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 …

Not long ago , my wife bought a high pressure cooker during our trip to China. This cooker can do the job at less than half the time needed for a normal cooker. Many countries banned this item , probably due to safety reason. I had advised my wife not to use it , after seeing how the pressure builds up inside the cooker. My blood pressure builds up too when I see her using this device. If you do not see any new update in this trading blog for months , you probably can imagine what happened to me .. touch WOOD !!!! …. I have another 50 thousands blog posts to share with you , and I need to live long to tell you my whole trading journey …

I am seeing the price we may need to pay for speeding up job. Many traders friends of mine like to think that ” trading is a get rich overnight job “. I always like to reverse this …

When we face defeat in trading we traditionally encounter grief. This is natural. This emotion is unavoidable and can be handled like all other emotions. It merely requires the undertaking of appropriate mindset and strategies.

The first stage in dealing with grief is to simply acknowledge that something has gone wrong. When things go wrong - Deal with it …

If we possess the rationality to be a trader then we will not be able to hide from what has happened. Denial is part of the arsenal of the amateur trader , not the professional. A loss is a loss and there is nothing we can do to alter this. Acceptance is the key to this first stage.

In the amateur trader , denial will give way to anger. This anger will be directed at almost any inappropriate source. Amateurs become angry at their system , the advice that was taken or at the black box sitting on the desk. They will blame almost anything , including their dogs …
Anger gives way to personal recrimination which in …

We all understand this simple word ” ALWAYS ” in English , I believe.

However , during trading this may turned into an alien word. Many of us probably have ” Always use Stop Loss ” written somewhere in our trading rules. Some perhaps feel it is just good enough to mentally record this key phrase in their mind.

Regardless you have it written on paper or have it recorded into your head , the reality during trading can be a totally different matter. Do you agree ?
Probably you can remember some of the common phrases that either you yourself mentioned before , or that you heard from fellow traders …

The followings are some of the common phrases that might sound familiar to you …

I always got stopped-out , so I won’t use them.
Everyone is putting their stop-loss at the same price , and that will make the market makers take out my stop , that’s why I don’t use stop this time.
I don’t use stop this time because I am watching the market very closely …

What creates loneliness in a trader ? The answer is in these 2 four-letter words - Draw Down.

As human , we tend to talk more about our winnings than losers. That is quite natural , probably we want to maintain face value. This “keeping to ourselves” behavior is stressful and may be a time bomb to our health and psychology …

The loneliness of trading is a painful reality for traders , regardless of their level of success , their experience or their personal relationships. Trading is the most lonely job in the world , probably. The stresses built into the profession of trading isolate traders from their natural , emotional supports and outlets.

Large losses , competition , and the built-in psychological and physical demands of trading create a perfect climate for traders to learn how to repress their day-to-day feelings of fear , guilt , sadness , isolation and boredom in order to keep going.

Unfortunately , it is this survival pattern of blocking and not communicating feelings which can make a trader feel …

One of my good friend , Adwin , wrote this article …

The United States of America has its fair share of misfortunes in recent years: From the dramatic tragedies of September 11, to the ongoing battles its armed forces had to bear for the past four years since American troops first stepped onto Afghan soil (and subsequently, the invasion, ouster of Saddam Hussein), the US military has, for the first time since its withdrawal from the Vietnam debacle (a serious, major loss of face after two decades of fighting the Vietcong’s army of farmers and peasants), the American public has begun to feel towards the Bush Administration. This was reflected, no less, when the Republicans lost their mid-term elections for the Senate Committee, and as a result, the Republicans have faced formidable opposition with regards to its war policies.

Indeed, the mounting casualties inflicted on a daily basis on American troops, plus seemingly insurmountable difficulties that American and Allied troops have to face in Iraq, clearly indicates an error of judgment on the Bush Administration’s part. The so-called “war on …