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Unless you are able to develop a considerable trading edge over the other traders, you will end up losing your money, even if you are disciplined and organized. In this article, I discuss some elements that I use in my trading edge.

Fundamental Analysis

Fundamental analysis is the process of evaluating the financial condition of a company using financial reports, priceearning ratios, revenues, market share, sales and growth, etc. This type of analysis can be time consuming so instead of going through pages of financial reports, I simply look at IBD ratings.

I like to use Investors Business Daily (IBD found at investors.com) to get a quick overview of a stock. The IBD rating covers:

1 – Earnings Per Share (EPS) rating: tells me a stocks average short term (recent quarters) and long term (last three years) earning growth rate. The number I see is how the company compares to all other companies. The scale runs from 1 to 99, 99 being the best.

2 – Relative Price Strength (RS) Rating: Measures a stocks relative price change in the last 12 months in comparison to all other equities. The scale runs from 1 to 99, 99 being the best.

3 – Industry Relative Price Rating: Compares a stocks industry price action in the last 6 months to the other 196 industries in IBDs industry list. The scale is from A to E, A being the best.

4 – Sales + Profit Margins + ROE (Return on Equity) Rating: Crunches a firms sales growth rate during the last 3 quarters, before and after profit margins and return on equity into one letter. The scale is from A to E, A being the best.

5 – AccumulationDistribution rating: Applies a formula of price and volume changes in the last 13 weeks to determine if it is being accumulated or distributed. A = heavy buying, C = Neutral, E = heavy selling.

If you like the idea of including fundamental analysis into your trading plan, consider trading only stocks that meet some minimum requirements – for example A or B, > 70, etc.

I like to use fundamental ratings for longer term trades such as the ones I plan on weekly charts. It is not really useful if you trade intraday.

Technical Analysis

Fundamental analysis is great to build a list of strong stocks, or as a way to filter out weak stocks, but thats about it. It does not provide you with an objective method to enter and exit trades. All my trading decisions (entry, exit, and stops) are based on technical analysis.

Technical analysis is the study of prices. The price action draws patterns on charts and because human behavior can be repetitive, the price patterns can also be repetitive.

You can choose from a variety of chart types. The Japanese candlestick charts are by far the best and it is the only form you need. There are entire books dedicated to the study of candlestick patterns – if you are serious about studying candlestick charts, look at books written by Steve Nison and and Gregory L. Morris.

- Support and Resistance: The most important concept in technical analysis is Support and Resistance. It forms the foundation for every trading decision and could cover many pages but I will limit myself to simplified definitions and a couple examples:

Support level: A price level that a declining market or stock failed to penetrate
Example: the low of the previous day forms an area of support and is often used as a stop loss.

Resistance level: A price level that a rising market or stock failed to break through
Example: a prior high in an uptrend forms an area of resistance and can be used as a minimum objective to take some profits.

Some technical indicators may also provide some support and resistance, for example moving averages, in part maybe because so many traders expect it.

- Oscillators

An oscillator is a technical indicator that tells you at a glance whether a market or a stock currently trades in an “overbought” or “oversold” condition. Some traders use oscillators to forecast a change of direction. Some examples include the RSI, Stochastic Oscillator, and MACD.

There are hundreds of oscillators and technical indicators. I personally look at them to filter out some stocks if I have too many good ones to choose from. I never use them as a signal to open or close a trade.

- Public Sentiment

I look for support and resistance on the VIX (Volatility Index) daily chart to anticipate reversals.

I look at the PutCall Ratio (5 MA and 10 MA) on the daily chart to see if traders are too bearish (MAs > 0.8) or too bullish (MAs < 0.5).

(MA = Moving Average)

- Market internals to see if the market is overbought or oversold

I look at the TRIN (5 MA and 10 MA) on the daily chart - overbought (MAs < 0.8) or oversold (MAs > 1.2).

I look at the McClellan Oscillator the market is overbought if it rises above +70 and oversold if drops below -70. A buy signal is generated if it falls into the oversold area (-70 to -100) and then turns up – a sell signal is generated if it rises into the overbought area (+70 to +100) and then turns down. If it goes beyond the -100+100 levels then it may be a sign of continuation of the current trend.

- Market and Industries

I like to buy stocks from industries in a strong uptrend and short stocks from industries in a downtrend. I also consider the direction of the industry for the day (positive or negative).

Putting it all together

This article is not about teaching you how to develop an edge but hopefully it shows you that there are many different tools that can be used to improve your odds. It takes time to find a combination that fits your personality. It takes time to find what works for you.

This day and age presents a large amount of opportunities to invest your money. But sometimes its difficult to choose the best investments that are suitable for your situation. If you are interested in investing your money in stocks then this article may be of assistance to you.

Below you will find ideas on how a little research can take the stress out of stock investing and hopefully fetch large returns from your stock investment.

Find Investments That You Trust
The best way to choose the right stock is to research a stock company to find information that may or may not be desirable. Consider only companies, which have been trading in the public market for a long period of time. These companies often provide extra security and stability for a well maintained and branched out investment portfolio. Use the information you get from stock market quoting to determine if you think the particular company is a fit for you. Periodically keep yourself up to date on the companies your investing in, just because a company is stable now doesn’t mean they’ll be around several years from now.

Search for Recent News
A good way to find profitable investments is by reading news stories that may influence the value of a companies stock in which you are going to invest your money. By updating yourself about the stock market you can be in touch with top stories of public companies, which can keep you informed about what is going on in the market (companys stock value is going up or down). This can be especially useful if you get wind about major scandals or negative factors on time and are able to sell shares before the price drops. Alternatively this will also enable you to invest before an upcoming event that may cause a spike or upwards trend as well.

Keep an Eye On New Technologies
You should also read news about technological progress and fields like health care and biochemistry. New advancements in these fields can cause a sudden rise in stock prices, quickly earning you a nice profit. Learning about new and advanced technologies before they become well known, can potentially give you long term benefits and opportunities to engage your money in other investments. Don’t expect each and every new technology to cause an increase in stock value, but there is a better chance for making good profits from initial investments.

Invest for the Long Term
It is important to know about long term investments. Usually long term investments give more benefits than many short term investments. Many short-term investments also do well (scheduling your purchase and sell ahead of time can also save you some heartaches); long-term investments will add stability and security to your portfolio.

Find Yourself Some Good Help
With not too much trouble you will find many other people investing like you are. Ask around, there’s a good chance many of them use a stock recommendation service or a broker they’re happy with. In this case they’ll gladly recommend their services and if youre new this may be a smart way to get started – this should also help you to avoid stock broker fraud as well.

If you are looking for a Stock Investing Tip you have come to the right place. Investing tips come from everywhere and from all sources. From strangers you over hear talking in the store to the gurus on the television.

When we are in a strong bull market, and it seems like the market will not go down no matter what, you can get a great stock investing tip just from throwing a dart at the list of stocks in Investors Business Daily, and come out with a winner.

An Investing Tip can come from an article you read in the newspaper or a magazine. Usually the time you read about it, the stock has already made it’s big move. That is when the smart money starts taking their profits and sells to the dump money.

Sometimes investing tips come as a pump and dump. With the smaller priced stocks it does not take much money to buy alot of shares. They will then start talking about, or writing newsletters about how good (pump) the company is just to get people to start buying the stock, and at the same time they are selling (dump) their shares.

If you are getting into the market because of a tip you got, you are bound to lose your hard earned money. Sure you might get lucky a few times, like in a strong bull market, but in the long run you will eventually lose all your money that you set aside for investing.

The best stock investing tip you will ever receive is going to be right here. Do not buy any stock on any tip that you here!!! Do not put your hard earned money in any investment blindly, do your homework. Many beginners in the stock market will feel that they have to jump in on the tip they have gotten in order to make the big buck. They are afraid the train is going to leave without them. They don’t want to be left out of the big move.

There is no reason to be jumping into any stock right away. There are thousands of stocks to invest in. Let the stock price come to you, do not go chasing a stock.

Learning how to invest in stocks is not difficult, but it does take time, just like learning anything in live. Take the time to learn, there are many books to read that will get you going in the right direction. Read them, study them, study the market, practice trading on paper. Take the time to learn how to invest, you will not regret it. The stock market is not going anywhere, it’s been here for a long time, and will continue to be here for a long time to come.

Soon the only stock investing tip you will be listening to will be coming from the knowledge that you have learned, and that is the best investing tip that you can get. Then your friends and family will be coming to you for investing tips.

Online investing continues to be popular among consumers, due in part to the fact that it meets most Americans’ requirements – it’s fast, easy and convenient.

In fact, according to research conducted by business research firm JupiterResearch, online trading households are expected to grow from 17.3 million in 2005 to 22 million by 2010.

With so many companies competing for a piece of that pie, it can be difficult at best for consumers to navigate the ever-changing landscape of online investing.

For many, the hardest part is not making that initial stock purchase, but investigating the best (and worst) buys.

So, where does one start?

Fortunately, with the advent of the Internet, consumers are only a keystroke away from a plethora of information on the good, the bad and the awful. The downside? Users can be so overwhelmed by the amount of data that the task of researching stocks can be daunting.

One company is helping Internet investors by making it easier for them to get only the news and stock alerts they want.

Centale Inc. (OTC BB: CNTL), based in Fort Lauderdale, Fla., is building a “real time” comprehensive news and stock alert application that is keyword-programmable called “Market Fragger.” Forbes.com will be the first to implement this service.

The system will allow users to customize financial news by inputting their own search criteria. The information from the search is then delivered directly to the investor’s desktop on both PC and Macintosh. Centale also plans to release a wireless application version.

This capability can potentially allow the investor to spend less time searching and more time making smart investing decisions.

Forbes.com has approximately 8 million to 10 million visitors per month.

While there is no doubt that computerized trading can be faster, cheaper and more convenient than going through a traditional brokerage house, it’s important to research your options to determine what’s best for you and your portfolio.

Buying penny stocks can also really risky. But you can lower that risk by researching the stocks. Although this takes a long, long time and is very difficult to do.. Wouldn’t it be nice if you could find out what stocks were going to be hot? If some magical genie could tell you when to buy and when to sell? Well there is no perfect formula to stocks. But there are definitely ways to improve your chances of picking a winner. I have always wanted to get in the stock Market but Have always been way to fearful of the losses. I was looking for some kind of “genie” and guess what I found one! Now I’m not going to tell you to buy this thing because I want you to go and but all the books out there on stocks first… then when your head is about to explode from all the info you just crammed in your head you can come back and look at what I’m saying.

This “genie” I found was call “Marl” and he is a stock bot.
He has no emotions, so he can pick stocks on cold hard statistics. He can also analyze 100s of stocks in the time it would take a stock analyst to do one! Like I said there is always risks with stocks but “Marl” almost eliminates the chance for failure. For the full story on “Marl” check out his site at 26532.affstocks.hop.clickbank.net” target=”_top”>Stock “Bot”

As businesses begin to lose money and booming, raging profits give way to something a little more on par with their daily expenses the door to successfully investing in the market swings wide open and invites you in. The principles of investing in the stock market during a recession are remarkably similar to the principles of investing in real estate. When you invest in the stock market during a recession you have the opportunity to take advantage of a companys poor fortune.
How? When companies are making money hand over fist the value of the company goes through the roof, and as the value of the company rises so too does the value of its stock. So when a company is riding high the price of the stock is going to be high as well. Shift the situation a bit, however, and the story changes.
Take mortgage giant Fannie Mae. In the month of July 2008 alone the value of its stock fell from 16 and change to a little over 8 a share. By September of that same year the share price was under a dollar courtesy of the sheer quantity of its borrowers that had defaulted on their loans.
Fannie Mae is only one of many companies who suffered a similar fate during the last recession. Its situations like these that present stock holders willing to think in the long term with a golden opportunity to make a profit. If they can purchase the shares when they are low, as in Fannie Maes case, less than 1/16 their value, they can sit back, fold their hands and wait for the recession to end. When the recession has ended they can sell their shares for a tidy profit, sit back and pat themselves on the back for a job well done.
That doesnt mean you should go out, find a company thats failing and throw your life savings into their stock. Thats a recipe for disaster that many investors have fallen into over the years! This is a golden opportunity that definitely shouldnt be allowed to pass you by, but there are a few things you should watch out for.
1)First and foremost, when youre choosing a company to invest in its essential that you choose one thats going to weather the storm of the recession and bounce back when the time comes. If you sink your savings into a company and it goes under as a result of the recession youre going to be no better off than you were before. To determine whether or not a company will survive to see a bright new future rather than being culled out when the recession separates the wheat from the chaff, answer the following questions:
How long have they been in business? Companies that have been in business for many years are unlikely to go under because of a simple recession-in fact, theyve likely weathered many of them in their time. A company thats already proven their staying power is an excellent choice of investment, and should definitely be given first consideration.
What do they do? Although companies that specialize tend to be movers and shakers when the economy is normal, if they are unable to expand and macro themselves (a topic well talk about in greater detail in just a bit) to adjust to the changing economy theyre going to go under. If a company has not been able to expand and diversify, and if it doesnt offer a product that people are guaranteed to need day after day and therefore are pretty much guaranteed to keep coming back for, its at a high risk for going under during the recession and should be given a wide berth.
Is their industry stable? Historically, there are certain industries that tend to fare better in a recession than others, and these should be given firm consideration when youre expanding your portfolio. Utility stocks (telephone, electric, gas), food and escapes such as cigarettes, alcohol and gambling have a history of tremendous success when it comes to riding out a recession because these are the industries that most consumers deem necessities and will continue pumping their money into.
Is it a necessity? The industries listed above are stable choices during a recession because they are deemed to be necessities; however, if there is one industry that you can be sure is not going to go anywhere in the face of any kind of recession, it is the healthcare and pharmaceutical industry. Regardless of what the economy looks like, people are going to get sick and theyre going to need their medication to recover. This is a strong, stable choice for your portfolio, and its one that you can count on to bring in a steady, if not always remarkable, return.
What about gold? Gold isnt going anywhere. If youre looking for a safe, solid and low risk investment during a recession period, gold is an excellent choice. There is very little chance that the value of gold is going to depreciate rapidly, and its definitely not going anywhere.
Successful investing isnt always just a matter of knowing what to invest in. Many times, its also a matter of knowing what not to invest in. There are certain industries that often bring about good returns when the stock market is high, but who are extremely risky during times of recession. Can you guess which industries those are? Right. Any industry that specializes in luxury services is going to take a hit when conscientious investors start counting their pennies, and as a result so are their stockholders. Good industries to avoid include airlines, luxury resorts, restaurants (unless they have been around for a while) and, of course, financial and lending institutions (who are likely to go under as their borrowers slip further and further into debt).
If you arent familiar with the process of investing the best thing you could do for yourself to ensure the continued growth and success of your investments is find a skilled financial counselor and/or investment broker to work with. Ideally, theyll be able to look at a companys past history and their current place on the market and let you know whether or not they are a good choice for investment. Choose your broker with care, however; the last thing you want is to see your hard work and cautious planning fall apart because your broker was overly ambitious and pushed you into an investment that was doomed to failure from the very beginning.
2)Diversify. Regardless of how established a company is, theres no way to positively predict how they are going to react in the event of a recession. Your mother always told you not to put all of your eggs in a single basket, and she was absolutely right. If you can spread your investments around a bit through several companies in a variety of industries you will stand a better chance of being able to profit from this recession. Even if the bottom falls out of one and it goes under as a result of the poor economy you will have the others to fall back on and ensure that you are never left holding absolutely nothing at the end of the day.
Like real estate, investing in stocks now opens the door to the possibility of tremendous profits down the road. You may not be able to enjoy the same 100,000 gain you would have had you chosen to invest in houses rather than stocks, but you will enjoy a comfortable profit that will help carry you through on into the new economy.
Picture this. Lets say that you decided to take advantage of Fannie Maes current position and bout 4,000 shares of stock. (For the record, this is not something I recommend; Fannie Mae is simply a hypothetical example for the purpose of this book). At a dollar each, youd be able to acquire the stocks for under 4,000.
Not a bad days work, all in all. You set the stocks aside and forget about them as the recession draws to a close. Somehow Fannie Mae has managed to weather the recession, and because of it your stocks rise in value back to their original price of 16 apiece. That means that the stocks you purchased during the recession, the ones that you paid less then a dollar for, are now worth sixteen times their original value. That means that instead of the 4,000 worth of stock you thought you had, youre now sitting on 64,000 worth of stock.
Thats a 60,000 gain. 60,000, a years worth of salary for part of Americas citizens (two years worth for many) to get you started in your new life, all because you had the good sense to invest in the stock market when the selling price was low and the stocks were being agreeable. You saw the opportunity and you took it, and now youre going to reap the rewards.

There are many persons that run towards stock investment as a means to make some quick money. This is perhaps however not the best investment option for persons with short term rewards in mind. The best option when thinking of investing in stocks is if you are interested in accumulating funds over a long period of time. One such example is the investment for future needs such as a nest egg for retirement and so on.

In stock investment both short term and long term investments come with risks attached and therefore nothing is truly guaranteed in the stock market. Today could be very good and tomorrow very bad resulting in great gains or great losses as the case may be. However, in terms of long term investment, it is shown according to statistics that there are no 20 year portfolios that have lost on the stock market. The average returns have averaged about 10 percent and these accounts all have a broadly diversified portfolio of stocks.

In the short term the market is very risky. The market will go up and then go down so if you are only thinking of investing for a short period then this is not the best option. If you are nearing retirement age and now beginning to invest in stocks this is not a good option. The best option in these cases as a protection against inflation, rather than stocks, is to invest in stable investments such as bonds and other cash instruments. This offers more security than stocks in the short term.

So how long is considered short term? Many persons are under the misconception that short term means less than a year but this is in fact not so. In terms of stocks short term is considered to be five years or less and some persons will recommend more years rather than the minimum of five years. A good rule is that if you are going to need your funds in the next five years then stay away from stock investment. Another point to note is that unless you are an active trader then short term investments make no sense. If the funds being used are for retirement investment then being an active trader is also not recommended.

The average down time for some markets is a year but this has been seen to last much longer a well so though for a long term investor this downtime may seen to be a lifetime it will pass but if you are a short term investor you will lose a lot depending on the market fluctuations. Stock investment will offer many great opportunities but can be devastating for a short term investor. If you know that the funds you are investing will be required for use in a short time then choose investment options that are more secure and protected. It is true that you may get lucky and make a fortune but it is also true that the risks are high and that you can lose everything.

Seasonal Trading Strategy for Stock Funds and US Federal Employee TSP 401k Retirement Accounts

Sell in May and Stay Away Words to live and invest by? I dont know who coined the phrase but I did a bit of research and yes this strategy would have worked out for you is you had implemented it over the life of the TSP retirement account. Of course we know past performance does not guarantee future results but there is something here that makes this investor think that just maybe there is something more to the story this time.

There are five funds available in the Thrift Savings Plan.

The C Fund is based on the S&P 500
The F Fund is designed to match the bonds in the Lehman Brothers U.S. Aggregate (LBA) index.
The G Fund invests in short-term U.S. treasuries
The S Fund follows the Wilshire 4500 index
The I Fund follows the EAFE index

From its inception in 1988 through the end of 2005 the C Fund (based on the S&P 500) has averaged 12.61556% per year. In the months October through May it averaged12.87611%. From June through September it averaged -0.26056%. For the same 18 year period, the F Fund averaged 3.356111% for the four months June through September. Had you sold all of your stock C Fund on May 31 and moved all your money into the F Fund and then moved all of your money from the F Fund back to the C Fund on September 30th, you would have realized a 3.616667% per year increase in your rate of return over 18 years. Let me repeat this, a 3.616667% annual increase based on only two trades per year.

From 2001 through 2005 the C Fund (based on the S&P 500) annual average was only 2.22%. Its average gain October through May was 9.24% while its June through September average was an appalling 7.02% loss. Utilizing the same strategy as above, our average rate of return would have jumped from an anemic 2.22% to a healthy 11.38%. That is an amazing increase of over 9% based on just two trades per year.

Since its inception in 2001 the S Fund (based on the Wilshire 4500 index) has averaged 9.314% and the I Fund (based on the EAFE index) averaged 6.56%. They show the same pattern of gains October through May, with gains of 14.05% for the S Fund and 10.368% for the I Fund annually during those eight months. They also continue the S Fund pattern of losses Jun through September, a 4.736% loss for the S Fund and 3.808% loss for the I Fund. Using the same strategy of eight months in the S and I funds and four months in the F Funds, you would have realized additional gains of 6.336% for the S Fund and 5.378% for the I fund brining your rate of return to 15.65% for an S+F strategy and 11.938% for an I+F strategy.

What do you think about this? Join the TSPcenter forum and let me know. My gut tells me we are in for a bad summer. Of course that could be a result of the pepperoni pizza I just ate.

Since September 2004, the S&P Retail Index has been caught in a sideways consolidation channel at between 400 and 500, unable to establish a sustainable trend in one direction or the other. During that time, the monthly retail numbers have been largely mixed. But in January, the retail data (excluding auto) was impressive, showing growth of 2.20% versus the estimate of 0.8%. It was the strongest reading in years.

Yet the initial optimism appears to be fading after seeing mixed reports from the nations retailers on Thursday. The early data suggests that same-store sales growth will be sub par compared to what we saw in January.

The reading in January may have been an aberration because of warmer than expected temperatures. The surfacing of cold weather in February apparently sent a chill through the pocketbooks of consumers. Also, the strong January sales may have taken away from spending in February.

The reality is the absence of a positive trend in retail makes investing in retail stocks more of a risk. You need to pick the right company. Even bellwether stocks such as Wal-Mart Stores (WMT) are struggling as far as its share price in spite of some decent sales results and same-store sales growth. But the current valuation deserves a look.

Youth oriented clothes retailer Gap (GPS) is a company that is clearly struggling at the cash register. Its February same-store sales crashed 11% year-over-year, well above the Street estimate calling for a decline of 6.80%. This followed on the heels of an 11% decline in the companys Q4 earnings along with a FY07 forecast that was short of Wall Street expectations.

GAP expects comparable-store sales to be negative in the first half and turn moderately positive for the remainder of the year. Same-store sales are widely viewed as the best indicator of a retailer’s health.

For investors, GAP is clearly a turnaround play that could pay off if it can somehow figure out how to attract shoppers. The fact is the company has great brand awareness and this counts for something in this brand conscious world we live in.

On the upside, you have a company like Best Buy (BBY), a dominant market leader in consumer electronics. The stock is just below its 52-week high, up 69% from its yearly low.

The reality is retail spending may be impacted by the higher financing costs associated with the rising debt loads across America. The personal savings rate is declining and was negative in January. Consumers are eating into their savings and you know this cannot be good for retail.

Note: you are welcome to post this article on your site if it is financial related. You must cut and paste the bio and make sure the web site link is live. Also please e-mail me to let me know.

The report of stock research contains all the information like the fair value estimate of a companys worth. Likewise, guides on when to buy and when to sell stocks as well as the selling prices of stocks are also discussed and displayed on the stock research report.

A stock research report is accomplished by expert analysts who are renowned in their own companies and their industries. Their reports mainly cover strengths and weaknesses, lines of business, whats good and bad about recent stock investment decisions as well as some projections of what to expect from a company in terms of its financial health.

The stock research report also tells you whether a company is worth buying or selling and just when to buy and sell stocks from this company. Knowing such information can help you in earning back a great deal of profits from your stock investment.

In addition, the significance of such reports cannot be taken for granted, especially in a world where the market is unstable, wherein in a blink of an eye you might lose everything you have invested. Stock research reports keep you up-to-date with the latest and timely developments happening in the stock market. Stock reports are just one of the services provided by most online stock research providers.

When you sign up or joined an online stock research provider you were provided with stock alerts regarding new analyst reports plus some daily commentaries. Aside from that, you will also enjoy the privilege of having daily dose of expert opinion about companies they cover in the news. They also have portfolio alerts that tell you when your portfolio is underperforming or outperforming.

With a stock research report you will always be guided on what course of actions to take especially if you cannot monitor your portfolio regularly. Remember that the stock investment requires for keen monitoring or else you will find yourself losing money instead of gaining back more profit.

However, the stock research report is not a free service, most providers of these types of reports only offer free-day trials for new members but afterwards would require for a monthly or annual subscription fee.

Be sure to correctly choose the stock research provider; opt for those highly regarded providers that already have names in the stock investment market. Dont be fooled by those stock research providers claiming that they have the best stock investment solutions and promises you very high rate of investment returns. These promises often times just remain to be a promise that can never be realized since the provider that you have chosen is really not that knowledgeable in stock investment.

Look for those providers that possess credible portfolios and to be really sure you may try to confirm by researching further the authenticity of their claims. You may also try to ask your friends, colleagues and family whether they are familiar with the provider you are investigating. Even better still, ask people in the stock market if they are familiar with the provider you are inquiring about. If it is really true that they are a reputable stock research provider, then their reputation will echo the sentiment.