Stock Market Trading Basics, Basics of Trading

Friday, July 31, 2009

Basic EPS & Diluted EPS

Earnings per Share or EPS is one of the most powerful and popular fundamental indicators of a company or stock; and is the basis for calculating Price to Earnings (P/E) ratio. EPS comes mainly in two forms, Basic Earnings per Share and Diluted Earnings per Share. Basic EPS is a simple calculation in which the company’s earnings are divided by the total number of shares outstanding at that time. For example, $1,000,000 earnings and 100,000 shares outstanding will give a basic EPS of $10. But this is not very accurate from an investor’s point of view as there are many other factors to consider.

Thursday, July 30, 2009

GAAP and Non-GAAP Earnings

GAAP and Non-GAAP are two different methods to record and report accounting information. GAAP refers to Generally Accepted Accounting Principles that are commonly accepted and are imposed on companies in order to provide investors consistent financial information, so they could examine the health of the company before investing. GAAP earnings refer to the earnings of a company as calculated by applying GAAP or Generally Accepted Accounting Principles.

Wednesday, July 29, 2009

Three Stars in the South Candlestick Pattern

Three stars in the south is a bullish reversal candlestick pattern indicating the start of a new uptrend after an established downtrend. This is a rare candlestick formation which is formed of three bearish (colored or black) candlesticks. The bullish three stars in the south pattern is similar to the three black crows candlestick pattern, and the first two candlesticks in the pattern resemble hammer candlesticks.

Tuesday, July 28, 2009

Projection Bands & Oscillator Indicators

Projection bands are banded indicators used for forecasting future minimum and maximum price levels. Both projection bands and oscillator indicators were developed by Mel Widner and introduced in 1995. Projection bands resemble other band indicators such as moving average envelopes and Bollinger bands and have characteristics of channel indicators like Raff regression channels.

Monday, July 27, 2009

ETF Investments for Uncertain Future

After the recent economic recession, many traders are reluctant to risk their money as much as they were doing in the past. Most traders now tend to place the safety of invested money over ROI. Being diversified, liquid and traded like stocks, exchange traded funds (ETFs) would make safer investments. Traders can follow different strategies for this purpose.

Saturday, July 25, 2009

New Dynamically Updated Stock Trading Tools

We have just created some handy pages for everyone to stay current with stock market happenings. Here are links.

1. Upcoming Earnings - http://www.nobletrading.com/report/upcoming.php

2. Upgrades - http://www.nobletrading.com/report/upgrades.php

3. Downgrades - http://www.nobletrading.com/report/downgrades.php

4. Coverage Initiate - http://www.nobletrading.com/report/coverageInitiate.php

5. Coverage Reitrate - http://www.nobletrading.com/report/coverageReitrate.php

6. Economic Calendar - http://www.nobletrading.com/report/economicCalendar.php

Remember to bookmark & share them.

Let us know your feedbacks.

Happy Trading
NobleTrading

Friday, July 24, 2009

Methods to Measure Stock Volatility

Volatility is one of the major profit determining factors which should be measured correctly for executing a successful trade. Different traders use different indicators for measuring the volatility associated with an instrument. Some popular ones are discussed here.

Tuesday, July 21, 2009

Recommendations for Investing in HYIPs

It is best to stay away from High Yield Investment Programs (HYIPs). According to statistics, clients who lose their money are much more than those who are able to get their initial investment and interest. However, these programs are highly attractive and our greed drives us to invest in them. These tips are for those who can’t control their greed.

Bearish Separating Lines Pattern

Bearish separating lines pattern is a bearish trend continuation candlestick pattern, which indicates the continuation of an existing downtrend even after a long bullish day. This is a two candlestick formation, comprising a bullish and a bearish candlestick. Bearish separating lines pattern resembles bearish kicking candlestick pattern, but there is no gap between the candlesticks and the candlesticks are not total marubozu.

Average Directional Movement Index Rating

Average Directional Movement Index Rating or ADXR is an indicator created by smoothing the Average Directional Index (ADX) indicator. The smoothing helps trend-traders to avoid small and short-term price ups and downs and to properly use other trend-analysis tools. ADXR is calculated by taking the average of two ADX values; one the current ADX value and other the ADX value n periods before.

ADXR = (ADX current + ADX n) / 2

Monday, July 20, 2009

ETF Day Trading Plan

Day trading exchange traded funds (ETFs) can be less risky than day trading stocks but can also offer less reward. For more insights read "Are ETFs good for day trading?" Day trading of ETFs demands a sound trading plan. Below are certain points to be considered when developing your day trading plan.

Friday, July 17, 2009

High-Yield Investment Programs or HYIPs

High-yield investment program (HYIP), as the name suggests, is an investment program which offer high (above normal) returns; can be upto 50% of investment per month. Although there are some reliable HYIPs there, most of these programs are fraud investment programs which use the classical ponzi scheme. These HYIPs use investments from subsequent tiers to pay (amount plus interest) to previous tiers.

Thursday, July 16, 2009

Bullish Separating Lines Pattern

Bullish separating lines is a bullish trend continuation pattern, indicating the continuation of an existing bullish trend; even after a long bearish day. This is a two candlestick pattern, formed of a bearish candlestick and a bullish candlestick. Bullish separating lines pattern resembles Bullish Kicking Candlestick Pattern, but it does not has a gap between the real-bodies of candlesticks and is also less reliable.

Wednesday, July 15, 2009

Raff Regression Channel

Raff regression channel, also known as regression channel, Raff regression and linear regression channel is a handy indicator for finding support and resistance levels for trends. The indicator was developed by Gilbert Raff. Raff regression channel is an application of linear regression trendlines, which uses the least squares fit method to plot trends.

Tuesday, July 14, 2009

ETFs Pair Trading Strategy

Pair trading of Exchange traded funds (ETFs) is a less explored ETF trading strategy, which can be used to profit from any market condition. Find out more about pairs trading strategy. It is a market neutral strategy with less downside risk. The first step in pair trading is finding two related ETFs, that is, ETFs which move in the same direction most of the time. Here are some ETF pair trading opportunities.

Monday, July 13, 2009

Weekly Market Update Letter, July 13, 2009

The Week Ahead: A drop in world markets, a decline in June consumer sentiment, and growing uncertainty over upcoming earnings reports are just some of the negatives putting pressure on the markets recently. Watch the retail sales report, the PPI, and business inventory numbers that come out on Tuesday. The CPI and industrial production calculations arrive on Wednesday while the jobless claims and housing starts numbers are released Thursday and Friday respectively.

Friday, July 10, 2009

Requirements of Short-Term Trading

Short-term trading strategies, especially day trading and swing trading, demand high levels of discipline and concentration. These strategies can work in any market condition for any instrument (stock, forex, futures, funds, etc) but each of these instruments/markets needs different strategies and approaches. There are 5 basic requirements for implementing short-term trading strategies.

Thursday, July 9, 2009

Bearish Three Outside Down Pattern

Three outside down is a highly reliable bearish market reversal pattern, which indicates the end of an existing uptrend and the start of a new downtrend. This three candlestick formation is regarded as the confirmation of bearish engulfing pattern; because the first two day’s candlesticks form bearish engulfing pattern and the third candlestick confirms the trend reversal.

Wednesday, July 8, 2009

Time Series Forecast indicator

Time Series Forecast or TSF indicator is a trend indicator which shows the underlying trend of a security and tries to predict future price movements. The indicator works on the principle of least-squares fit method and is plotted by calculating the linear regression trendlines.

Tuesday, July 7, 2009

ETFs Long Term Investing Tips

Exchange Traded Funds (ETFs) are really handy tools for building an investing portfolio which needs passive management and less screening skills. An investment portfolio comprising mainly of ETFs can offer more control over portfolio management and returns which equal (or exceed) tracking markets. Here are some tips for long-term ETFs investment.

Monday, July 6, 2009

Weekly Stock Market Review Letter, July 6, 2009

The Week Ahead: The unemployment rate at 9.5% is now near a 26 year low with over 6 million jobs lost since the beginning of 2008. A relatively quiet week for the markets has June's ISM Non-Manufacturing Index to start things off on Monday to gauge the service side of the economy. Alcoa will officially kick off the second quarter earnings season with its Q2 report on Tuesday afternoon. The weekly jobless claims numbers along with the June chain store sales report on Thursday are the only other noteworthy reports.

Friday, July 3, 2009

Why Limiting Losses are so crucial?

Limiting your trading losses is one of the four basic trading principles. But many traders, especially beginners, forget it. They place stop-losses but then lower those; waiting for market reversal. Often this market reversal does not occur and they have to close their position with high losses. Being optimistic they think that they can make up these losses with the profits from subsequent trades. This is a hard task; below is why.

Thursday, July 2, 2009

Bullish Three Outside Up Candlestick

Bullish three outside up is a highly reliable candlestick bullish reversal pattern which indicate the end of an existing downtrend and the beginning of new downtrend. It is a three candlestick formation, which is regarded as the confirmation of bullish engulfing pattern, because the first two candlesticks forms the bullish engulfing pattern, and the third candlestick confirms the trend change.

Wednesday, July 1, 2009

Linear Regression Trendline & Indicator

Linear regression trendline is a simple statistical indicator to predict future prices/trends based on past prices; or to extend past prices to the future. It is an indicator based on linear regression. Linear regression trendline is plotted as a straight line through the past price chart using the least squares method. This helps in minimizing the distance between prices and the trendline.

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