stock market invest trade forex money

“Investment is most intelligent when it is most businesslike”. Commit this to your memory; it will do you a world of good.

It is extremely important to know the difference between “to invest” and “to trade”. While the former is the road to riches, the latter is the way to ruin...

To invest in the stock market means to exchange your money for equities that promise safety of principal and a good dividend yield, after careful investigation. To trade is more akin to gambling. It goes after the price instead of the value. Buying and selling in short period of time (usually within a month), traders hope to make quick gains by riding with the trend. Many have failed and many more will find that trading does not pay in the long run.

The stock market is a marathon, not a sprint event. Safety of principal is your first priority. If you cannot cut losses quickly, follow the rules of Warren Buffet. His number one rule is: Never lose money. And his number two rule is: Always remember rule number one.

If you do not want to lose money, you must make absolutely sure that every buy of yours is a value buy. That means buying sound, solid and well-managed companies, after through research, at rock-bottom prices at all times.

Think intelligently and buy wisely. You need to be smart from the start.

Good luck and all the best.

Candlestick charting is the Japanese version of bar charting. The Japanese used the technique to trade in rice in the 17^th century. Candlestick charts and bar charts give you the same information but presented in different graphic forms. Each stick or bar gives you four information, i.e., the opening price; the closing price; the high price; and the low price. The volume is shown at the bottom.

 A white candlestick is one that closes higher than the opening price. A black candlestick is the other way round, i.e., the closing price is lower than the opening price. A white candlestick is bullish. a black candlestick is bearish. Thus, in chart reading, the closing price is important.

Candlesticks have many fanciful names. To name a few there are: marubozu, spinning top, dogi, hammer, hanging man, dragon fly and grave-stone doji . Each name suggests a different kind of candle and carries with it a different value.

 By looking at a daily candle, we can know whether the bull or the bear is in control or whether they are about evenly matched on that day only. This one day information is of little use. So we have to look at the previous candles to get more information. By looking at the past actions, we try to predict what is likely to happen going forward.

A doctor will listen at your heartbeats, take your blood pressure, and give you and overall examination to evaluate your overall health. But to give you an operation, he has to do many other things as well, like a blood test, x-ray, etc.

 Likewise, in the stock market, if you want to buy or sell, by looking at a few candles is not enough to enable you to make a good decision. Hence, you have to look at the patterns formed by the individual candles. These patterns are many and varied. Each has its own meaning and interpretation.

 It is beyond the scope of this commentary to explain the meaning of each pattern as this will probably go into more than a hundred page. If you are keen to learn, get yourself a good book and study it like studying for a degree. It is not easy to become proficient in chart reading. Once you are good at it, your return can be enormous.

 At Metastock, we have the monthly charts, weekly charts and daily charts. Normally, I like to look at the weekly chart to get an overall view of the stock and then to look at the daily chart for the details. If we can include a half-hourly chart into it, it will be very useful as we can get the breakdown figures as well. Any genius out there?