The second type of exchange is the virtual sort called an over-the-counter (OTC) market, of which the Nasdaq is the most popular. These markets have no central location or floor brokers whatsoever. Trading is done through a computer and telecommunications network of dealers. It used to be that ... Views: 1244
Stock prices change everyday by market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater ... Views: 927
On Wall Street, the bulls and bears are in a constant struggle. If you haven't heard of these terms already, you undoubtedly will as you begin to invest.
The Bulls
A bull market is when everything in the economy is great, people are finding jobs, GDP is growing, and stocks are rising. Things ... Views: 934
often, one of the first questions an investor asks is “What stock should I buy?” This question can involve a great deal of time and analysis. In many cases, the average investor will want to find out what the company does; review its financial statements; see if it pays a dividend, ... Views: 1121
If you want to start with stock market trading, you must know some of the aspect related to stock market. With no knowledge of stock market and the careful planning, there is very little success for stock traders. To find success in the stock market, a person needs to know the attributes and ... Views: 1401
You've probably heard about "fast markets" in the news. But what does it really mean? What are the dangers of a fast market? How can you protect yourself as an investor?
We will discus the following topics related to fast markets:
A Fast Market in Action
A fast market is an event that's ... Views: 1181
The annual dividend is the total amount of dividends you could expect to receive if you held the stock for a year and there was no change in the company’s dividend payment. It is based on the current quarterly dividend payment rate projected forward for four quarters.
There was a time ... Views: 999
1. Skepticism about past returns is crucial. The truth is, much as you may wish you could know which funds will be hot, you can’t and neither can the legions of advisers and publications that claim they can. That’s why building a portfolio around index funds isn’t really ... Views: 2556
Each of the intraday trading techniques discussed so far have relied on reference levels arrived at by means of mathematical calculations. The technique iscussed in this section, in contrast, will deal with a set of support and resistance levels which are much more intuitively obvious. In short, ... Views: 780
Judgements made about likely market behavior which are based on momentum analysis can be even more productive if we have predetermined levels available which can act as price templates in interpreting the day's trading activity. The Pivot System is one such approach.
Floor traders and other ... Views: 846
As helpful as Pivot System levels often are a significant drawback to their use lies in the fact that they are calculated from the prior day's price action, and may not accurately reflect recent changes in market psychology. Effective intraday trading also requires a means of identifying support ... Views: 2155
Overtrading is the cause of more losses than anything else in Wall Street. The average man does not know how much capital is required to make a success and he buys or sells more than he should. Therefore he is forced to get out of the market when his capital is nearly exhausted and probably ... Views: 809
If you can not follow a rule, do not begin speculating or investing, as you are sure to lose. Learn to adhere strictly to a rule or do not follow it at all.
The following rules should be carefully studied and applied in your trading:
Capital Required
You would not try to run an automobile ... Views: 951
Remove the looser and keep the winner
For many it is worse than having a tooth pulled to sell a stock for a price lower than what they paid for it. If you buy a stock for $20 and it drops to $10, so long as you don’t sell, then it can be referred to as an unrealized loss. In this case you ... Views: 813
Invest in quality businesses, not stock symbols
For most people investing in a stock is little more than watching the trail left by the stock symbol as its price wanders along some drunken path. They know that the symbol is associated with a company while not being too sure what is expected of ... Views: 758
1. Is this a good business run by smart people?
This may include items such as quality of earnings, product lines, market sizes, management teams, and the sustainability of competitive positioning within the industry.
2. What is this company worth?
Value investors perform fair value ... Views: 829
Long trading is when you buy a stock with the intention of later selling it at a higher price. Shorting stock is when you sell stock with the intention of later buying it back at a lower price. Short trading appeals to many on the basis of market cycles, in which downtrends are virtually ... Views: 872
Unlike scalp and swing trading, core trading takes advantage of situations in the market that require longer lengths of time to develop. For these types of trades, market assessments and decisions are generally made after market hours due to the busy activities of the trading day. Both detailed ... Views: 1299
Only an immortal trader would be able to accurately predict the sway of the stock market and win every trade. Since this is highly unlikely, we are left to rely upon our experience, knowledge, risk management assessment, and strategies of various trading styles to survive and prosper in an ... Views: 1761
You can have all the resources, tools, knowledge and experience at your disposal, but if you cannot get a grip on your emotions, most likely you won’t do very well in the stock market. Active participation on a daily basis can wear and tear on your nerves, especially in the NASDAQ Level II ... Views: 984
Like so many other industries, the Internet has changed the market and the way we do business. The stock market is no longer a members only field game of stock brokers playing the market.With the click of a button, the average individual now has access to the same information and facts that only ... Views: 801
So you want to make money on the Internet. Millions worldwide are trying to do so. The first hurdle they have to master is to filter all possible opportunities to find out that more than 80% of them are a hoax programs that appear to take your money and after 3-4 months they just disappear. The ... Views: 832
The vital component is the trading plan. This does not need to be overly complex. You just need to know what you will do if the share price goes up, down or sideways. If you can cover these three things then you have a contingency for anything the share price can throw at you. And more ... Views: 777
Typical events that can cause a stock’s price to rise:
- Negative news reports about a company’s competitors: If they are in trouble, their customers may seek alternatives to buy from, including your company.
- Positive news reports about a company: The news may report that a ... Views: 862
Leaders And Downtrends
When a severe correction hits the market, the biggest leaders tend to drop the most. For one, they have the most gains to lose. Many of the strongest stocks that drove the Nasdaq to a peak of 5132 in March of 2000 fell 90% below their highs. While the major averages were ... Views: 636
When a severe correction hits the market, the biggest leaders tend to drop the most.
Why?
For one, they have the most gains to lose. Many of the strongest stocks that drove the Nasdaq to a peak of 5132 in March of 2000 fell 90% below their highs. While the major averages were selling off in ... Views: 770
To be highly accurate in any pursuit, you have to carefully observe and analyze the object at hand. The stock market is no different. The idea may seem simple enough, but even with their hard-earned money on the line, you'd be surprised at how often people argue with the facts that are right in ... Views: 751
Relying on the primary market indexes and studying their daily price and volume interplay is one of the best possible methods for analyzing the market's behavior and determining its overall direction and health. The second best method is studying the current and recent action of market leaders. ... Views: 845
The direct cost to shareholders of stockoption compensation is the dilution of their ownership interest. A common managerial response to the dilution is to buy back outstanding shares. The trouble with that solution is that it devours corporate funds that might be more profitably deployed. ... Views: 797
Trader volatility arises when trades are made for purposes unrelated to the fundamental values of a business. These trades drive prices to points related more to the motives of the trader than to the business value of the company.
The wide range of trading decisions that cause price moves ... Views: 829
Return on assets is the amount a business earns on all its resources not only shareholder equity and long-term borrowing but short-term resources generated by effective management of working capital. A business may seek short-term, low-rate loans or buy goods on credit that it resells for cash, ... Views: 2685
The growth in the number and size of margin accounts for stocks especially among day traders suggests that many people foolishly neglect these simple truths. From 1996 to 1999, margin debt rose nearly fivefold at on-line brokerage firms and doubled among NYSE member firms. During the decade of ... Views: 1660
You might ask whether it is worth your time to do hardheaded analysis of business or whether you would be better off letting other people do the work and then free riding on their effort. Economists illustrate this free rider strategy by positing a country that taxes its citizens in order to ... Views: 831
Despite the widespread agreement, some participants in the debate remained skeptical. Indeed, prescient commentators of that era ocProzac Market ocasionally expressed the fear that the interrelationships of stockprice changes are so complex that standard tools like these cannot reveal them. That ... Views: 952
As dull or cumbersome as the topic sounds, financial ratios are indeed the “meat” of analyzing stocks. Sadly, most investors don’t exercise their due diligence when it comes to doing some relatively easy things to make sure that the company they’re investing in is a good ... Views: 5712
Bull markets tend to start at the depths of pessimism the same way that dawn starts at the edge of darkness.
People have probably just been beaten up by a bear market. The phrase I m into stock investing is about as welcome in polite conversation as “I have a contagious disease.” If ... Views: 1100
What’s the number one reason people invest in stocks? To grow their wealth. Yes, some people invest for income (in the form of dividends), but that’s a different matter. Investors seeking growth would rather see the money that could have been distributed as dividends be reinvested in ... Views: 859
Market risk
People talk about the market and how it goes up or down, making it sound like a monolithic entity instead of what it really is a group of millions of individuals making daily decisions to buy or sell stock. No matter how modern our society and economic system, you can’t escape ... Views: 2560
When you buy stock, the simplest type of order is a market order an order to buy or sell a stock at the market’s current best available price. It doesn’t get any more basic than that. Here’s an example-
Kowalski, Inc., is available at the market price of $10. When you call up ... Views: 876
When you decide to start investing in the stock market, you have to somehow actually pay for the stocks you buy. Most brokerage firms offer investors several different types of accounts, each serving a different purpose. Three of the most common types in the following sections.
The basic ... Views: 768
The pump and dump is a classic scam that usually shows up in bull markets. The scam works best with small-cap or (even better) microcap stocks in other words, small companies that have relatively few shares or small capitalization. Scams are at their most effective when they can play on the two ... Views: 901
Not all investors want to take on the risk that comes with making a killing. Some people just want to invest in the stock market as a means of providing a steady income. They don’t need stock values to go through the ceiling. Instead, they need stocks that perform well consistently.
If ... Views: 800
An index is a statistical measure that represents the value of a batch of stocks. Investors use this measure like a barometer to track the overall progress of the market (or a segment of it). The oldest stock market index is the Dow Jones Industrial Average (DJIA or simply “The ... Views: 850
Profit you make from your stock investments can be taxed in one of two ways, depending on the type of profit:
Ordinary income
If the profit you make from stock investments is taxed, your profit is taxed at the same rate as wages at your full, regular tax rate. If your tax bracket is 28 ... Views: 899
When you’re ready to dive in and start investing in stocks, you first have to choose a broker. It’s kind of like buying a car. You can do all the research in the world and know exactly what kind of car you want to buy, still, you need a venue to do the actual transaction. Similarly, ... Views: 952
Liabilities are simply the bills that you’re obligated to pay. Whether it’s a credit card bill or a mortgage payment, a liability is an amount of money you have to pay back eventually (with interest). If you don’t keep track of your liabilities, you may end up thinking that you ... Views: 762
Rising and falling interest rates offer a special risk to stock investors. Historically, rising interest rates have had an adverse effect on stock prices. Hurting a company’s financial condition. Rising interest rates have a negative impact on companies that carry a large current debt load ... Views: 1857
Economics. Double ugh! No, you aren’t required to understand “the inelasticity of demand aggregates” or “marginal utility”. But a working knowledge of basic economics is crucial to your success and proficiency as a stock investor. The stock market and the economy ... Views: 759
Your investing style isn’t a blue-jeans-versus-three-piece-suit debate. It refers to your approach to stock investing. Do you want to be conservative or aggressive? Would you rather be the tortoise or the hare? Your investment personality greatly depends on your purpose and the term over ... Views: 829