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understanding market dynamics

Dramatic market action that is common at tops and bottoms is known as blow offs and selling climaxes. Blow offs occur at tops, they usually occur after prices have moved higher over an extended period of time. At the end of the upward moves, prices rally sharply accompanied by a large increase in volume. Typically, all of those that were going to buy at this level have done so. Profit taking occurs and prices reverse, often suddenly, to the downside. Selling climaxes are simply the opposite of blow offs. They occur at the market bottom after prices have been declining for an extended period of time. Bargain hunters then jump in buying, reversing the trend, and sending prices higher. Through the years, investors have searched diligently for ways to identify important market bottoms. And the selling climax has been one of the major focuses of that search. A selling climax is generally defined as that capitulation of investors near major market bottoms, in which stocks are dump or abandon...
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EVALUATING GOOD STOCKS TO PICK

Picking winning stocks involves understanding what makes one stock great and another stock ho-hum. It involves getting your hands dirty with financial ratios and looking at markets, but finding good investments is not as hard as you may think. 1,ROI(RETURN ON INVESTMENT) is a Leading Measure of Company's Efficiency 2,Picking Stocks begins with Assessment of Need 3,Following the Stock Market Herd Often Wrong Decision 4,Don't try to Time Bottom of Falling Stock Market 5,Understanding What Effects(what move the prices) Stock Prices 6,A Good Company with a low P/E(PRICE EARNING RATIO) 7,understand the cashflow statement explicitly 8,What is an Economic condition and Why should Stock Investors Care
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Stock Investment Strategies

Investing without a stock investment strategy is like searching for a treasure without a map. The correct stock investment strategy should not only define your investment methods, but will allow you to achieve your financial goals within your specified timeframe. Four factors that determine your stock investment strategy To determine your stock investment strategy you first will need to know the following: GOALS - The total amount of money you will need to accomplish your goals. TIMEFRAME - The length of time until you need to achieve your goals. RISK LEVEL - How much risk you are willing to take to achieve your goals. RETURN LEVEL - What returns you are you expecting to achieve on your investments. If you don't know what your financial goals are take a moment right now to write out where you want to be financially in the future. You may want to retire early, pay for college or just live more comfortably. Make sure to attach a dollar amount that indicates how much you need for that...
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signs of rising stock price

How to notice a stocks potential rise before anyone else. Charts, analysts advice, and a host of other methods are used and useful, but you want to notice the characteristics even before the big guns start to focus their attention on these stocks. Let's consider what a chart can tell you. Simply stated, the highs, lows, and all points in between. But that's not the only things you need to look for. One example is a candlestick chart that can tell you where a stock started, ended, and traded all day, and what relevance this has to a stocks performance. There are charts that graph a stocks performance, and let you get a feel for where the stock may be heading. While using charts you start to look for tell tale signs of movement, not just up or down, but a trend that is developing. The simplest way to check is to see if what is called a "head and shoulders" pattern has developed. What you want to see is something that actually looks like a head and shoulder pattern, whet...
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The science of money making in investment

Yesterday's technical look at ProShares Ultra Financials ( UYG ) didn't help much, as it showed a slightly bullish bias going into a day that saw the market sell off again to the tune of -9% for the S&P 500.It's important to distinguish your time frames when trying to profit from this market. If you're looking to pull money from it each day or week, then tight stops are essential, per my Tuesday article on UYG and ratcheting stops higher to lock in gains. The leveraged ETFs are moving so much each day that they're like money machines if you watch them closely and catch just a small part of a trend -- or a big trend like Monday's surge higher for the longs or yesterday's plunge lower for the shorts.Here's how that can look when done right. On Monday, you would have seen UYG bouncing off support at $10 after surging upward from $8 Friday. You wouldn't care about missing the 25% run from $8 to $10 (unless you already owned it on Friday when it was ...
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