticks, which is bearish, confirms the trend change.

Displaced Moving Average or DMA

Displaced moving average or DMA is a very useful moving average (MA) tool, which can be adjusted both forward and backward to get specific results. DMA is created by displacing the simple moving average by a certain number of intervals; which can either positive or negative. OR DMA is created by displacing the center of the moving average to left (backward) or right (forward).

ETFs Active Vs Passive Investing Strategies

Exchange Traded Funds (ETFs) are always considered good candidates for passive investing. Their variety, portfolio diversity and low-risk nature better suited passive investors. But there are also many traders who actively traded these funds. Here is a comparison.

Weekly Stock Trader Newsletter, June 22, 2009

The Week Ahead: A long list of economic reports is slated to hit the markets starting with Tuesday's existing home sales report for May. The Federal Reserve's FOMC begins a two day meeting as well. Wednesday brings new home sales numbers and a durable goods report for May. The Federal Reserve will determine interest rate policy by afternoon. The Q1 final GDP report along with jobless claims is due by Thursday. Finally by Friday, the personal income and spending numbers come out as well as the consumer sentiment reading for June.

Tips for Trading with Candlesticks

Candlesticks helps tremendously in trading of financial instruments. Their advantages include 1) pictorial representation of market movements without any necessity of serious mathematics, 2) can be used by all kinds of traders trading almost all financial instruments, 3) with their small makeup (real-body and shadows) they can carry serious trading info and 4) they are easy to use with other technical analysis tools. Here are some tips for trading with the candlesticks.

Bullish Three Inside Up Pattern

Bullish three inside up is a bullish trend-reversal candlestick pattern indicating the end of an existing downtrend and the start of a new uptrend. It is a three candlestick pattern, regarded as the ‘confirmation of bullish harami candlestick pattern’. This is because the first two candlestick of three inside up pattern forms the bullish harami candlestick, which is a moderately reliable bullish pattern. The third candlestick confirms the start of new uptrend.

McClellan Summation Index

McClellan Summation Index or MSI is a market breadth indicator and is the long-term adjusted version of McClellan Oscillator. It favors intermediate to long-term traders and indicates the strength/weakness of existing trend and predicts trend reversals. McClellan summation index is derived by adding today’s McClellan oscillator value to previous days summation index.

Weekly Stock Trader Newsletter, June 15, 2009

The Week Ahead: The Nasdaq Composite's rise for 13 out of 14 weeks leads all major indexes from the March low. Gas prices have risen 45 straight days as the summer driving season unfolds. Tuesday the Producer Price Index, housing starts, and the industrial production numbers are released. Wednesday brings the Consumer Price Index along with the oil and gas inventory report while the jobless claims figures arrive on Thursday.

Comparing ETFs to Index Funds

Exchange traded funds (ETFs) and Index funds are different types of funds with almost same type of portfolio. Both passively track broad/specific indexes/sectors and try to go with the market. But as they are managed in different ways, they offer different returns, have different risk levels and suit different traders. Here is a comparison of ETFs and index funds.

Day Trading for Living

Day trading of financial instruments (stocks, options, currencies, futures…) has evolved significantly in recent years. With more young traders starting their day trading career, the number of active day traders is consistently increasing and new trading strategies and systems are coming up. Now most day traders trade to make their livelihood, rather than to maximize their portfolio. Trading for living needs some serious attention.

Bullish Breakaway Candlestick Pattern

Bullish breakaway is a market reversal candlestick pattern, indicating the end of an existing downtrend and start of a new uptrend (usually short-term reversal). It is a five candlestick pattern which first indicates the acceleration of existing downtrend, then slowing of it and finally the trend reversal.

McClellan Oscillator Breadth Indicator

McClellan oscillator is an important indicator which evaluates the market breadth or difference between advancing and declining stocks of NYSE and indicates trend changes. It was developed by Sherman and Marian McClellan in 1969. McClellan oscillator is mainly used by intermediate traders and also used by short-term traders especially when it indicates overbought and oversold conditions.

ETF Advantages over Stocks

Exchange Traded Funds (ETFs) are often compared against mutual funds and similar funds, not against stocks and other exchange traded products. ETFs also have some advantages over stocks and thus are handy instruments to include in your portfolio.

Weekly Trader Newsletter, June 8, 2009

The Week Ahead: Unemployment reached a 26 year high to 9.4% while the Dow and S&P 500 hit 11 out of 13 weeks to the upside. Wholesale trade inventories will be announced on Tuesday. Trade balance figures and the Federal Reserve Beige Book of economic activity is released Wednesday. Retail sales and business inventories is due by Thursday while import price data and the University of Michigan's Confidence Index comes out Friday.

Reading the Market with Historic Data

Many experts say that the market works in cycles and thus can predict future trends by analyzing historic market data. While the first saying often found correct the second one is always challenged. Many traders, says that we can’t read/predict market trends based on historic market movements and performances. There are many reasons for this.

Bearish Breakaway Candlestick Pattern

Bearish breakaway is a bearish trend reversal pattern indicating the end of the existing bullish trend and the start of a new bearish trend (usually for a short-term). It is a 5 candlestick pattern which first indicates the acceleration of current trend, then weakening of the same and finally trend reversal.

Mass Index for Trend Reversals

Mass Index is a major indicator of trend reversals developed by Donald Dorsey. It tries to predict trend reversals by calculating the widening and shortening of the daily high-low range. Mass index is an important indicator because it often gives right predictions and works when other indicators miss.

Are ETFs Good for Day Trading?

One of the major advantages of Exchange Traded Funds (ETFs) is that they have great diversity and flexibility to suit almost all trading/investing styles. ETFs also can be day traded; because they are traded just like stocks. But are ETFs suitable for day trading? Here are some things which should be considered.

Weekly Market Newsletter, June 1, 2009

The Week Ahead: The S&P 500 closed its 10th week out of 12 on the upside as the month of June begins. A noon news conference on Monday in New York City is expected for General Motors to announce a chapter 11 filing. Personal income and spending, construction spending, and the ISM Manufacturing Index are also due Monday. Auto sales and pending home sales numbers are released on Tuesday while factory orders and the ISM Non Manufacturing Index are due Wednesday. Chain store sales figures are out on Thursday. The widely anticipated Employment Report comes out Friday.

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