All about investment

By:Jason Ng

Let's cut to the chase...

The biggest and most critical danger of technical analysis is that, after a while, it starts to show you exactly what YOU WANT to see!

In quantitative studies, there is a phenomenon where your research starts showing you what you want to see instead of what is really happening and that is known as "Data Mining". Data Mining occurs most frequently when there is a huge benefit to you if the results are showing one way instead of another. This is the exact same phenomenon in technical analysis.

In technical analysis, charts start showing you what you want to see especially when you have made a mistake and needs the stock to go one way instead of another! Suddenly, the deeper you dig into the myriad of technical indicators, the more "evidence" you seem to find supporting your mistake, giving you the eerie confidence that your mistake is going to turn out just fine.

We all remember how that turned out, don't we?

Technical analysis is essentially a study of the various ways to interpret historical price and volume action in order to form an opinion of future direction. Because technical analysis methods have become so complex over the years with literally THOUSANDS of technical indicators that have been developed, the average amateur investor can always find ways to make a chart look the way they want it to and point towards a non-existent future direction!

Before anyone here thinks that I am against technical analysis, I am not. In fact, my main trading system, the Star Trading System is a technical analysis based option trading system that has made me money over and over again, year after year. So, what really is the problem? The problem is the misuse of technical analysis and the misuse of incompatible technical indicators! Until you really understand the formula and logic behind every technical indicator, the purpose for which each indicator has been developed for and what other confirming indicators works with each other, you will never be able to use technical analysis to form an educated opinion! You will continue to see only whatever you want to see. Some call it "Analysis Paralysis", I call it pure ignorance.

Sadly, it takes years of research and heaps of lost money to get technical analysis right and it will only become harder and harder to get right with ever more complex and new indicators being developed everyday. A lack of knowledge and lack of time to attain that knowledge has always been the bane of all amateur traders. That is why following a developed and proven trading system with a proven, proprietary mix of indicators is the best thing an amateur trader can do.

So, the next time you look at a technical analysis chart, remember, are you merely looking to prove what you already have in mind? Because if you are, then you are very likely to find all the evidences you need to support your own views.

About the Author:
Jason Ng is the Founder and Chief Option Strategist of Masters 'O' Equity Asset Management ( MastersoEquity.com ) and author of OptionTradingPedia.com .

by James Kong

Business corporate of large sizes - airlines, shipping lines, heavy industries and mining etc. need huge capital towards formation and successful running. Governments the world over have a tendency to nationalize a majority of these businesses, keeping in mind the welfare and up gradation of the standard of living of their citizens. Apart from these Public Sector Undertakings, there are a number of private sector corporate companies to cover up the gap in manufacture, trade and commerce to fulfill the need of the people nationally and internationally.

Joint ventures between the Public and Private sector as also between Corporate Companies of two or more nations are very common in the economic field. All these ventures need capital outlays of immense sizes, running into trillions of appropriate currencies. Leaving alone the small fraction of individual ownerships, a vast majority of these corporate ventures are dependant upon contribution of money from the public at large. Mobilization of such enormous sizes of capital input is facilitated only by issue of shares, stocks and securities to be participated by public investment. The share market business of every country carried out in the trading floors of Stock Exchanges is the back bone of capital mobilization for corporate ventures of high magnitude.

Rules and regulations of corporate formations are being enacted by the Governments to regulate the trade practices, as also a fair and equitable distribution of wealth with no rooms for malpractices. Company Laws of every nation stipulate that, of course with minor differences here and there according to the age old customs and practices, mobilization of public money towards the objective of corporate formation should be done only in accordance with the procedures.

The first step for the formation of a business corporate is registration with the authorities by submission ,of the Memorandum and Articles of Association describing in detail the share capital and its proposed mobilization methods, apart from other particulars. The registered companies are allowed to issue shares for public subscription after listing them in the respective Stock Exchanges. These Initial Public Offers (IPO) are being scrutinized by the public with relevance to the strengths and weaknesses of the proposed venture. It is here the Share Market dealings play a vital role in the evaluation of the issue. Such of those corporate companies that have already established a goodwill among the public opinion through their performance in earlier years, find it very easy to get their shares oversubscribed than the anticipated quantum. Observers and economists watching the emerging stock market movements guide the investors in this regard.

Secondly Corporate business houses whose shares are performing well in emerging stock markets over the years can capitalize their goodwill into mobilization of huge sums of money by securities, debentures and bonds of public debt for their expansion and diversification activities.

Thirdly, based upon the performance of the shares of companies in the same sectors, like steel, cement, building materials, consumer products and other heavy industries like ship building, mining, airways etc. in the emerging stock markets, new ventures in these sectors also get benefited in easy mobilization of capital from the public. Thus emerging stock markets and movements of share prices in "bullish" or "bearish" trends have a strong bearing on healthy corporate financing in all European, Asian and Southeast Asian countries.

About the Author
Jame Kong at Bullish Site Resource for Emerging Stock Market

by: Thomas Kapios

"Window Dressing" Funds In Order to Make them Appear More Valuable

Many banks use the "window dressing" method when they try to sell mutual funds. This is a technique that is often used in order to make something appear much better than it actually is.

An Example
For example, let's say we have stock A and stock B; stock A increased in value while stock B declined. Now suppose the Mutual fund proportionally has a lot of stock B, however. They then sell this stock B and buy more of stock A. This will make people think that the fund is doing really well because stock A goes up. So people fall for this method and end up purchasing a fund that is weak.

In my opinion the best choice:
In my opinion, the best choice that one can make is to buy an exchange traded fund with low expense ratio and no load. (No load means that there is no fee associated with it, it provides a better choice than a high-fee load).

Caution
Allways be careful when you buy a fund in a bank. Always have in mind that you are not required to buy the fund on the spot. The best method is to ask for a prospectus. Go home and review the prospectus, and when everything seems to be in order, you can buy it.

Mutual funds information and tutorial; please take a look if your intrested

By:Dean Brown

The turn of the century brought with it another turn: that of the baby boomer generation into retirees. However, retired boomers aren't spending their free time puttering around the country in RVs or taking in 18 holes on the golf course. Rather, they're starting their own businesses.

A 2006 study by the Ewing Marion Kauffman Foundation showed that people between the ages of 55 and 64 were the ones most likely to start up a new business.

Why, after working for 30 or 40 years, would people want to suddenly start working more? According to a recent article in U.S. News & World Report, it's possible that the baby boomers are having a sort of existential crisis. After so many years spent working for other people, they want to work for themselves. And, unlike many young bucks, they actually have the money and experience to do it.

To many of these aspiring entrepreneurs, I offer a humble suggestion: why not consider a self storage building for a post-retirement career? Self-storage steel buildings is one of the few small business investments that's relatively low-risk, high-reward. Here's why:

1) You've got a good chance of success. Steel Self storage has about an 8 percent failure rate, as opposed to other commercial real estate ventures, which have a failure rate between 53 and 63 percent. That's nearly six times as high.

2) You can pay your loan off quickly. On average, self storage steel buildings have about 80 percent occupancy. If that's the case, then even if you're paying off your land, materials, construction, and everything, you can usually get your entire loan paid back in about six years.

3) You don't have to hire the Seventh Fleet to run it. You'll be managing yourself and maybe one or two other people for the day-to-day upkeep of your self storage business. After years of working in giant buildings amongst thousands of other people, who doesn't want that kind of low maintenance?

4) You'll be entering a growing industry with demonstrated demand. Self storage has been the fastest-growing sector of the commercial real estate industry for the past 30 years. In 2006, gross revenues for primary self storage facilities were $22.6 billion - an average of $441,208 per facility.

Many boomers built a huge network of contacts over their years in the corporate world, which they can use in the post-retirement world to enhance their own businesses. And after spending so many years in the corporate world, many are ready for a chance to be their own boss while doing something that they love.

Growing right along with the number of baby boomer entrepreneurs is the self storage industry. It's been the fastest-growing sector of the United States commercial real estate industry for the past 30 years. In 2006, gross revenues for primary self storage facilities were $22.6 billion - an average of $441,208 per facility.

Any new business is risky, and those risks have to be accounted for before taking the plunge into entrepreneurship. However, self storage steel buildings have a better track record than other start-up commercial ventures.

According to an in-depth study by National Development Services Inc. of the performance of multi-family, office, retail and self storage developments in Texas, Oklahoma, New Mexico, Colorado and Louisiana, self storage steel buildings have a failure rate of about 8 percent, while other real estate ventures have a failure rate nearly six times that amount.

No business is a guarantee by any means, but with a failure rate of only 8 percent, self storage buildings are more secure than many other small business investments.

It's not a huge initial investment

Compared to other new businesses, you're also looking at a smaller initial investment with self storage steel buildings. If you consider an 80 percent occupancy rate, which is about average, then even including the purchase of the land, you could still have your loan paid off in about six years. That's considerably less than other small businesses.

Plus, self storage buildings don't require a huge staff to maintain upkeep. Most likely you'll just be managing yourself and a couple of other people. That way, the hiring process won't be a headache.

Self storage is not only a stable industry, but a steadily growing one, with demonstrated demand. Businesses require storage for surplus office supplies or equipment while moving. College students need storage when they go home for the summer. Military personnel need storage for their belongings while they're overseas. The possibilities are absolutely endless.

About Author

I am the President of American Steel Buildings, Inc. in Tulsa, Oklahoma. We specialize in steel self-storage buildings. Our success is dependent on taking care of our customers. Our site is www.gosteelgo.com

I was attending an introductory 3 hour seminar held by an Options trader back in 2005 with a friend who had never traded or invested in anything his whole life (with the exception of his superannuation fund which he did not manage). I was there for my friend who wanted to know a bit about trading and investing.

The seminar went well and you could tell this by the large number of people interacting; but also because my friend, a very risk averse person was also becoming keen to know more. But when the inevitable sales pitch came he sunk to the bottom of his chair.

"What's wrong?" I asked him with which he replied, "You've got to be joking he's asking fifteen hundred for this course? I don't think so; do you want to go halves, maybe I'll consider it?"

I smiled and thought for a bit; I already knew what I wanted to ask him, the problem was I wondered whether I should or not. Finally I succumbed.

"Can I ask you what your debt is for your university course (he was studying Information Technology)?" "Sure it's about $5000, but will be more like $7000 by the time I've finished". "Ok" I said, "does this come with a guarantee of a job, or even a money back guarantee should you decide after a while you don't want to do IT?"

"What?" and he gave me this most puzzling look.

"Well think about it. Becoming an IT professional is a great career if that's what you want to do, but in reality your income will always be capped, and the only way to uncap it is to become a business owner which is a whole new career in itself. Secondly, there's no guarantee you'll even get a job once you've completed it. I'm not saying that $7000 is too much but it's a fair whack."

"Compare this to a course where the owner is a millionaire and practices his craft at the same time. I'm not saying you're going to become a millionaire using his course or that you'll even like it but he's asking less, for information that helped him become financially free. As far as I'm concerned there is no comparison."

My friend thought for a while and realized he had no answer to what I had said however I refused his proposal to go halves. I had no intention of buying the course; I was only there for my friend. As it turns out he never did end up buying it.

As a trader though I'm not going to defend those who sell trading courses anymore like I did back then as my outlook has changed; but that does not mean I advocate the university education system and the debt scheme attached to it either. Nothing has changed there for me.

What has changed though is my realization that what's important in trading and investing tuition is sorely lacking. A system with rules and indicators is simply not enough. For one, it is usually built by one or two people who share a common goal. All those who try to emulate their system have completely different goals, resources, emotions, strengths and weaknesses and the list goes on.

This is why if you've ever bought into someone else's trading course that comes with some sort of support or forum you'll notice the majority can never get to their desired level. They either completely fail or fluctuate up and down along with their emotions. Those that do make it work have managed to do so because they had a very similar set of circumstances, resources, strengths and maybe even goals. This is why so few can make someone else's method work.

I even witnessed a famous trader who sells his trading workshop for many thousands of dollars admit that only around 3 or 4 of his 15 that he lets in gets it (meaning the rest waste their time and money and are unable to make it work)! That is ludicrous in my view to know this fact, and still take their money. The thing is this teacher is obviously unaware and unable to teach his students the ingredients that made him a success. He just teaches them his system.

I even drilled a trader hosting a Webinar for his latest tuition. I kept asking him if he had several methods of trading and flexibility that enabled someone to adopt a method to suit their resources, personality and strengths; and also if he helped the trader to uncover their strengths. He could not answer me.

1. Don’t let your emotions cloud your business judgement If you are buying for investment purposes particularly, try not to become emotionally involved, remember this is a business transaction and unless you plan to stay and use your overseas property choose an area with strong capital appreciation and just because you wouldn’t live there yourself doesn’t mean it’s not a good investment. Markets that are rising fast now are Cyprus, Macau and parts of the UK and according to the Royal Institute of Chartered Surveyors review in 2005 the top 2 markets with the highest capital appreciation in 2005 were Estonia and Denmark.

2. Research and understand your rental market Be careful if purchasing in large blocks of apartments exclusively sold to investors, which can often complete together bringing large supply into the market at one time. Twenty or thirty apartments can easily find tenants, but prepare to wait longer if you’re the owner of an apartment in a block where hundreds of apartments become available to rent at the same time.

3. Remember transaction costs seriously reduce your returns Remember transaction costs reduce your overall yield. For example in Germany apart from transfer taxes (stamp duty) the buyer pays the estate agency fees, not the vendor. Transaction costs also increase in countries where the loan to value rates are low, the more cash you have to put into a deal the less the return on investment. Check all your transaction costs before buying, ask your solicitor for a full quote in writing outlining all taxes and fees, but remember to ask for it in writing before you commit.

4. When is a discount not a discount? It is easy to get discounts on higher value properties, over priced properties and over supplied destinations. Remember list prices are developer driven and they always tend to price at the top of the range. Just because you receive a 10% discount doesn’t mean you secured a bargain. You are better off buying the right property at list price provided there is good local sales and rental demand. It is more important to buy in areas where there is a good resale market and a strong rental market rather than an area where developers are offering discounts. Currently Bulgaria and Poland have weak resale markets. Spain in particular is seriously oversupplied especially in the Costa Del Sol region.

5. Achieving short term capital appreciation There is limited capital appreciated prospects if you purchase a two bedroom apartment in an area with hundreds or thousands more two bedroom apartments either completed or in the planning stage. If you wish to beat the market you need to establish which segment within a given market has the least supply and the most sales demand both by local and foreign buyers.

6. Negotiating skills Negotiating skills are your most underestimated asset, always haggle and you will be surprised how much discount you can get especially if you’re a cash buyer! Estate agents often over estimate values and many often test the market with high unrealistic prices. Estate agents have a built in habit of implying there is more actual demand than there really is. The Irish are seen as a “rich gravy train” and have a strong reputation for being cash rich buyers and some unscrupulous estate agents may take advantage of this. Remember to play a long game, make a lower offer and stick to your guns. The best negotiation strategy is to be able to highlight comparable properties selling in the area, basically if you can show the agent that a similar property in the same area is selling for less, and then it’s easier to justify the price you are offering.

7. Rental schemes Beware of guaranteed rental schemes, as they are just a sales tool cash flow exercise. Rental guarantees are sometimes offered in areas where there is an over supply of rental properties. Ask the developer to give you the value of the rental yield by way of a discount, this way you won’t be taxed on the rental income and at least you will know that you have your rental guarantee in the bank, as rental guarantees are often provided by separate shelf companies with no financial strength.

8. Dealing with estate agents Buy through a local Irish agent, if a problem occurs it will be easier to resolve through a local Irish based agent, dealing with problems in a country with a completely different culture and law may be difficult if you are dealing with the developer direct

9. Decide on your strategy There is no ideal strategy in terms of trying to find the right way to purchase investment property. The strategy that will work best is a strategy based on your long-term goals in line with your financial position. If you are a first time investor with limited resources be careful to choose a property with good rental income, otherwise you will end up sending large monthly top ups to your mortgage provider.

Author

Henry Davis is an Irish based Property Investor developing in Manchester and Liverpool www.internationalproperty.ie or +353 87 2344000

by Andy Andersohn

Don’t Neglect After Tax Savings for Retirement

We are almost all familiar with retirement savings and investment programs that are pre-tax like 401k’s, 403b’s and IRA’s. These programs give you a tax break today, since the amounts you contribute today is on a before tax basis. This means your taxable income is reduced for the year by the amount of the contribution, subject to the statutory annual limits. Income earned in these “before-tax” accounts is not taxed until normally withdrawn (after age 59 ½) and then it is taxed at the rate you are subject to in the year of withdrawal.

Retirement plans that are classified as after tax work in the opposite way of their “before-tax” brethren. They are called Roth IRA’s and are funded with money after you have paid the income tax on the income in the years that you make your contribution. This “after-tax” contribution does not help you pay fewer taxes in the year you make the contribution. However, within the account the income is compounded year after year and you pay no tax on the yearly income or when you begin the normal withdrawal at age 59 ½.

This is a significant tax benefit during your retirement. Further, there is no mandatory withdrawal beginning at age 70 ½ as with the “before-tax” plans. The “after-tax” dollars you contribute to your Roth IRA are not taxed when you make a proper withdrawal. Importantly, all the income you’ve earned in the account is not taxed when it is withdrawn. This can be a significant amount.

Let’s just look at the actual benefit in just one years “after tax” contribution. Assume at age 30 you invest $4000 (the maximum for your age in 2007, if over age 50 you can contribute $5000 in 2007 as a “catch-up” provision.) and you invest it in two above average mutual funds. Their earnings over the 35 years lets assume are 8% compounded monthly. The total in you account at age 65 would be about $65,170 or the original $4000 would have grown by $61,170. You can let it grow or just take out the earnings of about $5000 a year; the principal would stay about the same and regardless of your other income you would pay no income tax on the $5000 or whatever amount you choose to withdraw.

And remember this is only one year of contributions into your “after-tax” account. For many individuals who start early enough, and make regular contributions into their Roth IRA, the amount in their account at age 65 can be staggering. You might make a Google search for “compound interest calculator” and find an online calculator then plug in numbers consistent with your age, years to retirement, assumed return on your money and possible amount of contribution each year. So, contributing to an after tax savings account today helps reduce the amount of taxes you’ll pay during your retirement. This is to you benefit because most of us plan to live on a smaller income during our retirement years, however start early enough and you’ll have greater income when retired than when working. This greatly improves your quality of life during retirement and opens up a myriad of options during your retirement years.

For a relatively small monthly after tax contribution each during your working years, you can be accumulating a large tax free account to use during your retirement years. In the end, you won’t pay income taxes earned amount in your “after-tax” account. This is in contrast to traditional IRAs and 401ks, where you’re really just delaying the payment of taxes since you eventually will pay taxes on every bit of money in these accounts, even the income that has accrued.

Many financial experts recommend that you plan for your retirement using a combination of before tax accounts like 401ks or 403bs along with after tax savings accounts or Roth IRAs. Using this combination helps you to save for your retirement in a way that helps you avoid some taxes both today and during your retirement years. This combination is one of the best ways to save taxes now and have a financially secure future.

About the Author

Andy Andersohn is a small business owner and long time tax preparer. Learn more valuable Tax Planning Resources for business owners and individuals. Get your FREE 11 page Tax Saving Guide. At his Tax Help Plus site discover a wealth of more current tax help.

by Kelly P Kramer

I worked as a financial planner for awhile in my life, before deciding I enjoyed running a business more. As a financial planner I was always asked by people 'what is the best RRSP rate? Everybody always assumed that someone out there new what the best meant or was, but was keeping it from them. My response was always the purpose of investing in RRSP's is to increase your wealth over time and to not worry about what is the best. The problem is that from year to year different funds perform at different levels. Here is the real secret to investing in RRSP's

The first thing you need to do is decide if this is the vehicle for you. What about other forms of investing for your retirement? Such as real estate, stocks, bonds, business, or build some form of long term passive income? Do any of these wet your appetite? If so maybe you should do some research on those forms of investing, if not then keep doing what you are doing, or maybe start to do more than one form of savings for your retirement. Ever hear of multiple streams of income? Now onto the secret, the plan works best over a long period of time and it is called compound interest.

Over time if you consistently save and your money is in a safe investment you will have enough for retirement. So stop being so concerned with the best RRSP rate and take that extra energy and build another form of income. For instance a website that generates just $1000 per year is the same as having $20,000 in your RRSP at 5% return. Not bad, how about a revenue property that brings in $12,000 per year? That is the same as an RRSP of $120,000 at 10% still pretty good.

I am not saying to not invest in yours, but why not do more than just that? Beats trying to chase the best rate and not finding it, doesn't it? Ok, You really want to know what the best rate is? In my years I have seen many different rates. Some low with the banks at 2%, some are high risk with foreign investment at 60%. Are either of these consistent? Not normally. Is there ways to consistently get a high rate of return? I can only answer no! Any other answer would be misleading. Good Luck and happy investing.

Author

Get your free report and/or enter into our FREE contest at http://www.edmontons-business-directory.com/RRSP_Free_Report.html Kelly P Kramer buys and sells real estate, helping people get good returns on their RRSP's.

If you are new to investing perhaps you are not familiar with bonds. Before you get started, you need to understand some of the risks associated with bond investing. Most people assume that all interest-bearing securities are completely risk free, but this is not the case. Even if you know a lot about investing, you may not be aware of some of the risk characteristics associated with bonds.

The most important thing to take into account is the interest rate. The Federal Reserve (also known as the Fed) meets every 6-8 weeks to evaluate the health of the economy. At each meeting, the Fed renders a decision regarding interest rates.

If inflation is rising, the Fed will need to raise interest rates to tighten the money supply. If inflation is moderate or contained, the Fed will likely leave rates unchanged. However, if the economy is slowing down and there is very little inflation or maybe even deflation, then the Fed might decide to reduce interest rates to create a stimulus for economic growth.

The reason why you need to consider present and future interest rate levels is because as interest rates increase, bond prices go down, and vice versa. If you are able to hold your bond until maturity, then interest rate movements do not really matter, because you will redeem the principal upon redemption. But often, investors have to cash out their bonds well before the maturity date. If interest rates have moved up since you purchased the bond, and you sell it prior to maturity, then the bond will be worth less than your initial investment.

You should also be aware of the claim status of the bond you are buying. Claim status refers to your ability to liquidate your investment in the event the bond issuer goes bankrupt. If you are buying a government bond, such as a Treasury Bill, claim status is irrelevant, because the odds of the Federal Government going bankrupt are slim and none.

If you are buying a corporate bond, however, there is always a chance that the issuer could go out of business. In the event of liquidation, bondholders are given priority over stockholders. However, there are often different classes of bondholders. Senior note holders can often claim against certain kinds of physical collateral in the event of bankruptcy, such as equipment (computers, machines, etc.). Regular bondholders can not always claim against physically collateral, and are next in line after the senior note holders.

Next, you should always check the three main features of the bond you are buying; the coupon rate, the maturity date, and the call provisions. The coupon rate is the interest rate. Most bonds pay an interest rate semiannually or annually. The maturity date is the date that the bond will be redeemed by the issuer; simply put, the maturity date is when the company must pay back to you the principal you loaned to them. The call provisions are the rights of the issuer to buy back your bond prior to maturity. Some bonds are non-callable, while others are callable, meaning that the company can buy your bond back before maturity, usually at a higher price than what you paid.

Finally, you should also understand that if economic conditions become more favorable after you a buy a bond, and interest rates start to go down again, the issuer will likely issue a lot more bonds to take advantage of the low interest rates, and will use the proceeds to try to buy back any callable bonds it issued previously. So, when interest rates go down, there is an increasing likelihood that your bond will be redeemed prior to maturity, if in fact the bond is callable.

by Dudley Baker

Frequently I read comments from other analysts regarding the difficulties of trading, i.e. buying, the Canadian mining stocks. They usually suggest investors seek out a broker that specializes in these stocks and while that is not bad advice, it is not necessary to do so.

Allow me to first provide some insight on the mining sector and in particular the investment conferences being held frequently in both Canada and the United States.

The investment conferences in Canada are drawing thousands of participants. For example, last week I attended the conference in Vancouver, CA and there must have been at least 8,000 or so investors in attendance and standing room only for all of the speakers. As this was my first attendance at a Canadian event, I was in awe at the excitement and energy of those in attendance. Another conference to be held in Toronto, CA. in March is anticipating 12,000 - 15,000 participants. The resource conferences in the United States, i.e., Las Vegas, San Francisco and New York, are more on the order of 1,000 participants, begging the question;

Why the great disparity?

Two reasons in my opinion; lack of education in the United States on the natural resource sector and the perceived difficulty of investing in the Canadian stocks and/or warrants by U.S. investors.

Perhaps, U.S. investors are asking the question; why should I get excited about the Canadian stocks or warrants if I cannot buy them? Rather, most do not know how to buy them.

Also we know the average U.S. investor is still focused on the Dow, S&P and Nasdaq stocks and has little or no knowledge (as yet) of the great bull market taking place in the Canadian mining stocks and warrants.

With this background let me proceed to explain 'exactly' how to trade the mining stocks or warrants depending on your country of residence:

Canadians:

The trading of the mining stocks and warrants will be very easy for you. The vast majority of mining companies are based in Canada and trade on the Toronto Exchange (TSX) or the TSX Venture Exchange. The symbols for the shares and warrants can be easily obtained and orders executed. The Canadians through their local newspapers have access to an incredible amount of news on the natural resource sector as this is where most of the companies are headquartered and also where a substantial portion of the world's resources are located.

Americans:

If you want to be included in this long-term bull market in the natural resource sector, it is imperative that you understand how to invest and have your orders executed.

For U.S. citizens do not be discouraged if your broker has previously told you they cannot execute your orders on the Canadian mining shares or warrants. In a few minutes of reading you will be an expert on this subject and will probably know more than your broker and I assure you they will execute your orders.

As a U.S. citizen, I have purchased hundred's of the Canadian mining companies and warrants using my U.S. discount broker in the last few years and I will share with you 'exactly' how to place your orders, or if necessary, 'exactly' what to tell your broker.

For those specific mining shares you are following, I suggest you track your portfolio using the TSX or Yahoo Finance using the Canadian symbols and thus follow the Canadian prices, including the bid and ask price for each security.

Symbols for mining shares:

In order to place orders you need a symbol, right? Virtually all of the Canadian mining companies have been assigned a five (5) alpha symbol by the OTC market to facilitate these trades in the United States. The last character is an 'F" representing a foreign market. You will find the symbol (s) in numerous locations:

1. Your brokerage firm - symbol search

2. Yahoo Finance - symbol search

3. Nasdaq - symbol search

With these OTC symbols you can now enter your order online. Cautionary reminder: you may see a price for the most recent trade, but this is probably not the current price. Remember, the primary market for the Canadian stocks is on the TSX not in the U.S. The price you see using the OTC symbol will be the last trade (in the U.S.) which may be days, weeks or months ago. In other words, the stock could be actively trading on the TSX in Canada but not in the U.S. due to a current lack of knowledge and interest by U.S. investors as pointed out above. Do not be discouraged. Ascertain the current price of the shares in Canadian dollars, decide how much you want to pay for the shares (in U.S. Dollars) and enter your LIMIT ORDERS.

Some investors will no doubt give up saying, 'this is too difficult'. Let me remind you that this bull market is taking place and will continue with or without you. The choice is yours whether to participate and it is essential for you to understand how to get quotes and place your orders.

Symbols for Warrants:

Some of the warrants also have been assigned a 5 alpha symbol by the OTC market but most have not thus requiring a little more work. In these cases, if there is a warrant you wish to purchase you will need the cusip number (a 9 digit legal identification) for this warrant. The cusip number can be obtained from the company and is but one of the many particulars on warrants which we furnish to our subscribers.

If there is an existing OTC symbol you may enter the order for the warrants online, otherwise, you will need to call your broker and give them the cusip number for the warrant.

Example:

Let's say you want to purchase 5,000 warrants on ABC Mining Company, the cusip number is 123456789, the warrants expire on January 5, 2010 and you want to limit the price you pay in U.S. Dollars to $.50. Give your broker the specific instructions:

" I want to buy 5,000 ABC Mining Company warrants, cusip number - 123456789, expiring on January 5, 2010 at a LIMIT PRICE of $.50 U.S. dollars". Your broker will read the order back to you for confirmation. Congratulations, you have just placed your first order for warrants.

Australian & U.K. Citizens:

Depending upon your brokerage firms, I suggest you can purchase the Canadian mining shares and warrants using the procedures discussed above for U.S. Citizens.

Concluding thoughts:

Commissions:

The commissions will vary depending on your brokerage firm and whether you can place your orders online or whether you must call your broker to enter the trade. While the amount of the commission should be considered, they are to me just an expense, overhead, of doing business. The potential gains to be derived from the mining shares and warrants over the coming months and years should over shadow your concern over commissions, in my opinion.

If your broker has previously refused your trades in the Canadian mining shares or warrants, I suggest you forward this article to them as it will be good for their business and rewarding for you with your new found investments.

If you would like additional information on 'how to trade' and also on warrants, we encourage you to visit our website. http://www.preciousmetalswarrants.com

About the Author

Dudley Baker is the owner/editor of Precious Metals Warrants, http://www.preciousmetalswarrants.com a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much, much

By: Steve Greenfield

Since its creation in 2002, the “euro” ----a Frankenstein creation that replaced the former currencies of 12 European countries like France, Germany and Italy--- has beaten the socks off the American greenback. Back then, the euro limped out of the gate at a parity with the greenback. It quickly dropped to around 86 cents for every dollar.

That was then. As of November 11, 2007, Veteran’s Day here in the U.S., the euro is worth 1.46 American dollars. A single euro now buys 46% more than its American peer.

We’ve scratched our heads in this column about the decline of the dollar. What’s happening now is unprecedented.

The dollar has fallen to a 26-year low against the British pound. It has fallen to a 33-year low against the Canadian dollar.

What has happened to put the dollar in a free fall / Throughout the last century, every American President and every American Treasury Secretary has repeated the mantra that “a strong dollar is American policy”. As recently as October 10, two weeks before the G-7 Summit, both the current President and the current Treasury Secretary recited the mantra by heart.

“ I feel very strongly that a strong dollar is in our nation’s interest,” stated Treasury Secretary Henry Paulson, formerly Chairman of Goldman Sachs.

What’s missing is the “and therefore”. In the past, severe drops in dollar values have brought strong corrective actions, a buy back of the dollar in effect to prop up the value. No such cavalry charge is coming in the current climate. In fact, some have suggested that the current U.S. policy is a smug contentment that the decline of the dollar has boosted US exports by about 15%, since our exports are now cheaper for foreigners.

Which leaves all of us to wonder aloud—what happens if the dollar’s free fall continues? Is there any safety net down there?

Don’t bet on it. Secretary Paulson ha started adding a caveat to that ol’ strong-dollar mantra. “and we believe that currency values should be set in a competitive marketplace based on underlying economic fundamentals.”

Those underlying fundamentals are weak now in the U.S. A mortgage market meltdown, coupled with an economy strained by the $576 billion cost of war have all but tapped out the U.S. economy for the time being. We are now in hock. We are the largest debtor nation on earth.

And what happens when we take out some of our retirement in the form of those weakened dollars? A hidden costs of letting the dollar sink is that the buying power of those retirement savings ---once they are converted to dollars –is getting pretty pitiful. Worsening the situation is that, unlike many citizens of foreign countries, Americans who desire to keep their cash in euros find very few US banks offering that flexibility. Some German banks (Deutsche Bank) and on-line banks (everbank) have begun offering accounts to Americans denominated in other currencies.

Brother, can you spare a euro?

See “The Incredible Shrinking Dollar”, www.collectivewizdom.com

Steve Greenfield is a Featured Columnist to http://www.collectivewizdom.com, a reader-created online newspaper featuring articles on health, finance and relationships.

How to tell when you are Guilty of over trading.

The essential feature of overtrading is not the number of actual trades but your reasons and motivation behind each trade.

Confused? I shall explain further.

Overtrading becomes more apparent when in a “Bull Market” as the share trader is frightened of missing out or will rush into every reasonable trading opportunity that shows itself or that they can afford.

These trades involved are no longer based on money management or any risk control.
Here are four main questions that you can ask yourself if you think you are overtrading.

1. Is each trade based on sound research and financial analysis?

2. Is each trade part of an overall management plan that is based on matching the trade with the risk involved?

3. Does each trade have clear financial objectives which determine your exit position?

4. Does each trade only use capital allocated from your previous trades?

If the answer is yes then the trade is being made for the right reasons and the right criteria.

If two or more questions are answered in the negative, then this suggests that your are overtrading and your emotions are in charge.

Can You Guarantee Success Every Time You Trade?

The answer is a resounding NO! But you can maximize your chances of success.

Firstly have a look in the mirror. It will reflect your worst trading enemy, ourselves. But most of us will blame other circumstances for our failure in the market. When in reality it is our in ability to take losses over trading.

What Steps Can We Take to Complete a Successful Trade?

1. Identify trading opportunities.

How do you do this? Usually it is done by three ways. You have the option of using a database scan using a software program or by using eyeball verification of bar charts and using indication verification using the Macd, Rsi or your own favorite indicators.

2. Analysis of opportunities.

A. Check for bias.

B. Assess stop loss conditions.

C. Assess profit targets.

D. Rank by time / risk.

3. Trade Management of our Portfolios.

A. Watch the depth of the market on your entry.
B. Place and execute the order.
C. Enter details in order log. Print out chart with summary trading plan.

D. With your open positions (trades) each day you verify the original trading conditions arc intact.

E. Enter details into trading record and file contract notes.

Bulls and bears.

Firstly the bull is a buyer and the bear is “always” a seller.

The bull buys because he wants to make money, {don’t we all?}.

The bear is more complicated and can sell for different reasons. This can be just to lock in a profit because he thinks the share price is about to go down

The most fearful of the bears sets the lowest price for the day. This is done by offering to sell his shares at this level.

In a “bull market” novice traders rush into every reasonable opportunity they can afford.
These trades are not based on good management or risk control.

Please try not to get caught up in this market hype. If you start to chase prices upwards there is a very good chance you will pay too much for them, only to watch the share price start to recede when the buying panic is over.

Sounds familiar? I know this one by bitter experience. The share price went down and still I held on hoping they would start to go upwards again. I went past my stop loss level {forgot to put one on in the panic to buy shares} Still telling myself it would retrace. It did but 2 months later so feeling very thankful I sold making a 7 1/2% profit.

Those shares today 2 years on are now worth 200% more. I was too frightened to buy back in again in case the same thing happened again.

That was a hard lesson to learn. Plus with that money tied up $2,000 worth, I missed out on a few bargains in those two months which would have made me a minimum of $650 profit more than if I had got out at my stop loss of 10% {{$200}.

By Paul Bryant

Day trading technical indicators are the representation of mathematical formulae a day trader can use to decide when to do the trading. Forex day trading involves buying and selling of various currencies with the goal of making a profit from the difference between the buying price and the selling price within a day.

The day traders employ different strategies like short term scalping where positions are only held for a few seconds or minutes or longer term swing and position trading, when they hold the position for the whole trading day. For their trades they follow one or more day trading technical indicators or develop a strategy based on a combination of many such indicators.

A day trading technical indicator is a series of data points that can be derived by applying a formula to the price data. Price data includes any combination of the open, high, low, or close over a period of time.

Some technical indicators may use only the closing prices while others incorporate volume and open interest into their formulas. The price data is entered into the formula and a data point is produced, which in turn creates the indicator.

The list of day trading technical indicators is practically endless. There are Absolute Breadth Index, Bollinger Bands, Bull/Bear Ratio, Candlestick Charts, indicators based on Dow Theory or Elliot Wave Theory, Envelopes, Fibonacci Levels, MACD, Moving Averages, TRIX, Weighted Close, and many more. All these can be used as a day trading technical indicators with slight or no modifications.

For example, the absolute breadth index or ABI is a market momentum indicator which shows the activity, volatility, and change taking place in the market without paying attention to the direction of the prices. High readings implicate active markets. As a day trading technical indicator, it can predict future direction if combined with other indicators.

Bollinger Bands on the other hand are a kind of moving average envelope. It exist at standard deviation levels above and below the moving average and generally stay within the upper and lower bands. As a day trading technical indicators, it predicts the future market movements. Fibonacci numbers with 4 theories - arcs, fans, retracements, and time zones, which highlight reversals in trends.

Day trading technical indicators has three functions–to alert, to confirm and to predict. So a trader can never miss a trading opportunity or run into loss if he or she can use the indicators judiciously.

The best approach will be to develop a strategy based on more than one indicator. Learning how to use these indicators is more of an art than a science. Through careful study and analysis, a day trading technical indicator can be developed over time, but they can never be full proof.

About the author:
To find out more about trading Forex more accurately visit Day Trading Technical Indicators

Building green is becoming more and more important as our resources dwindle, and we become more aware of the sensitivities to toxins that many people have. With the price of oil and natural gas rising, saving energy is a big concern. The use of green construction in home and business developments has started really taking off, and many people are interested in making their developments environmentally friendly. One survey found that at least fifty percent of all builders should be producing at least some green developments by the year 2010. However, once you've decided to build green, it can be difficult to know where to start. If you're an investor or developer who's interested in learning about the process of green building, here are a few basics to help you get going.

Currently, the building industry is centered on those practices which are least expensive, and easiest to implement. Unfortunately many of these practices aren't all that green. From the use of adhesives and materials that can off-gas, to the creation of structures that waste heat and water, a conventional building makes a big impact on the world around us. You can make buildings greener in a number of different ways, including using natural and non-toxic materials, improving air quality, reducing waste of energy and water, employing renewable energy sources, and reusing materials whenever possible.

For those developing a property, or investing in a development, building green can be especially difficult. Individuals who are building on a small scale can more easily exercise control and find green solutions. Larger developments require advance planning, and there isn't currently a standard process for green building. However, working with experienced professionals can help a lot. For instance, it's often a good idea to work with an energy consultant, who can help you decide how to implement designs that will allow your buildings to conserve energy more effectively. Conservation of energy is one of the biggest concerns related to green building, since most buildings do not make efficient use of power. Correct building orientation to make use of passive solar design, efficient heating and cooling systems, and high grade insulation are just a few of the options you can put in place to make your developments more energy efficient.

You should also try to work with contractors who have prior experience with green building. This will help head off possible problems later on. A contractor who has built green structures in the past will have better familiarity with the methods and materials that are used. They'll also be more willing to work with you, even if the process required to make the building more environmentally friendly means more work on their end.

Since building with environmentally friendly and recyclable materials can be more expensive than conventional building, developers should also make sure they do their research in advance. Look at the cost of materials available, and design your budget appropriately. Be sure to factor in the increase in sale price for green building, and the improvements in energy efficiency when you decide what materials are most cost effective. Materials that are more expensive now will bring savings down the road. Even if you're developing the property for resale, buyers will be aware of this, and may be willing to offer a higher price.

Development often requires the removal of existing structures. Standard practice is to demolish these structures, with the rubble usually being taken to the local landfill. To make the process of getting rid of unwanted structures more environmentally friendly, focus on deconstruction rather than demolition. Deconstruction takes longer, but allows the materials to be reused or resold, and saves on tipping fees. If the structures in question are older, they may have been built from materials which are no longer available, like large dimension old-growth hardwood, which can be reused in other buildings and is superior to softwood dimensional lumber.

Another place where many modern buildings create waste is water use. Very few structures are designed to make efficient use of available water supplies. As more sources of water become polluted, and aquifiers are emptied, water conservation becomes a greater concern. Plan on using features that save water in your new development. These can include installation of ultra-low flow toilets and showers, faucet aerators and high-efficiency showerheads, efficient heating and cooling systems, and use of air-cooled equipment instead of water-cooled. In addition, it may be wise to designate a water efficiency coordinator for large projects.

The nationally accepted benchmark for green buildings is the LEED (Leadership in Energy and Environmental Design) Standard. LEED certification provides independent, third party verification that your building project is an environmentally responsible one. Even if you do not choose to get this certification, being familiar with LEED standards can help you make the right choices when building green.

While getting started in green building can be intimidating at first, familiarity with standards and talking to experts in the field can make the process a lot easier. Energy and water conservation are two of the biggest concerns, with use of recycled or recyclable, non-toxic materials, and reduction of landfill use following. With a sound plan and the correct priorities, making your development a green one doesn't have to be hard. Green developments are turning up everywhere, from water-saving condominiums built of recyclable materials where decaying industrial buildings used to sit, to schools and businesses designed to make the best use of energy while providing good air quality. Slowly, green building is becoming mainstream, so now's a great time to get started.


About the Author

Anthony Seruga and Yolly Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.

Putting your money on companies with big market capitalizations is often touted as one of the safer ways to invest in stocks. After all, these blue chips and mega cap companies are generally stable, secure, and are well-known industry leaders. They are traded on major exchanges such as Dow Jones and Nasdaq and are widely covered by the media. Thus, investors can easily get their hands on a wealth of corporate information about these companies. Clearly, playing with the big boys in the stock investment arena has its perks.

For the stout-hearted and adventurous investor though who can handle much higher risks, micro cap companies are worth looking into. Micro caps, also known as penny stocks, have market capitalizations of $50 million to $300 million although some companies can have as low as $6 million in tangible assets. They often trade for less than $5 per share but this range fluctuates depending on market performance. Penny stocks could outperform large and small cap stocks by as much as three percent. Because of their low stock prices, these stocks are quite attractive to retail and novice investors.

Micro cap stocks are traded on the Over-the-Counter Bulletin Board. While companies listed in the major exchanges need to meet minimum requirements such as net assets and number of shareholders, penny stocks are not subjected to any listing standards. The Securities and Exchange Commission requires micro cap companies to file financial reports except for those with less than $10 million in assets. These are helpful sources of information for investors although the accuracy and timeliness of the reports could at times be disputed.

Micro cap stocks are generally not covered by mainstream media and analysts which makes it difficult to obtain information about these companies. Investors must then do their own research. Relevant factors to look into are the 52-week high/low trading range, the price/earnings multiple, and the net profit and cash flow. Note also if the company files its financial statements on time and on a regular basis.

Most companies in the micro cap range aren't raking in major earnings yet and may take a long while to do so. The key is to study a company's business model and to be aware of any potentially marketable product or technological innovation that it plans to launch into the market.

Investing in micro caps requires a lot of effort in research and patience in waiting for the company to develop. Penny stocks have relatively low liquidity and as such, cannot be sold quickly to minimize losses should things go wrong. A lot of micro cap companies also tend to have short life spans and could fold up anytime.

The market of penny stocks is also teeming with fraudsters who illegally profit from unsuspecting investors. Unscrupulous brokers would buy stocks from a micro cap company at very low prices and re-sell them with an outrageous mark-up. Some micro cap promoters also create hype about a certain company to start a buying frenzy and increase the stock price. The overvalued stocks would eventually plunge back to its penny price once the hype is over and consequently wipe out the investors' money.

About the author:
Kristien Wilkinson is an online writer and contributor to http://www.tradingstocks.com

by B.M. Davis

As new traders begin to trade the markets they quite often find there is an expensive learning curve to the financial markets. The trader who has decided on technical analysis as the method of choice will soon find it's not as easy as all of the books and websites make it sound. The single biggest reason is that trading in itself is a psychological game and when putting real money on the line, many new traders panic and become the losers in the game. Those who are experienced traders realize that's what makes technical analysis in itself work. Spotting patterns caused by collective fear or greed make up the basis of technical analysis itself. New traders need to overcome the emotions of fear and greed if they are to become successful traders before going broke.

Obviously, the new trader has to learn to overcome their emotions. It's easier said than done and most honest experienced traders will probably admit that it's something they struggle with even now. Here are some ways you can learn to keep your emotions in check:

1. Perfect a trading strategy and stick with it â€" Plan your trade and trade your plan. Don't start listening to stock trading gurus and their stock picks. Stay away from most stock message boards (at least until you gain confidence in yourself). The most successful traders learn to think for themselves and take personal responsibility for their trading. When you stop following your plan and start breaking your own rules you're probably trading on emotion.

2. Don't become emotionally attached to your trades â€" If you're watching the price of your stock like a hawk and become elated when the price goes up and depressed when the price goes down, you're trading on emotion. Remember, your trading strategy should be so ingrained that you trade like a robot. 3. Take adequate position sizes â€" Don't take a position size larger than ten percent of your account value. Large position sizes are great if the price goes up but never forget that a losing trade of too large a size can decimate you're trading account. This also will help keep fear in check. 4. Remember, it's ok to take a loss â€" If you have a plan to cut losses, taking a loss is just part of trading. Even pro's experience losses. The difference is they have a plan for managing them.

Trading is a great way for anyone to generate income online and I highly recommend everyone invest in one way or another. But remember, keep you're emotions in check and learn all you can about the craft of trading. The more knowledge you gain, the more confident you will become. Keep it simple at first. Expand your trading strategy as your knowledge grows, take small steps and soon you will be able to consider yourself a successful trader.

About the Author

B.M. Davis is an active trader and the publisher of Market Master Trading Course. For more information on stock trading, technical analysis or candlestick charting, please visit http://www.market-masters.com

by Al Hill

What are Candlestick Stars? So far, in Part 1, we have covered the construction of a candlestick chart and also discussed a few common reversal patterns. I want to continue building your knowledge on these candlestick patterns. With this article, I will focus on another group of very powerful signals, the candlestick stars. Stars have small real bodies which gap away from a large real body that precedes it. The key rule to a star is that its' real body does not overlap the previous candles real body. There are several variations of the star pattern which we will discuss in this part; they are the morning star, evening star, doji star, and shooting star. Psychology of the Candlestick Star Pattern As a star has a small real body, it represents indecision by both the bulls and the bears. While the larger trend may be strongly up or strongly down, the presence of the star indicates that the prevailing direction may have come under profit taking or that the other side has actually taken control. Remember, the previous bar should be a strong bar in the direction of the trend which indicates that the bulls (in an up trending market) or the bears (in a down trending market) are in control. This strength in direction is what makes the appearance of the star that much more important as the conviction has dissipated.

Candlestick Star Variations Morning Star

The morning star candle is a bottom reversal signal that comes after an extended downtrend. This pattern is a three candle reversal setup. The first two bars are the typical star setup discussed above. The major difference with this pattern is the third candle in the formation. It is a very strong green candle, which does not have to be a gap, which closes at least half way into the first candle. The further it eats in the first bar, the more bullish the formation. Outside of morning star showing itself, look for other indications that this pattern is for real. For example, you want to see high volume in the third candle, indicating strength. I have noticed that the morning star works very well when it occurs at previous support levels. The adds that extra layer of confidence to my trading when I look at this way. On the other side of the coin, if you buy a stock that prints the morning star, be prepared for some sort of pullback. It is not uncommon for that to happen nearly 50% of the time. What we want to see however, is that the lowest low of the morning star is not violated. If there is a violation of the lows, then the morning star is negated.

Lets take a look at the morning star candlestick at work on a live trading example.

This is a beautiful morning star setup. Let's consider why. First of all, the morning star came it at previous support near the 60.37 level. The star candle came in the form of a hammer. Refer back to Part 1 to learn more about the hammer. There was high volume that came along with the hammer and this was an even bigger sign that this level would hold as support. The following day, the stock accelerated with a gap higher and closed well into the top half of the first bar. As I said earlier, the presence of this pattern does not indicate an immediate rally. As you can see, the gap created from the second to third bar was back filled. Smaller gaps, such as this one, tend to get filled in the short term more times than not. Even if one would have waited for the high of the third candle in morning star to be broken above, five points could have been made in a short amount of time.

Evening Star The evening star candlestick is the bearish version of the morning star. It is a top reversal pattern that occurs after a sustained up trend. The evening star also a three candle pattern with the first candle being a strongly bullish candle with good price spread. The second candle is the star while the third is red real body that closes well into the first candle. Again, as with the bullish morning star, the third candle in the evening star does not have to be in the form of a gap. Here are a couple of factors that increase the chances of this pattern succeeding:

1) The real bodies of all 3 candles do not overlap on each other

2) The third candle closes well into the first one; preferably regaining 75% of the candle

3) Volume should lighten up on the first candle and increase on the third.

Just as the lows of the morning star pattern provide support against any decline, the highs of the evening star candle trio serve as resistance to any further upside movement.

Doji Stars When a doji represents the star within the morning star and evening star, the formations are known as the morning doji star and evening doji star. A doji is a candle that lacks a real body, meaning the open and close of the bar are the same or have a very small difference. It has a strong significance after substantial advances or declines. The lack of direction that the doji illustrates can offer a potent reversal signal, especially if it is followed by a candle in the anticipated direction. Therefore, when a doji represents the star of the morning and evening star pattern, you need to take notice.

An extremely powerful version of the doji star is known as the "abandoned baby top" or "abandoned baby bottom". This pattern is the equivalent to what some of you have heard of through using bar charts, the "island bottom". The abandoned baby has a doji as the second candle with a gap on both sides. Notice, the Evening Doji star image above is an abandoned baby top, while the morning doji star is not.

If you think about the psychology of this setup, the first gap came in an almost exhaustive fashion. The stock was already in a strong uptrend or downtrend and then it made a gap which closed right near its open. This was the first sign that the directional pressure was fading. Now, with the third candle gapping in the opposite direction of the trend, we now have confirmation that a more significant trend reversal has taken place.

Shooting Star The final star variation we will discuss is the shooting star which occurs after a strong uptrend (or the "inverted hammer" that occurs after a strong move down). The shooting star has a long upper shadow with a small real body at the lower end of the candle. This pattern usually presents itself as a sign of a short term correction rather than a more potent reversal signal. The shooting star is basically telling us that the markets rally could not be sustained. The market opened at or near its lows, shot up much higher and then reversed to close near the open.

Ideally, the real body of the shooting star should gap away from the previous candles' real body. While it is not necessary, it adds confirmation to the validity of the impending reversal. Additionally, take a look at the previous candles; many times you will see overhead shadows on those candles as well. This indicates that the stock is struggling to go higher; just another clue as to what might happen. When a shooting star forms near a resistance level, which also was created with a shooting star, a very powerful resistance level is created. As mentioned before, the shooting star is a short term topping formation and any break above the high of this candle negates the ramifications of the formation.

There is one variation to the shooting star, it is known as the "gravestone doji". The "gravestone doji" is a shooting star with virtually no real body, the open and close are exactly the same. This formation is more powerful than the typical shooting star as portends a more serious reversal.

Link to original article: http://www.mysmp.com/candlestick-charts-stars.html

See You at the Top,

Alton Hill


About the Author
Al Hill is the co-founder of mysmp.com (My Stock Market Power) which provides free trading articles to investors. Please visit http://mysmp.com for more free articles.