Dragonfly & Gravestone Doji Candlestick Patterns- A Rare But Highly Profitable Patterns!
Mar 10, 2010 Uncategorized
Candlestick Charting is one of the most powerful tools in the trading arsenal of any trader. Candlestick Charts apply to any market no matter what you trade-stocks, forex, futures, options, ETFs, commodities, bonds and others. With one simple glance on the chart, you can figure out the sentiment of the buyers and sellers in the market. There are many candlestick patterns that are used as trading signals. Some are simple while others are complex. Doji Candlestick Pattern is a simple pattern that is very easy to spot. It has no body. It is formed when the opening and the closing prices are the same. So, this pattern is all wicks with no stick. It literally looks like a Cross on the chart. So you can easily spot it. But it is very rare as the security opening and closing prices are seldom equal! Doji has some variations. We will discuss these variations in this article!
In other words, the opening and the closing prices should be the same for a Doji to be formed. So for a Doji to be truly formed on a trading day, throughtout the trading day heavy buying or selling may take place but at the end of the day, the price should be where it had been at the start. In other words, the opening and the closing prices should be the same for a Doji to be formed.
It is a signal that the battle between the bulls and the bears had been a draw during the trading day when a Doji is formed with the opening and the closing prices equal. Soon, either the bulls or the bears are going to previal. In other words, a trend reversal is about to take place.
A Dragonfly Doji pattern is unique in the sense that the opening, closing and the high prices are all the same or equal. A Dragonfly Doji is formed when the stocks opens, trades down during first part of the day. During some part of the day, the price starts to climb again and eventually closing on the high which is the same as the open.
When a Dragonfly Doji is formed, bears initially decide to rule the market. But at some point the bulls step in and decide to buy again. When the bulls step in, they start pushing the price up. As the bulls dominate the trading day, the security price ends up right where it had started.
The low on this pattern can be taken as the support level because this was the level at which the bears entered the market and started buying. Dragonfly Doji is considered to be a bullish candlestick pattern.
A bearish Gravestone Doji Pattern is formed when the open and close of the day is equal to the low of the day. This is the most bearish of the Doji patterns. A bearish Gravestone Doji pattern signals the start of a prolonged downtrend in the security price.
As said before, this pattern is rare but very easy to spot on the chart. When it does form, get ready for a trend change!
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ETF Options Investing Secrets
Mar 1, 2010 wealth building
You must have traded ETFs. No, then let me first introduce you to ETFs. ETF is the short acronym for Exchange Traded Funds. ETF are a basket of stocks or other assets that have been designed to closely track a stock index, a market index, sector index or any other index. Now trading stock indexes is what many trader do. You can trade stock indexes with options. However, trading ETF Options can be a more profitable venture for you!
Now trading ETF Options is somewhat different than trading Index Options. Though both track almost similar indexes but Index Options are settled in cash at expiry. On the other hand, ETF Options are settled with the underlying instruments that is shares of ETFs. This gives you the chance to use various combination strategies with ETF Options that you cannot normally use with Index Options.
Index and ETFs both get affected by the dividends paid by the underlying stocks. So if you use options on them, these dividends on the underlying stocks should be incorporated into the puts and calls by using an options calculator.
Now, ETF Options are more flexible than the Index Options as you can use the underlying ETF as well in your options strategies. If you have already traded stock options, ETF options should not be difficult for you. You can hedge your ETF position with an option on the ETF.
Using Protective Put Strategy by combining long ETF with a long put can hedge against the downside risk limiting it to the put strike price with a slightly increased cost for the ETF.
In the same way, you can use the covered call on an ETF with a long ETF and a short call. The short call reduces the cost of the position and slightly reduces the risk as well. However, a covered call limits the upside profit potential to the call strike price.
How about a Collared Position. This is another combination strategy that you can use with an ETF is forming a Collared Position. A Collared Position is formed with a long ETF and a long put combined with a short call. The premium paid in taking a long put position is offset somewhat by the premium that you get by writing a call. A Collared Position limits the limited but high risk to a limited risk only. The downside risk is now only limited to the put strike price.
Options trading is risky in the sense that it has both time volatility as well as price volatility. Now, many traders trade options without getting good options trading education. What you need to do is first paper trade these strategies and master them. This way you will learn how to deal with unexpected risk.
An important fact that you need to know is that not all ETFs have options written on them. This should not surprise you as there are many stocks that don’t have options written on them. Another important fact that you should know is that ETF Options are always American Style. American Style options can be excercised anytime before expiry. You can even trade LEAP Options on ETFs. LEAP Options are long term options having expiry of more than nine months to less than two and a half years.
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How To Back Test Your Trading System? Know These Shocking Limitations!
Feb 27, 2010 wealth building
Your trading system needs thorough testing before you decide to trade live with it. A trading system might comprise of a set of indicators. You need to know how well your trading system and its set of indicators work in a particular market.
How to do backtesting? Backtesting uses historical data to test the performance of the trading system under the past market conditions. Using a backtesting software makes it very simple and easy.
There are many problems with historical data. There is no slippage in backtesting. Slippage is one of the most important problem that a trader faces while trading live. The other problem that the backtest ignores is the widening of spreads under volatile market conditions. So backtesting results are no guarantee that the trading system will perform well under live market conditions. Things that worked in the past might not work now. Similarly something that didn’t work in the past, may work now! You never know!
In other words, no two trades work out in exact the same way twice. SO you have to be careful when looking at the back testing results and take it with a pinch of salt. However, there are still some advantages of back testing a trading system.
Back testing can give you a feel how a particular market behaves under certain conditions. Back testing can also spot you certain general characteristics of the market like the seasonal trends and market tendencies.
For example, some markets especially the commodities market is highly seasonal and cyclical in nature. Now in other markets, you might not find any seasonal trends. For example, there is very little seasonality in curreny market or the bond market. In case of the stock market, there is much talk of the January Effect. Well, it is there no doubt about it. Some years, it is highly pronounced and others it is not that pronounced. Similarly stock prices tend to rise at the end of each month and the first few days of the new months. The reason for this is that many institutional investors tend to put the new funds to work at the end of the month and the beginning of the new month!
Back testing can also help you establish the amount of time a particular market tends to run in a certain direction. For example, in case of US Dollar Index, its trend lines tend to last for months to years.
There is no substitute for live trading results! To tell you the truth, backtesting can only give you a rough guess about the performance of the trading system under live trading conditions.
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Tags: credit, currency trading, Day Trading, debt, Forex, futures, home business, money, mutual funds, options, real estate, retirement, Stock Market, Stocks, trading, wealth building
How Momentum Investing Can Make You Rich?
Feb 27, 2010 wealth building
There is a difference between trading and investing. Trading is always short term while investing is long term. The time horizon in trading can be as short as a few minutes to a few days to a few weeks. Whereas in investing, the time horizon can be months to years. Many people day trade or swing trade stocks, currencies, futures, options, ETFs, commodities or other markets. In day trading, a trader opens a position and closes it in the same day making a quick profit. In swing trading, a trader tries to ride a trend in the market as long as it lasts. On the other hand, an investor is least pushed about the short term swings in the market. He or she has a long term time horizon like a few months to even a few years. This long time horizon matches their investment and financial goals!
Investors in theory can wait for a long time to see their stock pick to play out. A company’s stock may be ridiculously cheap. But it may stay like that for a long time before it catches everyone else’s attention and the price is bid up. It might be good for investors to learn a few tricks from traders especially day trading that can help them make a few quick bucks.
There is a general problem with so many investors. They fall in love with their investment after doing so much research and committing so much time for the position to work. Now, day traders are always hit and run types. They have developed an innate sense of discipline among themselves that teaches them when to commit money to a trade and when to cut and run. So, many investors when they fall in love with their investments on the long run forget this cardinal rule of trading that you have to cut your losses. Market least care who you are and how long you have been in it.
When, there is momentum behind a security, it means that it’s price will continue to icnrease as long as it has got momentum. This way by investing in stocks having momentum behind them, you avoid the risk of getting stuck in stocks that might not move for months and months.
When a security goes up in price with a strong demand underneath it, it said to have price momentum behind it! Now, as a long term investor, you should look for securities having momentum behind them just to avoid getting stuck with securities for months before they start moving. It pays to be patient. But it works even better when the money that you invested works for you while you wait.
How to you find that a security has got momentum behind it? You can use these technical indicators like the MACD ( Moving Average Convergence and Divergence), RSI (Relative Strength Index) or the Stochastic. A swing trader is also looking to ride a trend as long as it lasts. A trend lasts as long as it has got momentum behind it. Momentum investing is similar to swing trading.
Momentum investing can also lead to bubbles like that happened in the dot com bubble in the last few years of 1990s. It is always a good idea to do some fundamental research on the companies before doing momentum investing.
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Tags: bonds, credit, currency trading, Day Trading, Etfs, Forex, futures, home business, money, mutual funds, options, real estate, retirement, Stock Market, Stocks, trading, wealth building
Get Cash With Online Surveys – Finding the Best Paying Survey Sites
Feb 9, 2010 wealth building
If you have no clue how to make more online survey cash, you’re in the same boat as many of us. I am not telling you this to make you give up on surveys, though. It’s the exact opposite of that. I’m telling you this fact because you can use 2 of the simplest tricks imaginable to get the ball rolling and start earning a lot more online survey cash than you’ve received in the past.
To make this as easy on you as possible, and it’s dead easy to begin with, both of these tips are about picking the very best websites for doing surveys. Just to let you know, each of the tips below centers around things you can spot on the very front page of any website offering surveys for money, so you won’t have to sign up to any of them. It will show you right off the bat if the site is going to have huge payments, or little ones that you shouldn’t bother with. With that said, we will now get into the first thing to look for when you want to spot the best place to earn online survey cash.
Contact Info – You’re probably saying to yourself, “What does this have to do with earning online survey cash?” Well, it has a lot to do with what I’m talking about, because it’s my secret weapon when weeding out the tiny paying websites. What you do is this: Keep looking for paid surveys the ways you always do, but once you get to the front page of one of them, read the tops and bottoms of their main page. What are you seeing? Did you spot any real ways to get in touch with the owners, such as an email address, phone number, or an actual physical address?
If you were lucky enough to spot some legit ways to talk to the people who run that site, there’s a very strong chance that you found a winner. If you were not able to spot anything, I would walk away, because your chance of making good online survey cash with them is pretty nonexistent. I have used this trick time and time again, and it works for me well over 90% of the times I use it. The places that leave their contact info off of their main page are doing it knowingly, too. They absolutely know that they have minuscule payments, and they don’t really feel like having all sorts of people email them and call them about that exact subject. Hence the reason they delete all ways to get in touch with them.
Read the Juicy Text – This is also done on the main page of any website with surveys. All of these types of sites will have really juicy text to draw you in. Many of them go way overboard and promise you the world. They spew out numbers like $3000 per month, or some crazy amount. The websites that exaggerate like that are always the lowest paying ones, which is very ironic. The places that feel a need throw out really high numbers that sound too good to be true are always the places hiding the fact that they have tiny payments. You’ll make online survey cash with them, but not much. The places that are truthful and straight to the point are the ones worth their weight in gold. They should tell you real numbers, such as $400 to $500 a month. That’s what you can expect when trying to make online survey cash.
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Succeed As An EBay Affiliate
Feb 1, 2010 wealth building
EBay was created in September 1995 by a man called Pierre Omidyar. This online marketplace was one of the first websites of its kind in the world. The site was originally named AuctionWeb. The name ‘eBay’ came from the domain Omidyar used for his site. His company’s name was Echo Bay. The first thing ever sold on eBay was Omidyar’s broken laser pointer for $14.
It didn’t take EBay long to became massively popular. Sellers began listing all sorts of odd things and buyers actually bought them. The site could almost be left alone to run itself. EBay had been designed from the start to collect a small fee on each sale. When the fees became more than Omidyar’s current salary, he decided to quit his job and work on the site full-time. In 1996, to make buying and selling safer, he added feedback facilities to let buyers and sellers rate each other.
In 1997, Omidyar changed AuctionWeb’s name to eBay. He spent a lot of money on advertising and had the eBay logo designed. It was in this year that the one-millionth item was sold.
People started selling more than just collectibles and in 1998 eBay became big business. Quickly becoming a massive site where you could sell anything, large or small.
EBay went worldwide in 1999. In the UK, Australia and Germany sites were launched. EBay bought half.com, an Amazon-like online retailer, in the year 2000. The same year it introduced Buy it Now. It bought PayPal in 2002.
Pierre Omidyar has earned an estimated $3 billion from eBay and still serves as Chairman of the Board. All over the world, millions of items are bought and sold every day on eBay. It is estimated that $14 is spent on eBay for every $100 spent online worldwide.
Perhaps you’d like to know how eBay could work for you. People are making great money from eBay. People making thousands of dollars per month is not unusual. You can use eBay to make a significant second income even if you don’t want to quit your job and really go for it.
It doesn’t matter who you are, your age, where you live, or what you look like. EBay tears down the barriers to earning that the real world constantly puts up. You don’t need a job interview and you can forget the commute. If you can post things, you can do it. There is always someone who wants what you’re selling. Since they have come looking for you, you don’t even need to do anything to get them to buy it.
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Developing Your Own FOREX Trading Systems – Utilize Demo Accounts
Jan 6, 2010 wealth building
There are many ways in which you can create your FOREX trading systems. By using n effective FOREX trading system you can become a successful trader. It is important to know how to react to all situations and you can learn from those that have experience. Good FOREX trading systems will minimize and lose you may experience as bad situations will occur.
It is important to have a game place for what to do if the market should crash or something unexpected should happen to your FOREX trades. By being prepared you will create a winning strategy and find that you have much more success than loses in your trading.
Many FOREX traders have created systems based off of historical FOREX history that they have accessed through the Internet. Internet research itself is a great tool as you can find ratings and reviews on many different areas of FOREX trading. There are plenty of FOREX forums and blogs that provide unbiased information. You can also access free resources that provide well known and good trading strategies.
If you are looking for advice from an outside source then make sure that it is completely unbiased. This can help you exclude the bad advice that you may find. The situations individuals have been in will color their advice so make sure you get background information about those providing the advice.
You should try out your FOREX system before implementing it on the FOREX market. This way you can determine if any part of your system needs to be reworked or changed. It is possible to test it out using a demo account or creating your own real time trading experiment. These are excellent ways to try out a system without losing any money.
Possible the best tool when using a FOREX trading system is planning and while you can expect some loses with good planning you can make sure you mostly make money on your trades. You need to plan ahead and make sure you are following the current trend.
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Tags: business, currency trading, finance, forex trading, home based business, home business, online business, wealth building
Find Out One Of The Best Ways To Make An Income-From The Mind Of Robert Nichols
Jan 3, 2010 wealth building
In several instances, people keep faraway from investments as a result of of the misperception that you simply either should possess masses of cash to start investing or you’ve got to possess masses of data to navigate the globe of investments. Fortunately, this can be not the case as you can actually make money one small investment at a time.
Take note, but, that dabbling in investment is unlike winning the state lottery’s million-greenback jackpots. You have got to exert effort and time, not to say money, to make a lot of money on your investments regardless if it is on penny stocks or on blue-chip stocks. Here then are the best ways in which the way to succeed.
Your initial worry of dabbling in investments contains a little basis to it. With the many technical terms, theories and practices to remember concerning the various varieties of investments, you will definitely feel at a loss unless and till you hit the books and ask the experts. Bear in mind, but, that even when you feel that you’ve got learned all that you’ll be able to, there are still things that you need to learn. As such, you want to regularly educate yourself on the most recent news and events, the newest investment tools and the latest market trends as it applies to your investments. Of these can become your instruments in earning more cash from your relatively small investments.
Don’t fall into the lure of thinking that you want to begin huge to earn big. Even Warren Buffett had to begin at some point and so should you. It might be tiny certificates of deposits for starters, simply so long as it will earn the best interest. The interests earned will then be invested in more certificates of deposits or maybe certificates of stocks. With each earning, you’ll be able to roll it to other investments or use it to grow one particular investment.
As can be implied, the important issue is that you simply keep within the investments market. Yes, you’ll undergo “down periods” that may make the “up periods” appear in vain however that’s just how the market works. However, if you stay in the market, you may be ready to form a good amount of money than if you had given up the market for good.
Keep in mind the adage regarding not putting all your eggs in one basket? This is often valid to investments, too. Regardless of how tiny your investment capital is, it pays to diversify them into many sorts rather than risking everything in one kind. And, remember that with high-rewards investments, the risks are equally high. You can either win or lose in these investments. It should be alright if you win however what if you lose? However, you want to not diversify so widely that you can not keep track of your investments either. You must stay on high of your investments, which is doable when you know what’s happening with each one. In alternative words, do not spread yourself and your investments too thin.
Find out the best method of making money on the Internet from the best and well known online expert Robert Nichols.
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Automated Forex Trading Proven Methods
Dec 27, 2009 wealth building
If you are interested in learning how to conduct your own Forex trade then here is a short guide to get you get started. Automated Forex Trading is easy, some of the concepts to understand are the lot size, margins, currency pairs, leverage and pips.
You can always try a demo account or a trial, but the best is risk free. You will learn first that the starting capital is equal to the investment you plan to use in your on line account. Inside the manuals you find trade secrets valuable to success.
You need to learn the Metatrader and know to open charts and change the time frame. You are best getting to now the platform before you beginning with your Forex Robot. You will have a complete manual that is step-by-step guide for setting up and installation.
Keep in mind your Forex Robot can make consistent profits for you. All you have to do is start learning the process of the system you choose. Do you think that trading forex takes a mathematical mind? This is far from the truth. Learn your robots strategy trading on line, watch it perform the trades to understand the frequency of its performance and trades.
There is a trading robot for you, a automated system that will guide you to success. You just have to do your research. There are more than enough scams on line, you can check into it if you are worried. You should be able to make an intelligent decision on the basis of good advice.
Please perform the with low investments over a few days to get to know your software trading strategy before you invest large amounts of money. It is of paramount importance to understand the workings of the pips, margins, currency pairs, leverages and lot sizes before trading. Now all you need is an automated Forex trading system that works successfully.
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Tags: automated forex trading, business, currency trading, finance, forex trading, home based business, home business, online business, wealth building
Successful Methods Get Results For Online Forex Trading
Dec 24, 2009 wealth building
Online Forex trading allows the trader to have access to the international market. As the market is, open all day and seven days a week, online Forex trading is possible all the time only you trade in different time zones. Online trading allows you to trade the currencies from all over the world instead of local stocks from the local markets.
Trading allows for making huge amounts of profits from small amounts of invested capital. The leverage option allows you to trade more than you actually have and there is also no regulation to limit the amount you place in the market. Leverage allows you to play in thousands when you have invested only a few hundred in the market.
Under the proper guidance from a good broker with a system, your portfolio can quadruple in a short time. Even so online Forex trading is more complex that buying the currency low and selling it high, there are other parameters. It works in your favor to ask for guidance from a registered broker to understand these parameters.
Get the feel of the Forex market before you invest each and every cent you have earned into it. Before making bog investments learn by playing smaller investments, learn well before the big game. You will control 25, 000 units of currency at an investment of $250 with a leverage of 100:1 after registering with your broker.
Understand currency fluctuations are traded in pairs; learn of one pair and stick to the trade as you understand their personality. At a given time, invest only 20% of your money to cover you on the down side; so if you have $500 then invests $100 only. There are extraneous factors, which affect the market. Experience is part of the success process but this is easy with a proven system to guide you.
Its best to be alert and study the market trends and subtleties of the market before you put huge amounts online. Financial giants and corporations play a big role in the market and the other players like you too. It would serve us well to keep track of the huge financial giants because they control the market.
If you understand the workings of the Forex trading online you will be a part of a very lucrative industry. Get your feet wet with the demo accounts for Forex trading some use a fake money known best as virtual money and comparable to playing a game like monopoly until you are ready to swim. Deal cautiously with your money and invest only 20% of your investment in trading.
You can lose more than your capital unlike the stock market where you lose only your investment. It would serve you well to take guidance from a well-trained money manager about the reasons and factors, which cause these wings and losses. Beware of scammers, look and work only with the brokers who are well known in the market and have made profits. There are honest people you can trust with teaching Online Forex trading.
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Tags: business, currency trading, finance, forex trading, home based business, home business, online business, wealth building