ELLIOTT WAVE

A flat correction differs from a zigzag in that the subwave sequence is 3-3-5, as shown in Figures 1 and 2. Since the first actionary wave,

Fibonacci studies: arcs, fans, retracements, and time

Overview: Leonardo Fibonacci was a mathematician who was born in Italy around the year 1170. It is believed that Mr. Fibonacci discovered..

Indicator

The Negative Volume Index (“NVI”) focuses on days where the volume decreases from the previous day. The premise being that the “smart money” takes positions on days when volume decreases

Basic Technicals

MACD technical analysis MACD technical analysis stands for moving average convergence/divergence analysis of stocks.

Fundamental Analysis

Doubling Stocks Review: Is this a scam? If you are looking for the truth about doubling stocks this is a necessity. One always thought there was something wrong with a doubling of stocks.

Wednesday, December 28, 2011

Difference between stock split and bonus?

Recently a question was posted to explain the Difference between stock split and bonus
Since its a Topic which everybody should understand,I am giving a detailed analysis on the subject.
First before Giving Any Difference lets know the Similarity.

Assume a Share is trading at Rs 100 and it issues 1 bonus Share for every one share held or it spilts the stock in two.Theoretically it will trade at Rs 50 after bonus or Split.practically it may trade at Rs 40 or Rs 60Depending on market conditions in Both Cases no of Shares will Double and net worth will remain the Same.

A bonus is a free additional share that is given to you without changing any face value. A stock split is the same share split into two.so think like this you have 100 rs and then you are taken that 100 rs and given 2 Fifty Rupees , you might have 2 counts now but the worth is same as 100 rs , but in case of Bonus you are given a extra 100rs .

In a stock split, the number of shares increases but the face value drops. The face value never changes for a bonus shares.

Tuesday, December 20, 2011

Candlestick Bullish Reversals

There are dozens of bullish reversal candlestick patterns. I have elected to narrow the field by selecting the most popular for detailed explanations. Below are some of the key bullish reversal patterns with the number of candlesticks required in parentheses.

*Piercing Pattern
*Bullish Harami
*Hammer
*Inverted Hammer (1)
*Morning Star
*Bullish Abandoned Baby (3)

Before moving on to individual patterns, certain guidelines should be established:


1.Most patterns require bullish confirmation.
2.Bullish reversal patterns should form within a downtrend.
3.Other aspects of technical analysis should be used as well.

Bullish Confirmation
Patterns can form with one or more candlesticks; most require bullish confirmation. The actual reversal indicates that buyers overcame prior selling pressure, but it remains unclear whether new buyers will bid prices higher. Without confirmation, these patterns would be considered neutral and merely indicate a potential support level at best. Bullish confirmation means further upside followthrough and can come as a gap up, long white candlestick or high volume advance. Because candlestick patterns are short-term and usually effective for only 1 or 2 weeks, bullish confirmation should come within 1 to 3 days after the pattern.

Existing Downtrend
To be considered a bullish reversal, there should be an existing downtrend to reverse. A bullish engulfing at new highs can hardly be considered a bullish reversal pattern. Such formations would indicate continued buying pressure and could be considered a continuation pattern. In the Ciena example below, the pattern in the red oval looks like a bullish engulfing, but formed near resistance after about a 30 point advance. The pattern does show strength, but is more likely a continuation at this point than a reversal pattern.

The existence of a downtrend can be determined by using moving averages, peak/trough analysis or trendlines. A security could be deeme in a downtrend based on one of the following:

1.The security is trading below its 20-day exponential moving average (EMA)
2.Each reaction peak and trough is lower than the previous.
3.The security is trading below its trendline.

These are just examples of possible guidelines to determine a downtrend. Some traders may prefer shorter downtrends and consider securities below the 10-day EMA. Defining criteria will depend on your trading style and personal preferences. Other Technical Analysis Candlesticks provide an excellent means to identify short-term reversals, but should not be used alone. Other aspects of technical analysis can and should be incorporated to increase reversal robustness. Below are three ideas on how traditional technical analysis might be combined with candlestick analysis.


1.  Support: Look for bullish reversals at support levels to increase robustness. Support levels can be identified with moving averages, previous reaction lows, trendlines or Fibonacci retracements.Juniper Networks (JNPR) advanced from 75 to 175 in less than two months. The stock retraced about 50% of this 100 point advance and formed a large bullish engulfing pattern around 125. This pattern was confirmed with two subsequent advances above the down trendline.

2.  Momentum: Use oscillators to confirm improving momentum with bullish reversals. Positive divergences in MACD, PPO, Stochastics, RSI, StochRSI or Williams %R would indicate improving momentum and increase the robustness behind a bullish reversal pattern.

3.  Money Flows: Use volume-based indicators to access buying and selling pressure. On Balance Volume (OBV), Chaikin Money Flow (CMF) and the Accumulation/Distribution Linecan be used in conjunction with candlesticks. Strength in any of these would increase the robustness of a reversal.For those that want to take it one step further, all three aspects could be combined for the ultimate signal. Look for bullish candlestick reversal in securities trading near support with positive divergences and signs of buying pressure.

A number of signals came together for Compaq (CPQ) in early July. After a steep decline in late June, the stock formed a series of spinning tops near support at 25. A bullish engulfing pattern formed in early July and this was confirmed three days later with a strong advance above 27. The 10-day Slow Stochastic Oscillator formed a positive divergence and moved above its trigger line just before the stock advanced above 27. Although not in the green yet, CMF showed constant improvement and moved into positive territory a week later.

Monday, December 19, 2011

Trend Line Break

Trend Line Break

Trend Line Break is a reversal chart patterns, where a stock in an up trend, breaks out of a support trend line and a stock in a down trend, breaks out of a resistance trend line. This is a very basic, simple, time tested chart pattern, which with an addition of a trend following indicator, gives an excellent result.
Pattern Formation

First learn to draw Trend Lines. Draw resistance trend lines in a down trend and support trend trend lines in an up trend. When ever a trend line broken out by the moving stock price, we get trading opportunity.

Volume invariably rises at the break out point, which indicates a strong trade.

See how all the trades are profitable. This being an up trend, taking long trades at the break out of resistance trend lines, gives more profitable trades.

Trend line breaks

Trend line breaks are counter trend trades, because they expect the price to continue in its new direction (against the previous trend). For an upward trend line (and an upward trend), a trend line break would be a short trade, where the trader sells at a price near the trend line, and then buys at a price below the trend line. For a downward trend line (and therefore a downward trend), a trend line break would be a long trade, where the trader buys at a price near the trend line, and then sells at a price above the trend line.
Trend line breaks are not usually traded independently, but are combined with other trading information, such as price movement or volume information

How to trade?
Trade minor trend breakout in the direction of an intermediate trend or trade intermediate trend breakout in the direction of a major trend. Use an indicator to go with a trend. Wait for the break out bar to close. Then only sell below the low of the support breakout bar and buy above the high of the resistance breakout bar.

Wednesday, December 14, 2011

Market volatility changes can warn of impending trend changes in price

Market volatility changes can warn of impending trend changes in price.  Option and futures premiums increase due to an increase in volatility.  There are two major Indices that track volatility.  The first is the VIX or Volatility Index.  Developed in 1993, the CBOE's volatility index is a measure of volatility of the US equity market.  The VIX is calculated by taking the weighted average of the implied volatilities of eight OEX calls and puts with an average time to maturity of 30 days.  Most often it is considered a contrarian indicator, where high reading are considered oversold territory and low readings are overbought.  Notice as well that volatility measures often move inversely to the price trend of major indices. 

Rising volatility often confirms expectation of declining markets and corresponds with downward moving prices.  Falling volatility often accompanies rising markets and supports a bullish outlook in near term.  These are only indications but can be used to help build supporting evidence of price trend.  A confirming VIX reading supports price trend indications present in the markets.  A VIX that is not confirming price trend may suggest that the price trend is suspect. 

Volatility usually moves inversely to price trends.
The second measure of volatility found in the market place is the CBOE Nasdaq Volatility Index.  One use in tracking volatility for option traders is in recalculating option price projections based on projected changes in volatility.  Determining the current volatility and extrapolating future possible values of volatility allows option traders to use option pricing systems like the Black Schoels to calculate possible price projections for an option given an expected volatility. 

A declining volatility level over time suggest that bullish sentiment exists in the markets for the longer term price trend.  A rising volatility level over time carries bearish sentiment.  Tracking volatility allows a glimpse of what traders feel are the possibilities of price trend in the near term.  Falling values in volatility suggest a bullish bias.  Rising volatility levels suggest a bearish bias.

Tuesday, November 29, 2011

ELLIOTT WAVE _ Flats (3-3-5)

A flat correction differs from a zigzag in that the subwave sequence is 3-3-5, as shown in Figures 1 and 2. Since the first actionary wave, wave A, lacks sufficient downward force to unfold into a full five waves as it does in a zigzag, the B wave reaction, not surprisingly, seems to inherit this lack of counter-trend pressure and terminates near the start of wave A. Wave C, in turn, generally terminates just slightly beyond the end of wave A rather than significantly beyond as in zigzags.
In a bear market, the pattern is the same but inverted, as shown in Figures 2 and 3.

Flat corrections usually retrace less of preceding impulse waves than do zigzags. They participate in periods involving a strong larger trend and thus virtually always precede or follow extensions. The more powerful the underlying trend, the briefer the flat tends to be. Within impulses, fourth waves frequently sport flats, while second waves do so less commonly.

What might be called “double flats” do occur. However, Elliott categorized such formations as “double threes,”.

The word “flat” is used as a catchall name for any A-B-C correction that subdivides into a 3-3-5. In Elliott literature, however, three types of 3-3-5 corrections have been identified by differences in their overall shape. In a regular flat correction, wave B terminates about at the level of the beginning of wave A, and wave C terminates a slight bit past the end of wave A, as we have shown in Figures 1 through 2. Far more common, however, is the variety called an expanded flat, which contains a price extreme beyond that of the preceding impulse wave. Elliott called this variation an “irregular” flat, although the word is inappropriate as they are actually far more common than “regular” flats.

Tuesday, November 22, 2011

Stock Reviews Doubled

Doubling Stocks Review: Is this a scam? If you are looking for the truth about doubling stocks this is a necessity. One always thought there was something wrong with a doubling of stocks. It is so cheap. We know that not everyone can make money for their newsletter. Still, it is very good. One keeps wondering why they do this. What does it do for them? At first I thought of buying their own picks prior to their release. Then when they start to buy subscribers, the prices has gone up and sells (pump and then dump). However, it is relieving to say that there seems to be the case.
 So what is their motivation and where is it? But where did the money come from to buy it? Are they just fabulously rich and share with the world? I am an optimist, but I never believed that to be true. That is when I found Doubling Stocks recommendations are biased. Not all, but enough. They are paid to promote certain penny stocks; they do not accept shares for payment, they paid in hard cash $ 75,000 for most of the stocks they promote. Just read the fine print.

But Doubling Stocks does not seem to value their reputation, so as not to promote any penny stock to anyone who has the money to pay them. Stocks are worth it for me to promote and provide long-range promise. So again do your homework, research, technical analysis, and managed through, before deciding whether to promote it. The end result is still pretty solid choice. Even so, I was concerned for approval and action to promote penny stocks. Initially, he made me want to run away and stop listening to their advice. You see, we are always thinking of being involved in a position that was promoted was a bad thing.

Apparently I was wrong. I started watching the stocks doubling stocks they were promoting, and actually found the system uses it – and it works almost always. Because they have worked so hard to make sure that the companies involved are in the earth, even those who do not go as planned are not losers’ media. Now, I have the pleasure of the people for promotion. With this simple system, it really makes things easy for me. I no longer spend hours, days or even weeks trying to find the right material to invest in what I did. And my success rate has skyrocketed. Only takes me about an hour a week to do my research, my choice to buy the shares.

Friday, November 18, 2011

Moving Average Convergence-Divergence (MACD)


Introduction:

Developed by Gerald Appel in the late seventies, Moving Average Convergence-Divergence (MACD) is one of the simplest and most effective momentum indicators available. MACD turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average. As a result, MACD offers the best of both worlds: trend following and momentum. MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge. Traders can look for signal line crossovers, centerline crossovers and divergences to generate signals. Because MACD is unbounded, it is not particularly useful for identifying overbought and oversold levels.

Calculation:

MACD: (12-day EMA – 26-day EMA)
Signal Line: 9-day EMA of MACD
MACD Histogram: MACD – Signal Line

Standard MACD is the 12-day Exponential Moving Average (EMA) less the 26-day EMA. Closing prices are used for these moving averages. A 9-day EMA of MACD is plotted along side to act as a signal line to identify turns in the indicator. The MACD-Histogram represents the difference between MACD and its 9-day EMA, the signal line. The histogram is positive when MACD is above its 9-day EMA and negative when MACD is below its 9-day EMA.


Interpretation:

As its name implies, MACD is all about the convergence and divergence of the two moving averages. Convergence occurs when the moving averages move towards each other. Divergence occurs when the moving averages move away from each other. The shorter moving average (12-day) is faster and responsible for most MACD movement. The longer moving average (26-day) is slower and less reactive to price changes in the underlying security.
MACD oscillates above and below the zero line, which is also known as the centerline. These crossovers signal that the 12-day EMA has crossed the 26-day EMA. The direction, of course, depends on direction of the moving average cross. Positive MACD indicates that the 12-day EMA is above the 26-day EMA. Positive values increase as the shorter EMA diverges further from the longer EMA. This means upside momentum is increasing. Negative MACD indicates that the 12-day EMA is below the 26-day EMA. Negative values increase as the shorter EMA diverges further below the longer EMA. This means downside momentum is increasing.


In the example above,

The yellow area shows MACD in negative territory as the 12-day EMA trades below the 26-day EMA. The initial cross occurred at the end of September (black arrow) and MACD moved further into negative territory as the 12-day EMA diverged further from the 26-day EMA. The orange area highlights a period of positive MACD, which is when the 12-day EMA was above the 26-day EMA. Notice that the 12-day EMA remained below 1 during this period (red dotted line). This means the distance between the 12-day EMA and 26-day EMA was less than 1 point, which is not a big difference.

Wednesday, November 16, 2011

how do we truly know if support and resistance was broken?

Support and Resistance

Support and resistance is one of the most widely used concepts in trading. Strangely enough, everyone seems to have their own idea on how you should measure support and resistance.


This zigzag pattern is making its way up (bull market). When the market moves up and then pulls back, the highest point reached before it pulled back is now resistance.

As the market continues up again, the lowest point reached before it started back is now support. In this way resistance and support are continually formed as the market oscillates over time. The reverse is true for the downtrend.

Plotting Support and Resistance

One thing to remember is that support and resistance levels are not exact numbers.

Often times you will see a support or resistance level that appears broken, but soon after find out that the market was just testing it. With candlestick charts, these "tests" of support and resistance are usually represented by the candlestick shadows.

Support holding at 4725

How the shadows of the candles tested the 4725 support level. At those times it seemed like the market was "breaking" support. In hindsight we can see that the market was merely testing that level.
 

So how do we truly know if support and resistance was broken?

There is no definite answer to this question. Some argue that a support or resistance level is broken if the market can actually close past that level. However, you will find that this is not always the case.


Example:The price actually closed past the 4725 support level.

In this case, price had closed below the 4725 support level but ended up rising back up above it.If you had believed that this was a real breakout and sold this pair, you would've been seriously hurtin'!

Looking at the chart now, you can visually see and come to the conclusion that the support was not actually broken; it is still very much intact and now even stronger.To help you filter out these false breakouts, you should think of support and resistance more of as "zones" rather than concrete numbers.

One way to help you find these zones is to plot support and resistance on a line chart rather than a candlestick chart. The reason is that line charts only show you the closing price while candlesticks add the extreme highs and lows to the picture.

Tuesday, November 15, 2011

Stocks and Bonds: What’s the Difference?

Stocks and Bonds: What’s the Difference?

Money is an essential part of life. We work and earn money for the comforts of life, educate our children and to increase our standard of living and so on. It is our human nature compels us to try to make money fast and hard. The fact that this greed, people invest their hard earned money in the stock market. Two popular financial instruments that most of us have heard about are the stocks and bonds. These two instruments are very popular among the masses. The idea behind these instruments is to provide an opportunity to invest their money in a particular company and become its investors to maximize their future profits. Both instruments are a good investment alternative for the money, but both have different roles to play in the stock market.


Bonds: 

What are the obligations? The answer to this question can be explained by the concept of loans. When you buy a bond, you are actually lending your money to the issuing party. Now this package will give you for your interest in the future. The value of bonds depends on market interest rate on this scenario. Bonds available for sale and purchase on the stock market opened. The value of money invested in bonds, which actually comes from the interest that investors earn on bonds. If you have a link that will attract interest of 4% and overall rates market interest is 3%, so you can sell the shares on the stock with a value higher than you actually bought it for.

Stocks:

What are the Stocks? Stocks are shares of companies. An investor can invest in stocks to become part owner of the company. The Stocks reflect the stability of a company and an investor in order to avoid risks, to invest in the shares of the company that is reliable and stable. The shares are available in three categories, namely small-cap stocks and mid-large cap. These categories determine their roles in society.

Investors are aware that the stock market is quite risky, but if it is your advantage, he can shower and huge profits for you. New stock markets shows that long-term investments in stocks to outperform other asset classes. But on the other hand, during the volatile stock market conditions, people go to buy bonds in companies incorporated and because the bonds can adjust risk. Financial experts suggest that the bonds for stocks are not wise. Instead, investors should be more active and they need to examine how a type of instrument relates to another in terms of profitability and risk.

Saturday, November 12, 2011

Fibonacci studies: arcs, fans, retracements, and time zones.

Overview:

Leonardo Fibonacci was a mathematician who was born in Italy around the year 1170. It is believed that Mr. Fibonacci discovered the relationship of what are now referred to as Fibonacci numbers while studying the Great Pyramid of Gizeh in Egypt.

Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers:

1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 610, etc.These numbers possess an intriguing number of interrelationships, such as the fact that any given number is approximately 1.618 times the preceding number and any given number is approximately 0.618 times the following number. The booklet Understanding Fibonacci Numbers by Edward Dobson contains a good discussion of these interrelationships.

Interpretation:

There are four popular Fibonacci studies: arcs, fans, retracements, and time zones. The interpretation of these studies involves anticipating changes in trends as prices near the lines created by the Fibonacci studies.

Arcs:

Fibonacci Arcs are displayed by first drawing a trendline between two extreme points, for example, a trough and opposing peak. Three arcs are then drawn, centered on the second extreme point, so they intersect the trendline at the Fibonacci levels of 38.2%, 50.0%, and 61.8%.The interpretation of Fibonacci Arcs involves anticipating support and resistance as prices approach the arcs. A common technique is to display both Fibonacci Arcs and Fibonacci Fan Lines and to anticipate support/resistance at the points where the Fibonacci studies cross.

Note that the points where the Arcs cross the price data will vary depending on the scaling of the chart, because the Arcs are drawn so they are circular relative to the chart paper or computer screen.The following British Pound chart illustrates how the arcs can provide support and resistance (points “A,” “B,” and “C”).

Fans:

Fibonacci Fan Lines are displayed by drawing a trendline between two extreme points, for example, a trough and opposing peak. Then an “invisible” vertical line is drawn through the second extreme point. Three trendlines are then drawn from the first extreme point so they pass through the invisible vertical line at the Fibonacci levels of 38.2%, 50.0%, and 61.8%.. (This technique is similar to Speed Resistance Lines.)
The following chart of Texaco shows how prices found support at the Fan Lines.

You can see that when prices encountered the top Fan Line (point “A”), they were unable to penetrate the line for several to the bottom Fan Line (points “B” and “C”) before finding (point “C”), they rose freely to the top line (point “D”) where rebounded.

Retracements:

Fibonacci Retracements are displayed by first drawing a trendline between two extreme points, for example, a trough intersecting the trendline at the Fibonacci levels of 0.0%, 23.6%, 38.2%, 50%, 61.8%, 100%, 161.8%, 261.8%, and 423.6%. (Some of the lines will probably not be visable because they will be off the scale.)After a significant price move (either up or down), prices will often retrace a significant portion (if not all) of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels.In the following chart of Eastman Kodak, Fibonacci Retracement lines were drawn between a major trough and peak.

You can see that support and resistance occurred near the Fibonacci levels of 23 and 38%.

Time Zones:

Fibonacci Time Zones are a series of vertical lines. They are spaced at the Fibonacci intervals of 1, 2, 3, 5, 8, 13, 21, 34,etc. The interpretation of Fibonacci Time Zones involves looking for significant changes in price near the vertical lines.In the following example, Fibonacci Time Zones were drawn on the Dow Jones Industrials beginning at the market bottom in 1970.



candlestick charting Method

The Japanese developed a method of technical analysis to analyze the price of rice contracts. This technique is called candlestick charting. Steven Nison is credited with popularizing candlestick charting and has become recognized as the leading expert on their interpretation.Candlestick charts display the open, high, low, and closing prices in a format similar to a modern-day bar-chart, but in a manner that extenuates the relationship between the opening and closing prices. Candlestick charts are simply a new way of looking at prices, they don’t involve any calculations.Each candlestick represents one period (e.g., day) of data. Figure 45 displays the elements of a candle.

Interpretation:
I have met investors who are attracted to candlestick charts by their mystique–may be they are the “long forgotten Asian secret” to investment analysis. Other investors are turned-off by this mystique–they are only charts, right? Regardless of your feelings about the heritage of candlestick charting, I strongly encourage you to explore their use. Candlestick charts dramatically illustrate changes in the underlying
supply/demand lines.

Because candlesticks display the relationship between the open, high, low, and closing prices, they cannot be displayed on securities that only have closing prices, nor were they intended to be displayed on securities that lack opening prices. If you want to display a candlestick chart on a security that does not have opening prices, I suggest that you use the previous day’s closing prices in place of opening prices. This technique can create candlestick lines and patterns that are unusual, but valid.The interpretation of candlestick charts is based primarily on patterns. The most popular patterns are explained below.

Bullish Patterns:
This is a bullish line. It occurs when prices open near the low and close significantly higher near the   period’s high.

Hammer:


This is a bullish line if it occurs after a significant downtrend. If the line occurs after a significant up-trend, it is called a Hanging Man. A Hammer is identified by a small real body (i.e., a small range between the open and closing prices) and a long lower shadow (i.e., the low is significantly lower than the open, high, and close). The body can be empty or filled-in.




Piercing line.

This is a bullish pattern and the opposite of a dark cloud cover. The first line is a long black line and the second line is a long white line. The second line opens lower than the first line’s low, but it closes more than halfway above the first line’s real body.

     Piercing LineBullish engulfing lines.

This pattern is strongly bullish if it occurs after a significant downtrend (i.e., it acts as a reversal pattern). It occurs when a small bearish (filled-in) line is engulfed by a large bullish (empty) line.

Morning star.


This is a bullish pattern signifying a potential bottom. The “star” indicates a possible reversal and the bullish (empty) line confirms this. The star can be empty or filled-in.

Bullish doji star.

A “star” indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the morning star, above) before trading a doji star. The first line can be empty or filled in.


Long black (filled-in) line.



This is a bearish line. It occurs when prices open near the high and close significantly lower near the period’s low.

Hanging Man.
These lines are bearish if they occur after a significant uptrend. If this pattern occurs after a significant downtrend, it is called a Hammer. They are identified by small real bodies (i.e., a small range between the open and closing prices) and a long lower shadow (i.e., the low was significantly lower than the open, high, and close). The bodies can be empty or filled-in.


Dark cloud cover:
This is a bearish pattern. The pattern is more significant if the second line’s body is below the center of the previous line’s body (as illustrated).

Bearish engulfing lines.



    This pattern is strongly bearish if it occurs after a significant up-trend (i.e., it acts as a reversal pattern). It occurs when a small bullish (empty) line is engulfed by a large bearish (filled-in) line.





Evening star.




This is a bearish pattern signifying a potential top. The “star” indicates a possible reversal and the bearish (filled-in) line confirms this. The star can be empty or filled-in.




 Doji star.


 A star indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the evening star illustration) before trading a doji star.
Shooting star.



This pattern suggests a minor reversal when it appears after a rally.The star’s body must appear near the low price and the line should have a long upper shadow.


Saturday, November 5, 2011

600 Year Gold Chart

600 Year Gold Chart



600 Year gold chart



Monday, October 24, 2011

Definition and Formula For BULL/BEAR RATIO

Interpretation


The Bull/Bear Ratio is a market sentiment indicator. Dr. Martin Zweig sums up sentiment indicators in his book Winning On Wall Street by saying, “Beware of the crowd when the crowd is too one-sided.” Extreme optimism on the part of the public and even professionals almost always coincides with market tops.Extreme pessimism almost always coincides with market bottoms.



Calculation:

The Bull/Bear Ratio is calculated by dividing the number of bullish advisors by the number of bullish plus bearish advisors. The number of neutral advisors is ignored.





High readings of the Bull/Bear Ratio are bearish (there are too many bulls) and low readings are bullish (there are not enough bulls). In almost every case, extremely high or low readings have coincided with market tops or bottoms. Historically, readings above 60% have indicated extreme optimism (which is bearish for the market) and readings below 40% have indicated extreme pessimism (which is bullish for the market).

Example:

The following chart shows the Bull/Bear Ratio and the S&P 500.


“Buy” arrows were drawn on the S&P 500 when the advisors were extremely bearish and “sell” arrows were drawn when advisors were extremely bullish.





Monday, October 17, 2011

Technical Analysis for .. ..Why?

How to investment in the stock market benefited from the technical Analysis.

What is Technical Analysis?

Technical Analysis is the study of supply and demand in the stock market, by comparing the history of stock price movements and volume (the number of shares traded).  Understanding the way the price moves in relation to the Open, High, Low and Closing Prices on a given minute, hour, day, week or month and comparing that to the volume can give an insight into future market direction.  The data required is usually displayed in a Stock Chart so it is easily consumed.


The science / art of technical analysis usually falls into different areas of study:

   1. Supply & Demand – Stock Price Movement vs Volume
   2. Trend Following – understanding what trends are
   3. Waves & Cycle Analysis – understanding how markets move
   4.Stock Charts – Price – plotting price in charts to understand the history of the Stock,
   5.Share or Market   Index using Bars, Candlesticks or Point and Figure Charting.
   6.Trend Interpretation – Drawing Trend Lines – Support and Resistance Lines

   7. Price Indicators – the study of price based chart indicators or Oscillators know as Stochastics,”Relative Strength Index” (RSI), “Rate of Change” (ROC), “Moving Averages” (MA), “Moving Average Convergence Divergence” (MACD), Parabolic SAR, ADX Average Direction Movement Index.

    8.Study of Volume – understanding how the level of volume has a relationship with price – and how price has a relationship with volume.

    9.Study of Price Volume Indicators – “On Balance Volume” (OBV), Chaikins Money Flow,
“Time Segmented Volume” (TSV), MoneyStream.

    10.Market Sentiment – understanding the madness of crowds

Saturday, October 15, 2011

ELLIOTT WAVE _ Triangles

Triangles appear to reflect a balance of forces, causing a sideways movement that is usually associated with decreasing volume and volatility. Triangles contain five overlapping waves that subdivide 3-3-3-3-3 and are labeled a-b-c-d-e. A triangle is delineated by connecting the termination points of waves a and c, and b and d. Wave e can undershoot or overshoot the a-c line, and in fact, our experience tells us that it happens more often than not.

There are two varieties of triangles: contracting and expanding. Within the contracting variety, there are three types: symmetrical, ascending, and descending, as illustrated in Figure . There are no variations on the rarer expanding triangle. It always appears as depicted in Figure, which is why Elliott termed it a “reverse symmetrical” triangle.
Figure  depicts contracting triangles as taking place within the area of preceding price action, in what may be termed regular triangles. However, it is extremely common for wave b of a contracting triangle to exceed the start of wave a in what may be termed a running  triangle, as shown in Figure 1. Despite their sideways appearance, all triangles, including running triangles, effect a net retracement of the preceding wave at wave’s end.

Triangle
Examples Thereare several real life examples of triangles in the charts in this course. As you will notice, most of the subwaves in a triangle are zigzags, but sometimes one of the subwaves (usually wave c) is more complex than the others and can take the shape of a regular or expanded flat or multiple zigzag. In rare cases, one of the sub-waves (usually wave e) is itself a triangle, so that the entire pattern protracts into nine waves. Thus, triangles, like zigzags, occasionally display a development that is analogous to an extension. One example occurred in silver from 1973 through 1977.
Although upon extremely rare occasions a second wave in an impulse appears to take the form of a triangle, triangles nearly always occur in positions prior to the final actionary wave in the pattern of one larger degree, i.e., as wave four in an impulse, wave B in an A-B-C, or the final wave X in a double or triple zig-zag or combination.A triangle may also occur as the final actionary pattern in a corrective combination, although even then it always precedes the final actionary wave in the pattern of one larger degree than the corrective combination.
In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle. Elliott used the word “thrust” in referring to this swift, short motive wave following a triangle. The thrust is usually an impulse but can be an ending diagonal. In powerful markets, there is no thrust, but instead a prolonged fifth wave. So if a fifth wave following a triangle pushes past a normal thrust measurement,it is signaling a likely protracted wave. Post-triangle advancing impulses in commodities at degrees above Intermediate are usually the longest wave in the sequence,
On the basis of our experience with triangles, as the example in Figure illustrates, we propose that often the time at which the boundary lines of a contracting triangle reach an apex coincides exactly with a turning point in the market. Perhaps the frequency of this occurrence would justify its inclusion among the guidelines associated with the Wave Principle.
The term “horizontal” as applied to triangles refers to these corrective triangles in general, as opposed to the term “diagonal”. Thus, the terms “horizontal triangle” and “diagonal triangle” denote these specific forms under the Wave Principle. The simpler terms “triangle” and “wedge” may be substituted, but keep in mind that technical chart readers have long used these terms to communicate less specifically subdivided forms defined only by overall shape. Having separate terms can be useful.
Corrective Combinations
Double and Triple Threes


Fig 1
Elliott called sideways combinations of corrective patterns “double threes” and “triple threes.” While a single three is any zigzag or flat, a triangle is an allowable final component of such combinations and in this context is called a “three.” A double or triple three, then, is a combination of simpler types of corrections, including the various types of zigzags, flats and triangles. Their occurrence appears to be the flat correction’s way of extending sideways action. As with double and triple zigzags, each simple corrective pattern is labeled W, Y and Z. The reactionary waves, labeled X, can take the shape of any corrective pattern but are most commonly zigzags.
Combination of threes were labeled differently by Elliott at different times, although the illustrative pattern always took the shape of two or three juxtaposed flats, as shown in Figures. However, the component patternsalways took the shape of two or three juxtaposed flats, as shown in Figures 1-45 and 1-46. However, the component patterns more commonly alternate in form. For example, a flat followed by a triangle is a more typical type of double three, as illustrated in Figure 1.
A flat followed by a zigzag is another example, as shown in Figure 1-48. Naturally, since the figures in this section depict corrections in bull markets, they need only be inverted to observe them as upward corrections in bear markets.
For the most part, double threes and triple threes are horizontal in character. Elliott indicated that the entire formations could slant against the larger trend, although we have never found this to be the case. One reason is that there never appears to be more than one zigzag in a combination. Neither is there more than one triangle. Recall that triangles occurring alone precede the final movement of a larger trend. Combinations appear to recognize this character and sport triangles only as the final wave in a double or triple three.

Monday, October 3, 2011

What to understand in Online Stock Market Investing!

Online investing on the stock market is one of the main ways to do a lot of money easily. But you need to know the basics of trading before jumping into the business world. Therefore, it is best to get educated about the stock market with low-cost courses before you get the business. As the stock market online is one of the easiest and most fun ways to earn money sitting at home, it was always conscious in front of manure. Stock market is very vulnerable market, and even if one day you can see a lot of wins, the next day you can see a small loss. So you have to be mentally ready for this business.

Basic Concept:

The basic concept behind the trade market share is as follows. You buy shares of a company. In that, you become a shareholder. The company uses the money to develop your business and then gives a portion of their profits. The other most common way to make money stock traders is when the fate of a company is growing. The continuous increase in the profits of an enterprise leads to an increase in its share price. That is when investors sell shares of stocks for a greater amount of money invested. Losses occur when the stock price goes down after an investor has bought.Investments in the stock market have become easier now because of stockbrokers online. Now you can trade stocks just sitting at home. All you have to do is find an online brokerage firms and create an account. You can set your financial goals and to buy and sell shares through an account. However, it is better to go with a company that has a good reputation in this field. Benefits The first major advantage of online stock trading is that you can see your account is 24 / 7 All the data warehouse will be on hand, and could also be made aware of information about the company, who have invested or plan to invest. Since that exchange reduces the fixed costs, it is also to reduce intermediation costs, varies mainly $ 7 and $ 10 for each trade.All you have to be a little sophisticated Internet and knowledge of trading strategies. However, if you need advice on your business, these online brokerage firms also make arrangements with financial advisors and other runners. You have more freedom over how you manage your inventory.

Take a look at these quick questions:

    Are you curious about buying stocks?
    Beginning to learn how to trade stocks online?
    Do you already have some experience?

If any of these sound like you, you're in the right place. Go ahead and take a look around. Don't have a lot of knowledge about stock trading yet? Don't worry. Take your time and browse through the different topics throughout this web site at your own pace. There's a lot of information here and there's no reason to rush.
Online Stock Trading Guide

To review, the main purpose of this web site is to provide quality educational information, tips and resources as a form of stock trading guide to help you form a good background in stock trading and at the same time make improvements over the long run.

You'll be able to find everything from stock market basics and money management to choosing an online broker, using stock charts, learning about different trading strategies and many other related topics.

The information you'll find will be provided and directed towards helping beginning through intermediate level investors and traders.

As you are reading and learning on this web site, please keep in mind that there is no "Holy Grail" method to be successful at stock trading. The goal is that you'll be able to use the information provided on this web site, combined with other investing knowledge that you gain to greatly improve your understanding of the stock market and be able to develop your own trading plan that produces consistent results.

With a good trading plan in place, you'll already be ahead of most beginning and even some experienced traders and investors. That's because most traders don't develop any type of trading plan and wind up losing their initial capital. They don't take the time to learn with some type of stock trading guide before they start.

Saturday, October 1, 2011

Importance of Stock Market quotes_How to investors to trade stocks

Stock prices are important for investors to know how a stock is bought or sold on the market. Without this information it would be almost impossible for investors to trade stocks bought and sold. Being able to see the offer of a selection of price / demand is what makes possible the investment in shares. If you need to call your agent by phone to ask, would a long time and may lose many opportunities to enter or exit at the right time. There would also be the possibility that the corridor is flooded with calls and can not respond to everyone. This could mean that you will not have access to trading in the market.


The exchanges around the world provide important stock market for investors in the stock market today. Information on stock prices is transmitted to the electronic communications network that allows investors to see the share price. ECN can provide some quotes from different systems and therefore more likely to sell or buy with other market participants. Technical analysis of stocks would be very difficult because he watched the movements of price and volume. Without stock charts detail the story of a company share prices, technical analysis would be less effective in predicting future movements.

When investors have a selection of equity, must know what the price is so that they can act effectively. Trading styles, such as scalping, swing trading or shaving should not be necessary, because they all require information on purchasing / work effectively. Stock market quotations are not always what we see today. Previously, investors were not able to say how the market moved on a daily basis. We cannot not tell if it was a bullish trend, down trend or a sideways trend but then they are usually invested in bonds as a way to make money because the stock market was not considered much appreciated. Over time, various indices started to add information such as the volume of trade and prices.

Professional traders who trade stocks, or work for a living have access to financial institutions dealing desk. This ensures that as soon gives way will be implemented immediately. Most retailers are normal accounts, which are directly linked to the ECNs, which are delayed stock quotes. Quotes may be delayed up to 15 minutes, in some cases, depending on your system, or ECN. Therefore, it is important to ask the broker to use ECN to ensure timely information.

Friday, September 30, 2011

How to Start Investing In Stocks!_PRICE FIELDS_BULL And BEAR

 Start Investing In Stocks!

Do you want to be an investor in stocks? Stocks are a lucrative way of making money and every investor who has been there and done that knows it very well. One of the smarter ways to make money is to trade stocks or simply buy them. Yet before getting there, you first need to learn the ropes and prepare yourself to be a smart investor and this is can be easily achieved by taking the correct courses. First of all, you would need to understand the changes in stock before investing in them and it is a well known fact that the stock market amends itself on a frequent basis, there could be a good day for a particular stock and the next day could be miserable. Hence one needs to find the right stocks and this can be quite a discouraging chore especially if you are inexperienced.

A number of ideas and concepts on how to treat the stock market are widely available. A few people have more customary methods of investments, like investments in long-term stock. This could be waiting for investment to mature for the next five years in some cases yet there is another rule for stocks: No smart investor invests in a traditional way!

Firstly, if you are interested in trading the stock market is finding yourself an adviser. If not, then you will have to get the professional help of someone who knows the market very well. However, there is no experience better than practical experience and the same goes for learning the intricacies of stocks, it is better to find someone who is already occupied in trading the stock market and get the right counsel from them. While investing you need to find out the type of investments which make the right sense. Not all investments that you find will be positive and not all that you have let go will be negatives. Here discretion is better than valor and you need to make things work in your favor. As a smart investor you will have to sum up all the risks before you start investing and find out how much you will actually gain or lose from an investment.

Apparently, if the risks are more and the benefits are less then it is definitely not a good investment for you and when you find it to be vice-versa don’t think twice and take the plunge as you might not get another shot at the same stock again in the near future. While trading in stocks there is a thumb rule to follow, and that is trading stocks in five year intervals. Thus, while investing you need to always keep watch on what you stand to benefit from the stocks in the next five years to come.


Technical analysis is based almost entirely on the analysis of price and volume. The fields which define a security’s price and volume are explained below.
Open
This is the price of the first trade for the period (e.g., the first trade of the day). When analyzing daily data, the Open is especially important as it is the consensus price after all interested parties were able to “sleep on it.”
High
This is the highest price that the security traded during the period. It is the point at which there were more sellers than buyers (i.e., there are always sellers willing to sell at higher prices, but the High represents the highest price buyers were
willing to pay).
Low
This is the lowest price that the security traded during the period. It is the point at which there were more buyers than sellers (i.e., there are always buyers willing to buy at lower prices, but the Low represents the lowest price sellers were
willing to accept).
Close
This is the last price that the security traded during the period. Due to its availability, the Close is the most often used price for analysis. The relationship between the Open (the first price) and the Close (the last price) are considered significant by most technicians.This relationship is emphasized in candlestick charts.
Volume
This is the number of shares (or contracts) that were traded during the period. The relationship between prices and volume (e.g., increasing prices accompanied with increasing volume) is important.
Open Interst
This is the total number of outstanding contracts (i.e., those that have not been exercised, closed, or expired) of a future or option. Open interest is often used as an indicator.
Bid
This is the price a market maker is willing to pay for a security (i.e., the price you will receive if you sell).
Ask
This is the price a market maker is willing to accept (i.e., the price you will pay to buy the security).
These simple fields are used to create literally hundreds of technical tools that study price relationships, trends, patterns,
etc.
Not all of these price fields are available for all security types, and many quote providers publish only a subset of these. Table 1 shows the typical fields that are reported for several security types.

Bulls And Bears!

 who has been or seen the game at a Stock Market or even tried their hand at the Forex can definitely guess where this is headed to. Being in Stock market is same when you find yourself in Forex; it is just that you are the Bull and the Bear. You have a proposition as to choose when you need to be what. However, one can be in a mess if you have no clue where you are headed to. This is where you get clear and what you need to catch up and when. It goes without saying that Being Bull refers to the selling and the opposite for being the Bear. But then you will understand on the onset of your journey to making money that Forex; like any trading has its rules. Practice makes perfect. This is one line that has no meaning in reality in the case of a market. There is no ideal in the first place since there is absolutely no Genius out there where this game is headed to. There might be days when you really felt you had a landslide and there are those when you shuttled yourself over to moon .Nevertheless, once you develop your own style at going around, I strong believe you will stick on. Any financial planner or consultant or even a Stock broker is just your gate pass into the World of Bears and Bulls. And all of them will agree that there isn’t rules; all that’s exists are guidelines and regulatory Functions. First and foremost is to have a trading plan to succeed. A good plan will remove all your emotions form your trade. “Unpredictable” is the word of the market and you will need to prepare yourself to live it day in and day out. Do not buck the trend. When the market is bullish, go long. When the market is bearish, you short. Never go against the trend. If you stick my some “gut feeling “, you may find yourself lucky or even have your guts spilled out. The reason for the last statement is primarily the word “Doubt “. When in doubt or not sure about where the hell you or the market is headed to, stay sidelines. Sometimes doing nothing is the best thing to do. One of my friends suggests that keeping a trading journal is one of the best things to do. How will you arrive at your style when you don’t keep a track of how and what are you doing?  Always wake up and realize that the undeniable fact is that you need to preserve your capital. If you don’t do this, you will be history in no time. Simply put being emotionless, trendy and informed can take you places. Improve on your mistakes, keep learning and keep improving. Take the profit when the trade is good and know when to cut loss. Know why are you trading and do not do it for the sake of it .So what are you waiting for go try on a free account now and let the games begin.