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Stock Trading

Stock Market Trading 101: Trading With Triangle Pattern

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Being able to recognize chart patterns is a category of technical analysis trading. These patterns provide an significant confirmation for the next trend move. They are one of the most dependable, yet uncomplicated to use technical analysis tools. They are patterns that appear on the charts of stocks that supply you with forecasting tools of forthcoming price movement. A number of patterns are more reliable than others for predicting the price of a stock at a future point in time.

Price can be predicted by patterns because in essence, patterns are really nothing more than an attempt to predict trend continuation or trend reversal at the earliest possible moment in time. These patterns are often the initial initiation that stock traders have to charting the markets. These formations are simply a technique for the common investor to properly position himself for a greater probability of making a profit in this dog-eat-dog world of stock trading.

These patterns repeat themselves in all time frames and in all markets because these formations are a result of human nature and emotional reactions to a stock’s price. These formations appear over and over again for the reason that humans do not change and their emotions will cause them to make the same mistakes time and time again.

Powerful Triangle Patterns

Triangles are some of the most famous chart patterns used in technical analysis today. The three kinds of triangles, which differ in form and inference, are the ascending triangle, descending triangle, and the symmetrical triangle. Whilst the form of the triangle is significant of greater meaning is the direction that the market moves when it breaks out of the triangle pattern.

The reason behind why these patterns are so well-known is that they are pretty easy to identify and are dependable market indicators. Technical traders should show caution in acting on them ahead of time, though (i.e. attempting to speculate on the direction of the breakout). Triangle patterns are not 100% accurate but rather are closer to 75% reliable, therefore it is essential that you place a stop loss. This will protect you from a huge loss on the trade.

Good Ascending Triangle

The ascending triangle consists of a horizontal upper trendline and a rising lower trendline. This formation suggests that the bulls are able to take the stock back up to the horizontal upper trendline resistance time and time again while the bears are losing the ability to take the stock back down to the lower support line (that is rising lower trendline).

The ascending triangle is considered as a more reliable formation when they are formed in an uptrend. Buy signals are given once the price does a breakout above the resistance level. An ascending triangle is bullish in both up trends and down trends. The existence of an ascending triangle pattern usually signifies a positive trend regarding the price per share of the stock you are analyzing.

Evil Descending Triangle

The descending triangle is made up of a falling upper trendline and a flat lower trendline. This formation suggests that the bears are able to take the stock back down to the flat lower trendline support over and over again while the bulls are losing the ability to take the stock back up to the upper resistance line (that is falling upper trendline).

Descending triangles take shape during an overall downtrend as the horizontal support level and the down-trending resistance level that encompass the consolidation zone converge. They frequently imply a continuation of the previous trend. Descending triangles, with a preceding uptrend, are anticipated to break up and out, rather than down and out. Descending triangles provide technical traders the opportunity to make substantial profits over a short period of time. The most common price targets are commonly set to equal the entry price minus the vertical height between the two trendlines.

Wishy-Washy Symmetrical Triangles

Symmetrical triangles develop with lower highs and higher lows. Because of their shape, they can signal either a continuation or a reversal pattern. The price action inside the pattern is somewhat neutral, but in time will do a breakout and go back into the direction of the original trend.

Symmetrical triangle patterns appear when the stock being charted achieves increasingly higher daily low trading prices, while at the same time exhibiting lower intraday highs. This pattern of activity forms a triangle that is symmetrical in nature.

Symmetrical triangle patterns are regularly called spring coils. This is because, as time progresses, prices trade within a tighter range, with the stock making lower highs and higher lows. Emotion builds as the stock goes further into the apex of the formation and eventually a breakout occurs. Breakouts generally happen in the middle or the final third of the triangle as with the other sloping triangles.

Symmetrical triangle breakouts are fantastic entry points, when accompanied by high volume.

Final Thoughts On Breakouts

Breakouts from a triangle, that has become narrow, can be significant because buying or selling interest has built up while the stock price has gone nowhere. Breakouts usually occur after going about two-thirds to three-quarters of the distance between the beginning of the formation and the apex, but there are exceptions. In addition, price can break out to the upside, in which case the pattern becomes a continuation pattern rather than a reversal pattern.

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Stock Trading

Things To Consider For Beginning Investors

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The Internet is a great place for people who are uninformed on the stock market to learn. They want to get started, but don’t know how, so they just Google search “stocks for beginners.” Those people who can’t figure out the stock market probably haven’t invested anything in a few years, and as a result haven’t lost anything of consequence due to the markets. There are a lot of people today who are anxious because they’ve lost money in the markets already.

As a result, it’s important to remember that no investment you make is a sure thing. There are those who have lost more than necessary, due to overconfidence and an overabundance of cash in the market, which backfired on them. Some people didn’t have a diverse enough profile, and sunk all their money into one stock that then fell.

Your age should also play a factor in how much money you have in the market. As you can lose money in stocks, it is not a good idea to invest money you will need or might need soon. As we get older, our need for money for healthcare and other things becomes more imminent and you need money for retirement. Having most of your money in stocks at an older age puts yourself at risk if the market falls.

When you invest in the stock market you should always buy a variety of stocks. This is called stock diversification and is important because you do not want to expose yourself to too much risk. When you buy stocks that are in different industries, you make sure that you will not lose everything if one of those industries happens on hard times. Of course, in a down market where all stocks are suffering as we have now, diversification will seem like it is not working that well.

Right now the stock market is still way down from its highs a couple of years ago. Fortunes have been lost as well as many people’s retirement savings. The problem we all face is that the market has headed back up and many people have not had anything to put back in to make up some of the losses. Others have felt scared to put back any of the money they took out and are now losing out on the possible gains as the market rises again.

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Stock Trading

Forex Trading Software 101 – The Ins And Outs

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The popularity and interest in forex trading has resulted in a number of automated systems to be developed. The market which was once accessible only to bank and larger financial corporations, is now attracting smaller investors. Well this is where currency of one country is traded with that of another country. Trillions of dollars are traded here every day without stopping making it the largest and most active financial markets of the world.

Anyone with a forex brokerage account and some experience in trading can now operate forex trading thanks to the internet, advanced networking and communication technologies. However to remain on top, it requires constant monitoring as global markets are open round the clock. The automated software system lets you choose a currency as well as its asking and selling price before you trade. You need an amount as seed money and a broker then your buy and sell orders will be acted upon straight away.

The automatic systems can help you enjoy the profits from this forex trading without having to be a specialist. Automated trading through managed accounts, the program itself takes the responsibility of trading for you. Since you do not perform the actual trading yourself, these auto systems help you ave time. A reliable trading platform would let you manage a number of accounts at the same time which is impossible in manual trading. When you want to trade in multiple markets with multiple systems, these programs allow you to do this.

The auto forex trading system allows you the flexibility of trading at any time without your presence. Even if you are physically absent from your computer, you need not miss a single profitable trade. It is then easy to operate on different systems and deploy several forex strategies. You can plan your investment and spread your risk when you know that each system is built to be triggered by specific trade indicators.

The automated forex trading system also does away with all human emotions which often affect rational trading decisions. You would have the power to manage several money-pairs and effectively trade in them too.

While you may use an automated forex trading system, if you want to provide an income derived from this well into the future, you cannot expect the system to do it alone; a certain amount of study is still required. Several factors and variables influence the forex market so just using an automated system can not guarantee you long term success in this venture. You can easily program and customize the automated forex trading system to suit your own specific requirements.

If you would like to automate your trading, check out this honest Forex Robot World Cup Review and discover how you can make money with trading forex on autopilot.

Stock Trading

How To Avoid A Stock Market Crash Like 1987 Or 1929

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Everybody knows about them: Stock Market Crashes, the likes of 1987 or 1929. And they are feared among many if not all investors.

Tales have been told of investors going bust, of the savings of an entire generation disappearing, and how it happened quickly and without warning. But is this true? Was there really no warning of an impending stock market crash? In this article I am going to show that there are warning signs, and how you can avoid future crashes.

The simple fact is, in both major stock market crashes like 1987 or 1929, there are a few clues we have that will alert us to a crash in today’s market.

Number one is that prices in the market fell quite a while before the stock market crash occurred. In fact in both cases of 1987 and 1929, prices fell for a full seven weeks, from the peak to the start of the crash.

The second is that even though prices did fall for seven weeks prior to a stock market crash, there was a bounce in between. What this means is that prices fell, then they rose for one to three weeks, before falling back down through the previous trough in price. And the week after is when the stock market crash happened.

If we look at this particular movement on a price chart, it will look like a downwards zig zag. And it was so prominent that Charles Dow wrote about it intensively in the late 1800s – making it his own as it is called today: “Dow Theory”.

Pretty simple so far, isn’t it? But there is one caveat – I know what you’re going to ask. Will a stock market crash happen every time we see a downwards zig zag? Unfortunately not. If it crashed every time, we would have seen dozens over the last hundred years.

But Dow Theory will give you fair warning of a bear market also – in fact the same action occurred in 2007 – long before the “experts” were calling an actual bear market or recession. Sometimes the down move will be severe like 1987 or 1929, sometimes it will be prolonged like in 2008, and sometimes it will simply reverse again and resume an uptrend.

Overall, it gets it right around 70% of the time. Not bad considering most fund managers can’t even claim to be right 50% of the time.

So what does this mean for a trader or investor like you? It’s simple. If you see the price on the index fall, then bounce for one to three weeks and then fall again through the previous trough in price, now might be a good time to lighten some of your positions. It pays to be ready, and if it doesn’t occur you can always get back in.

Avoid the next crash! With many more ways to avoid a stock market crash, as well as a free course on trading and investing at www.ASXmarketwatch.com.

Stock Trading

Stock Broker Jobs

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If you are someone who is interested in the stock market, understands why the stocks of a company rise or fall, has the discipline to persevere in learning continuously, is trying to seek a way to improve yourself even after you have reached a peak, and if you have the integrity to put your client’s best interests in front of your own and not pay attention to how much money you may earn for each transaction, then you might want to look for a job in a brokerage firm.

If you have the desire to be a stockbroker, your task is to advise your customers so they know when to buy and sell stocks; you must, in each and every transaction, achieve the highest profitable transaction.

For you to achieve success in this industry, you have to go through extensive training and licensure exams. You have to pass the General Securities Registered Representative Examination, where you can qualify only after four months of getting experience in a brokerage firm.

After this exam, most states would require you to take the Uniform Securities Agents State Law Examination to determine the extent of your knowledge in the stock market. After you take and pass both exams, most companies put you in classes and training programs for as long as two years. After you go through this grueling process, then and only then will you be given the title of trainee.

And even after you have garnered some experience, and maybe navigated some successful transactions, most employers still require you to continuously improve yourself by attending training and seminars.

So, your job is not only focused on dealing with the clients, but also on how you improve your knowledge on the market and the industry so that you may help your customers gain the most out of every transaction.

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