Popular Intra-Day Trading Techniques
There are many strategies that can be learned by day traders. Some of the more popular techniques used by day traders are:
This strategy assumes that the stock being traded will continue its current direction, either moving up or falling down. The idea is to buy a security that has been moving and follow the momentum of the trade.
This strategy assumes the stock can no longer continue trading in its current trend and is due for a reversal. The contrarian trader buys stocks that have been falling or shorts one that has been rising because they expect the trend will change. They usually use technical tools which indicate Overbought and Oversold prices. Continue reading “Popular Day Trading Techniques”
Top Penny Stocks
The top penny stocks are the ones that will make you money. These are shares under $5 in the US and INR 30 in INDIA issued by companies looking to develop and grow their businesses. An ambitious capable management team whose mission is to become strong dominant players in their respective industry runs these fledgling corporations. It’s a sign that these companies are focused on increasing sales, profit and shareholder value.
Top penny stocks are about investing in companies with legitimate businesses. A good indication of the company’s honesty is whether they are up to date on their financial reporting. This shows that the company has real sales and profit. Top penny stocks emphasize investing in quality companies.
The top penny stocks generate extraordinary returns for the investor. These are shares of companies that trade below $5 in the US and INR 30 in INDIA. Companies that issue these shares are young companies that have been in existence for less than five years. The proceeds from these stock issues are used to finance expansion, advance research on proprietary technology or both. Given the brief operating history of these companies, their relatively new products and technology, investing in penny stocks can be very risky. If the right penny stock is selected, the returns to the investor can be many times over. Many of today’s major corporations had their start as a penny stock.
To improve your odds of picking that penny stock winner, here are some points to consider:
The Company Is Rapidly Growing Sales And Profit
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How to Become a Better Trader?
Better Trader: Anyone who wishes to learn how to become a better trader can accomplish that goal if they are willing to get the proper education and put forth the effort to practice and follow directions. While the learning process is different for everyone, depending on their experience and expertise, here are 10 steps that can lead to becoming a better trader.
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is the most exciting yet challenging tasks of earning money through the investment in stocks. There are a lot of misconceptions about investing in stocks.
One of the largest misconceptions of all is that one size fits for all. That isn’t true at all. Other very famous misunderstanding about stock picking is that people think that once they have opted for one strategy after a lot of careful evaluation, they don’t need to change that at all. This is also
Other very famous misunderstanding about stock picking is that people think that once they have opted for one strategy after a lot of careful evaluation, they don’t need to change that at all. This is also the false concept. There is nothing like a perfect stock picking strategy. The most common explanation for not having a perfect stock picking strategy is the change in the economic circumstances of countries which lead to the change in economic conditions of the industries operating in those countries. Such problems totally tilt the balance of attractiveness from one stock to other.
Allocating assets or (capital) amongst different stocks is, therefore, a tricky affair and will always remain a tricky affair forever because of so many uncertainties involved. A lot of theories have been presented about stock picking which may be proven right or wrong.
Then What to do?
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Introduction and how to perform Fundamental Analysis of Stocks
Fundamental Analysis of Stocks is a method which is employed to determine the value of a stock. In the fundamental analysis, the industry to which the stock is related is analyzed. Analyzing the financial statements of the corporation is the way to do. This approach usually looks at the overall health of the economy in which that industry is operating. In the fundamental analysis of stocks, there are again two approaches used to analyze the industry under study. One approach is zoomed in or top down analysis and the other is known as zoom out or bottom-up analysis. This analysis should not be mixed with technical analysis or quantitative analysis.
Fundamental Analysis of stocks is based on the assumption that markets do not reflect all the available information on the stock prices of different companies. For that matter, there must be corrected seen in each of these stocks after some time and whosoever positions himself in time would get benefit from that correction. Top down or zoom in approach mainly focuses first on the national or international economies health. Then they relate economic performance with that of the industry and then they go to the specifics of the firm under consideration. For the bottom-up method, the approach is totally inverse to that of the top-down approach. In this method, the analyst starts from the firm (no matter how small is the size of the firm) and goes up to study the industry and the economic factors that are affecting the firms’ performance.
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Top Five Technical Indicators are the best friends of a Trader
Technical analysis represents the sentiment of the market at a particular time period or during the stretch of a time. Technical analysis has been improving and adding in new things for its followers. As we have already discussed that technical indicators analyze the psychology of investors in a stock market, it is important to understand that dependence on one particular technical analysis indicator won’t be recommended at all. Here are top five technical indicators that can help ascertain the possible direction of the market.
The volume of a stock traded in a market speaks volumes for that stock. Volume shouldn’t be looked at in isolation. Usually, it has to be associated with the price in the market at that time. If you can tightly monitor and correlate the movement of each with the other, this can also help you in determining the probable course the market is going to take.
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In technical analysis, we project the possible future trends based on the past performance of the stock. Since its inception, a lot of theories relating to technical analysis have emerged. Extrapolating past trends into the future are based on three simple assumptions in Technical Analysis. These assumptions are known as pillar assumptions on which all the technical analysis is based.
These three Assumptions in Technical Analysis are
1. Market Discounts Everything
2. Price follows trend
3. History Repeats itself
1. Market Discounts Everything
The technical analyst assumes that the stock price of a company reflected on the stock exchange at any time reflects the true value of the stock. This means that the stock’s price has adjusted itself by incorporating all the information that could affect the price of the stock. So the price of the stock on the stock exchange reflects all the information affecting the stock in its price.
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New day trader’s expectations and how he should be managing his day trading?
If making money while working a completely flexible schedule sounds like the life for you then it is a very good idea to spend some time looking around at the day trading field. With tons of people working for themselves at the hours, they choose to work it can be extremely exciting and rewarding for a lot of people. Learning how day traders actually make their money though can also be very exciting and you are going to have that very opportunity right now.
The best indicator of just how successful a transaction does not always have to be measured in terms of profit though. If you are only looking to make massive amounts of money then you could very well end up being disappointed after your first transaction goes badly. Not all investors are going to find instant success in a bottle with the stock market and day trade is much harder than typical stocks. In order to actually find the results that you want, you need to take some time and carefully review your goals. What do you really intend to pull out of the stock market?
Bad is Good
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Let’s discuss the rule of 72 today
Investors invest for one primary reason – to make a return on their money. Compound interest is the friend of an Investor.
What is Compound Interest?
Compound interest is interest that accrues based on the total balance of principal and accumulated interest. Compound interest is a powerful tool for getting the financial glory.
What is the rule of 72?
The “Rule of 72” is a simple, quick and easy way to calculate the length of time in which money doubles at a certain interest rate.The Rule of 72 is a math formula that tells you how long it will take to double the value of the money you invest:
Firstly, Find out your interest rate…
Second… do the math!
- 72 / interest rate = # of years
- Example: $1000 invested at 6% interest rate
- 72 / 6 = 12 years –> In 12 years $1000 will double at 6%!
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