Archive for: April 2007

Fundamental analysis and technical analysis are two main ways to forecast the price trend. Fundamental analysis involves researching and evaluating the characteristics of the stock or company. Technical analysis , on the other hand , pays heavier attention to price movements. In my previous post - I mentioned that fundamental analysis tells us what to buy , and technical analysis tells us when to buy.

Predicting future moves in the stock market has become a science. This form of prediction has become known as technical analysis. Traders who take this approach to investing in the stock market usually hold stocks for a short time period and then sell their stocks once the predicted profit has been achieved.

Technical analysts focus on predicting the future using observations of the past. However it is more effective to see Technical Analysis as simply a means to determine entry and exit points.

Technical analysis is the study of price data and statistical indicators that are formed by market activity. Market activity illustrates the flow of supply and demand. This supply …

There are two main categories of traders : fundamentalists and technicians. Fundamentalists are those traders who use fundamental analysis to predict price action , and technicians are traders who use technical analysis to predict price action. Today , a lot of traders use both types of analysis.

For now , lets review about fundamental analysis , which is based on economic factors.

Fundamental analysis is the practice of evaluating a company’s stock price by comparing base elements in the company’s balance sheets as well as general market factors. The main principle of fundamental analysis is to find profitable companies to invest in by comparing revenues , sales , management , etc. Fundamentals include earnings report , dividends , sales , inventories , profit margins , P/E ratio , market share , etc. …

Those looking to invest in a company will be the most likely to use fundamental analysis. This is because the research is used to not just look at the value of the company , but to look at the company itself. This includes …

New posts in these new categories … coming soon.

Meanwhile please visit the other categories and posts .

Psychological and behavioral issues almost always limit success in trading. Let us examine the qualities which facilitate or enhance trading results. The first among these is Discipline. You probably have heard the words “discipline” hundreds , if not millions of times. It is probably one of the most worn out terms in all of trading. The issue is that merely saying the word is one thing , but understanding its true definition operationally , or on a behavioral level , is a far more important thing.

Discipline is not just the ability to develop a good trading plan and stay with it , it is also the ability to know when your trading plan is not working and therefore , knowing when to abandon it.

Discipline is also the ability to give your trading positions sufficient time to work in your favor , or for that matter , sufficient time to work against you.

Discipline is the ability or having the courage to trade again once you have taken a loss. Discipline is the ability to ignore …

Online Trading is a one-man show. Partnership accounts normally do not do well , although they have a chance to succeed if the responsibilities of each partner are delegated explicitly beforehand. Only one partner makes the analysis ; the other one makes the executions. Neither can be involved in both. Another form of partnership is that one of the partners do the analysis and execution ; the other is a ” sleeping partner “. I have seen partners trade in this manner too - one do the trade entries and the other do the trade exits. So there are many possible combinations …

One of the problems with partnership accounts is the fact that one person in the partnership is responsible for the complete assets of the account. This works well when the profits accumulate , but when the losses start to mount up , arguments and finger pointing often begins.

The markets are erratic , and even the most seasoned investment professional can hit a losing streak. When that happens , even the partner …