Make Money Stock Trading
 
If you are a beginner to stock trading then you may be wondering just what you need to do to make money on the stock market. The principles of trading stocks are very simple, you buy stocks in a company at $X then later on you sell them stocks for $X + $Y. You have to pay fees and commission  and possibly tax too if you make enough, but whatever money is left over is profit for you. If the idea of paying tax on your profits doesn’t appeal then you can use a financial spreadbetting firm instead of a stock broker. Your ‘investment’ is classified as  a ‘bet’ and you don’t need to pay tax on it.

That is the basic principle of how to make money on the stock market, but of course putting this basic principle into practice is rather more complicated. You need to know which stocks are likely to go up in price. First of all, unfortunately, you can’t really trust anyone. Stock market experts and tipsters frequently get it wrong, even Warren Buffett makes mistakes. Analysts often make their money by selling their ‘expertise’ rather than actually trading stocks. Company directors are often imaginative when it comes to describing their company’s prospects. Technical analysts, often disagree with each other, and lets face it they can’t all be right.

However, you have to start somewhere.

There are two basic methods for picking stocks - fundamental analysis and technical analysis. Fundamental analysis involves analysing what a company does, reading its accounts, deciding if its stock price is cheap or expensive and then buying the stocks or not. This is what Warren Buffett does and he has become a billionaire by doing it. If you have the time you can in fact just follow what Warren Buffett does and buy the same stocks that he does - you can see which stocks he is invested in here.

Technical analysis is used more by short and medium-term stock traders  - using a time frame of anything from a few days to a few months. It involves interpreting stock charts and buying stocks when certain levels are reached and then selling them when you have made the profit you were intending to make (or selling them qucikly if they start  going down instead of up).

Why do people use stock charts in stock trading ? Basically because stock charts are a reflection of human behaviour. A stock price will rise for no obvious reason then a few days later some announcement is made. The conclusion is that some people knew what was going to happen before it happened and acted on that news.

Stock charts also cause people to act even when there is no news. When a stock reaches a certain level people will sell for the simple reason that a certain level has been reached thus creating more selling and a self-fulfilling prophecy. If you are a beginner to stock trading and have no desire to really understand the fundamentals of every company you may invest in, then you really owe it to yourself to understand the basics of stock charts. Professionals use them all the time so you are at a disdvantage if you don’t know how the professionals are likely to react to certain situations.

As a stock market beginner the first thing to understand are the concepts of support and resistance and moving averages. Moving averages show the average price of a stock over a given time period. The 200-day moving average is particularly important. If a stock falls below its 200 day moving average then this is interpreted by many people as a clear sell signal, which of course drives the price down.

Support and resistance levels are the levels at which stocks fall or rise to before turning round. This is known as trending and many traders make a living by buying at the bottom of a trend and selling at the top. They then wait for the stock price to fall back to the bottom and start all over again.

Some traders say they only ever use support and resistance levels to tell them when to buy and sell. 

Finally, if you are going to be a swing trader, then another basic rule to apply is to never buy a share if the 5-day moving average is heading down.

Markets jittery and death cross on the way ?

If you are trying to make money on the stock market  then this may not be the best time to be buying stocks. The FTSE has just formed a ‘death cross’ and the DOW is very close to forming one. People ae araid and some people say that is a good time to buy, indeed Warren Buffett has been buying Tesco, i setting up an Indian insurance company and has bought himself a railroad - see Warren Buffett - but WB is a long-term investor, in the short-term it is quite possible that stock markets will fall further by at least 10% bfore heading back up, particularly now that we have seen the dreaded death cross - a death cross occurs when the 50 day moving average crosses the 200 day moving average on the way down. It is seen as a very negative sign.

Yesterday the DOW fell around 280 and today the markets are more orless flat with theDOW down 12 at 9857, which is not veryencouraging given that we may have expected a bounce from yesterday. There is also the ongoing problem with the BP oil spill to take into account - to see a live video check out oil spill live video feed

Job and housing also continue to be poor, so all in all IMHO this is not a time for amateurs to be considering buying stocks because they look cheap,they migh tlook alot cheaper in a few days or weeks.

See here for more investing news

What is Technical Analysis?

By Adva Jones

In investing, fundamental analysis is the analysis of the fundamentals of a company, i.e. whether its business is thriving or going down the pan. Technical analysis doesn’t concern itself with company fundamentals, it attempts to predict the future price of a stock based on previous prices and charts. Stock charts are a reflection of price movements over time and the volumes of stocks traded.

According to technical analysis any news about a company can be seen in the charts first and if you are adept at reading the signs then you will see which way a stock price is headed before any news is announced by the company.

Technical analysis is based on the following assumptions - prices are determined by supply and demand, supply and demand is a result of both rational and irrational behaviors, prices move in trends and these trends are generally long-lasting, changes in supply and demand can be spotted by analyzing the way the stock price behaves.

Why bother with technical analysis?

It is easier than fundamental analysis and faster. It does not make us of company accounts and therefore cannot be manipulated by companies, it tells you what to buy and sell and when. Technical analysis based on the behavior of crowds, if people expect a certain thing to happen upon a certain signal, then they will react in a particular way when they see that signal. If enough people react in the same way then the expected outcome is achieved and the analysis becomes self-fulfilling i.e. a stock price goes up because enough people buy the stock because they expected it to go up. Many hundreds of expert analysts use technical analysis and thus influence stock prices by reacting to the same signals.

There are many indicators that are used in technical analysis, but one of the principal indicators is the 200 day moving average. If a stock falls below its 200 day moving average this is considered a bad signal and people tend to sell the stock. If a stock goes above its 200 day moving average this is generally considered a good sign and people tend to buy.

If 80% of stocks in the stock market are above their 200-day moving averages, this is considered to be overbought and so people tend to sell the market. If less than 20% of stocks are above their 200-day moving averages, this is considered to be oversold and a signal to buy.

There are many other indicators used in technical analysis such as the relative strength index, Bollinger bands etc… and any online stock trading site will allow you to include them automatically on any charts you may wish to look at, you don’t need to work them out yourself. A study of all the different indicators is probably not necessary but if you are serious about investing or trading the stock market you will certainly need to learn about the main indicators.

Over twenty years’ experience following the stock market through two booms and busts!

Online Stock Trading - Stocks and Shares

Article Source: http://EzineArticles.com/?expert=Adva_Jones
http://EzineArticles.com/?What-is-Technical-Analysis?&id=2482840

The Week Ahead in the Stock Markets

Financial experts say that China is the future, but according to Robert McHugh China’s stock market is in fact crashing. which means China is about to fall into a deep recession. Plus the Head & Shoulders top pattern shows that if the SSEC drops below 1,750ish, China’s SSEC could drop to zero, that an economic calamity is coming to China. Wow. Tell it like it is RM. For people trying to make a living from online stock trading the recent weeks have created more problems than they have solved.

Who is Robert McHugh ? I’ve got no idea but you can see his full analysis here - http://www.marketoracle.co.uk/Article19539.html -

Over here that markets are certainly being skittish to say the least. Up 500 down 1000 back up 400 down 400 ! It seems nobody has much of a clue and Greece is being used as a pretext for all sorts of volatility.  But swing traders have no doubt been having a field day - for the basics of how to trade using swing trading you can see swing trading basics

According to ABC news U.S. stocks could face even more volatility this week over doubts about whether Europe can solve its debt crisis. Blaming the Europeans is of course good stuff in the USA, and in Europe we just blame the USA for causing all this crap in the first place.

The $1 trillion rescue package only gave temporary relief to investors, who worry still about the impact of the crisis on the global recovery and the euro.

Wall Street is looking forward to the results from retailers this week, and will pay special attention to their forecasts for the rest of the year. Wal-Mart Stores and Lowe’s Co are among companies expected to report.

Poor results on Friday from Nordstrom and J.C. Penney Co Inc , cast some doubt on the consumer’s health.

On Friday, the three major U.S. stock indexes finished the session down 1.5 percent to 2 percent amid worries over Europe’s debt problems. The CBOE Volatility Index <.VIX> or VIX, which is Wall Street’s fear gauge, jumped 17.1 percent. Commodity prices also dropped sharply, with oil sliding to a three-month low below $72 per barrel. The euro fell to an 18-month low against the dollar.

“We have had good fundamentals in terms of the earnings news and macro news, but nobody seems to be paying any attention to that any more. All they’re worried about is what’s happening in Europe,” said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.

So basically it’s still a mess and the famous double dip recession and a second leg to the stock market crash is stilla distinct possibility ! For more information on stock trading for beginners check out - online stock trading for beginners

Stock Market Next Week

Since March 2009 the markets have been heading slowly upwards despite many people thinking they have no right to and no justification for such ludicrous optimism, some people are still expecting a double dip of course but these must be getting fewer and fewer as the markets refuse to fall back , except the recent 7% correction.

Next week there will be stock market events that may deterne the long-term trend of the markets as investors try to force the markets further up the greasy pole. They will hope that the economic data and the statement from the central bank will provide evidence the recovery is on track.

After falling during Q4 earnings season, in the stock market today the S&P 500 has climbed back to its mid-January levels, at a 17-month high earlier this week. But its grip on the key 1,150 is tentative and it closed just below 1150 on Friday.

“If we get a big spike on the way up and it doesn’t hold on the way down, it’ll be negative for the market,” said Joseph Benanti at Rosenblatt Securities in New York.

“I’d like to see some consolidation at these levels to where people start to feel comfortable that the numbers are right, the earnings are in line with expectations and we can continue to build over the rest of the year.”

Benanti said a push above 1,150 could lead to 1,175 or 1,200.

The week;s main event will be the FEDs assessment of the economy at the end of its interest rate meeting on Tuesday. They are expected to hold rates unchanged and repeat its pledge to keep them low for an “extended period.”

Investors will be watching for any change in language that may signal when the Fed will start to tighten monetary policy, particularly after raising the discount rate last month.

Anybody new to stock market trading must bear in mind that it is like playing poker when everybody else can see your hand ! To try and redress the balance it is essential to get to grips with the basics of stock charting - in online stock trading for beginners you cannot expect to just get lucky or to read the company reports and figure out for yourself which companies are a good bargain - unless you are willing to invest the time that Warren Buffett does, for everyone else understandign the charts is very important.

Stock Market Stock Picks

The stock markets seem intent on going up - they have been up for 4 weeks in a row now, something not seen for over a year. People are now beginning to think that this may be the beginning of a new bull market. We have got through 805 on the S&P500 andnow need to get through the 845 - 850 area Oscar Carboni says we may have seen a fundamental shift in the stock markets from a bear market to a bul market although he is not totally convinced yet.

Warren Buffett started buying back in last October and although he would admit that he was early he is a long-term investor so a few months either way is neither here nor here to him.

Today is jobs numbers day so there may be some reaction to that. there may also be a reaction to the sharp moves up we have seen in the past couple of days and the fact that the G20 meeting has come and gone !

For some newspaper stock picks check out - online stock trading

For some interesting interpretations of charts from a day trader check out alphatrends

Stock Markets Rise

The stock markets are up yet again - despite me wanting them to go down ! Do they not care what I want ?

So while waiting for the stock markets to recede I have been looking into alternative investments and different ways of making money online - such as blogging for money

You can set up a free blog using blogger then re-direct your blog to a dotcom name such as Make Money Online - no need for hosting - it is hosted free on Blogger and you can still make money from your blog by putting ads. on it.

You can also try to make money by investing in First Edition Books

A Harry Potter first editionrecently sold for $19,000 !

Stock Market News - Online Brokers

If you are looking for an online service for online stock trading then naturally you want to be able to use a company that is reliable and trustworthy. So I looked around the net and discovered there are a lot of firms offering so-called services but not all of them get the same reputation from their customers.

TDWaterhouse in particular comes in for a lot of criticism

Any online stock broker must be able to provide the following as a minimum real-time quotes, streaming news, real–time charts, and totally reliable software even in hectic markets.

TDWaterhouse apparently finds this difficult to do.

In 2001 TDWaterhouse the NYSE fined $225,000 for poor service

“The New York Stock Exchange has levied a $225,000 US fine against the discount brokerage firm TD Waterhouse for being unable to process thousands of orders and failing to deal properly with customer complaints over an 18-month period because it wasn’t equipped to handle the volume.
The ruling from the NYSE reads like an indictment of how not to run an online brokerage. The exchange found that the firm was unable to process online trades on 33 separate dates between November 1998 and April 2000.”

2001 was a long time ago but some people find that they have not improved - do a Google search to see the problems people have encountered

There are plenty of other trustworthy firms around so why take the risk - when trading online you need a service you can rely upon and a customer service you can trust.

The market closed down again today by the way and it could be that the recent rally is now over - check out Oscar Carboni ’s video at www.youtube.com/futuresanalysts - he’s a good guy who tells it like it is and BEFORE the markets open, not after the event.

The market could head down another 15- 20% from here so take care.

Bear in mind that althogh Amazon are selling lots of their Kindle Ebook Reader they may be heading for trouble as Discovery Communications has taken out a lawsuit for patent infringement against eh,

Australia is on Brink of Recession

Australia is on the brink of recession ! Is that a surprise ? Everybody else has been in recession for months. Activity has slumped to its worst reading in almost 20 years.

“This is the weakest read since August, 1990,” said Westpac senior economist, Matthew Hassan. “Back then the economy had already entered what went on to become a deep and long-lasting recession.”

On four occasions in the index’s 49-year history has the growth rate been below the current level, and each of those occasions led to a recession.

A recession is two successive quarters of economic contraction.

In Australia GDP shrank by 0.5 percent in the Q4 of last year.

The level of the Leading Index, fell by 0.6 points in January to 252.1. Share prices, U.S. industrial production and dwelling approvals all declined.

“While the Leading Index continues to point to sharply weaker activity, the Coincident Index suggests a more moderate deterioration to date,” said Hassan.

That resilience is due largely to aggressive rate cuts by the RBA and fiscal stimulus by the government.

“The policy response to date suggests the economy is not heading for a repeat of the early 1990s experience,” said Hassan.

Australia has remained remarkably buoyant compared to the rest of the world so much so that many people would like to go and live there - some would say this is largely due to their relaxed attitude and their insistence upon self-centered retirement investing strategies.

Tigger Online Stock Trading Virus

The markets have been behaving rather strangely over the last few days, they have been going up ! Probably just a blip though before they resume their steady descent to DOW 4000 and S&P500.

In the meantime though there is something else to worry about - a virus which is targetting online stock traders.

The Tigger virus also known as Syzor takes control of your certain apects of your PC - only Windows is affected - it cleans up your PC of any other viruses (very nice) then sets about collecting passwords and log in data fromthe keystrokes you make.

It is particularly interested in anything to do with online stock trades and online trading and seems to have a predilection for certain online brokers - E-Trade, ING Direct ShareBuilder, TD Ameritrade, Vanguard, Scottrade and Options XPress.

It is also very difficult to detect, so you need to make sure all your Windows patches and anti-virus software are up to date.

On another note I recently read that certain credit cards are now sarting to pay people to go away ! They no longer like people with large balances that only pay off the minimum each month. They want to eliminate liabilities from their balance sheets so are offering people cash incentives to pay off their outstanding balances. It seems to be only on the USA so far but hopefully it will spread throughout the world so we ozzies can take advantage of it.

Bernie Madoff is finally off to jail, unfortunately that won’t bring back the money of those who now find themselves penniless.