Thursday, January 1, 2009

Some Basic Technical Analysis Indicators

Happy New year!
This is my first post in this blog of the Year 2009! I am thinking to share some very Basic Technical Analysis indicators and Charting in this entry.

Basically there are 3 types of Chart:-
1. Line Chart
2. Bar Chart
3. Candlestick Chart

I am using GBPJPY (Pound Yen) pair in H1 (1 hour) for all the charts below:-

Line Chart
Line Chart in Forex
- Line chart is the most basic Chart. It only has lines, you can not know clearly about how price moves in each hour in the day.

Bar Chart
Bar Chart in Forex
- Bar Chart presents the information inside a chart Better. How to see?
Bar Chart
Each of the bar in consist of 3 lines, horizontal line on left, horizontal line on right and a vertical line. Each of the Bar is in a certain period. The first Bar Chart that I show is in H1, meaning that each bar is equal to one hour. Horizontal line on the left is named as "Open". Horizontal line of the right is named as "Close". The top of the vertical line is named as "High" and the bottom of the chart is named as "Low". In H1, Chart, eg: 2:00 am. At 2:00:00 am, the opening price of the bar will be the Left horizontal line. In that 1 hour, (from 2:00:00 am to 2:59:59), the price will move up and down, you do not know where will the price move. So, the highest price move on that hour, will the the "High" and the lowest price on that 1 hour will be the "Low". At 2:59:59, the price will determine the "Close".

Candlestick
Candlestick Chart in Forex
If I am not mistaken, this Candlestick chart is developed by Japanese about 400 years ago to predict the supply and demand of Rice. It is amazing that it is still using until today. Candlestick chart is actually the most popular charting. How to see it? It is almost the same like Bar Chart, but it is easier to see and you will notice if the price is up or down within some distance from the chart.
Candlestick Chart in Forex 2
It is basically consists of 2 types of candle. White and Black (The colour of the candlestick can be customized). The White candle means that on that period, the price is moving up (Bullish), the Black candle means that on that period, the price is moving down (Bearish). I think example above illustrates the Candlestick Chart well.

Technical Analysis
The First Technical Analysis indicator that I would like to share is Bollinger Bands. Bollinger Bands is created by a person name John Bollinger in early 80s. I will not go into details on the Bollinger Bands here.

What is Bollinger Band?
- In simple world, it is a technical analysis indicator that determine if something is oversold or overbought. I will use Forex pair as example.

Bollinger Bands Parameters
Bollinger Bands Parameters
Period that we are using is 21 and Deviations is 3. The default for this PFGFX platform is 20 and 2. What is Period and Deviations? Well. I will keep it simple for this post, so, will not discuss here.

Chart without Bollinger Bands (BB)
Forex Chart without Bollinger Bands
- From this chart, you see that like only a random price movement. You can not get much information from the Chart.

Chart with Bollinger Bands (BB)
Chart with Bollinger Bands
After I add Bollinger Bands inside, it shows some information. Bollinger Bands determine if a pair in Forex is Oversold (when the price touches the lower Band) and Overbought (when the price touches the upper Band).

I have highlighted the Oversold and Overbought areas at the below chart:-
Chart with Bollinger Bands Highlighted
However, you must understand that that Bollinger Bands is not a Holy Grail.. It is not 100% accurate. In my opinion, the accuracy of Bollinger Bands is only about 60-70%. So, it is actually acts as support indicator in our SRDC (Support Resistance Daily Candle).
Happy Trading Everyone! May all the Good trades be with you in Year 2009!

Sunday, June 15, 2008

Carnival of Equity Trading #10 - June 15, 2008

Welcome to the June 8, 2008 edition of carnival of equity trading.

Slackerwealth presents Quicksilver: A Stock to Benefit from High Energy Prices posted at A Slacker's Quest for His First Million, saying, "I examine Quicksilver (KWK), a company that may continue to benefit from high oil and natural gas prices."


Day Trading

The Shark Investor presents 10 Reasons Not To Trade Forex posted at The Shark Investor, saying, "Why forex trading is not real investing"


Equity Trading

Babak presents Free Online Tools To Find Correlated Stocks posted at Trader's Narrative, saying, "Free online tools to find correlating stocks."


Investment

mmhabits presents How to Invest for the First Time posted at Millionaire Money Habits, saying, "For the fist time investors, learning how to invest can seem quite daunting. You have 15,000 U.S. companies that you can choose from, a lot of new terminology to learn, and just the sheer volume of brokerage options and investing strategies can make things complicated. Read this to learn how to simplify the process."

KCLau presents Picking the right Structured Fund posted at KCLau's Money Tips, saying, "About how to pick the right structured funds and what they are all about."

Aussie Investor presents Australian Stock Market Investing posted at Australian Investing, saying, "What is the difference between investing and speculating? This post compares the two and how they apply to the Australian stock market."

Steve Faber presents - Different Ways of Investing Money – What is the Best Choice for You? posted at DebtBlog.

k presents How to profit from financial markets - Introduction posted at How to profit from financial markets, saying, "How to profit from financial markets (Commodities, Stocks, Forex, etc) Invest your time reading this, before investing your money. Financial Education starts here"

MoneyNing presents How I Started Buying My First Stock posted at Money Ning, saying, "How I started investing!"

Kacper Wrzesniewski presents Moving Average as a support or resistance posted at KacperWrzesniewski.com, saying, "Today, I want to show you that we can also use this technique to look for resistances and supports."

Leon Gettler presents Banking squeeze posted at Sox First, saying, "Lehman Brothers $2.8 billion loss is a warning for investors: banks simply don’t trust each other any more which is a worry for anyone who has invested their money in financial services."

Ellesse presents Free Career, Business & Trade Magazines for Your Career & Economic Goals posted at Goal Setting College.

Raymond presents Warren Buffett’s Single Most Important Piece Of Advice For Stock Market Investors posted at Money Blue Book.

Raymond presents List Of the Best Online Discount Brokers posted at Money Blue Book.


That concludes the Carnival of Equity Trading Edition #10. We have had many good articles from various of people and I learned a lot from you. I would like to take this opportunity to inform all of you that I will stop to host this Carnival of Equity Trading for a while, I will use all my time to laser focus on my career and investment. When the next time I host again, I promise that the Carnival of Equity Trading will be better and more enjoyable.


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Sunday, June 8, 2008

Carnival of Equity Trading #9- June 8, 2008

Welcome to the June 8, 2008 edition of carnival of equity trading.


KCLau presents Investment-linked funds performance last year posted at KCLau's Money Tips, saying, "about the formats of investment-linked performance results"


Day Trading

Heather Johnson presents Five Online Resources for Forex Beginners posted at Everything Finance.


Equity Trading

Alvaro Fernandez presents Your Brain On Trading 101 posted at SharpBrains, saying, "A trader and neurologist introduces us to the world of the Brain on Trading and the differences between expert and novice traders."

Brice Hogan presents Creating A Stock Portfolio posted at Financialzip.com, saying, "Creating an portfolio is essential to..."


Investment

Passive Income Investor presents Profiting From The Rise In The Price Of Oil posted at LIVING OFF DIVIDENDS & PASSIVE INCOME.

Babak presents Does A Bull Market Need Financial Stocks’ Leadership? posted at Trader's Narrative, saying, "Is the market shibboleth that financial stocks must lead or do well for a bull market true? You'd be surprised to know the truth."

Aussie Investor presents Australian Stock Market Basics posted at Australian Investing, saying, "This post provides an introduction to the Australian Stock Market. Whether you're an Australian looking to invest locally or your just someone looking to invest internationally, this post covers the basics."

Raag Vamdatt presents What is American Depository Receipt (ADR) and Global Depository Receipt (GDR)? :: RaagVamdatt.com :: Financial Planning demystified posted at RaagVamdatt.com - Financial Planning demystified.

Marcus presents Investing In The Stock Market posted at Stock Market Investing For Beginners, saying, "This article provides some tips for investing in the stock market. By taking a long term view, planning your investment strategy and sticking to your plan, investing in the stock market can be a great way to build wealth."

Leon Gettler presents Lehman: Is this a Bear Stearns replay? posted at Sox First, saying, "All eyes are on Lehman Brothers tanking. Is this a Bear Stearns replay?"

Raymond presents How To Open A Roth IRA Account And Which Broker To Use posted at Money Blue Book.


That concludes the Carnival of Equity Trading Edition #9 . Submit your blog article to the Carnival of Equity Trading Edition #10 which is due on 12am EDT June 15, 2008 using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.


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Sunday, June 1, 2008

Carnival of Equity Trading #8- June 1, 2008

Welcome to the June 1, 2008 edition of carnival of equity trading.

Mag Herrera presents The Quest for Making Money Online posted at Life. Money. Development., saying, "Personal opinion and views about the rush for making money online"


Day Trading

Jed Norwood presents Forex Trading Charts | Long Term vs Short Term posted at Forex Trading Systems, saying, "Many traders choose to trade on longer period charts while working a full time job. This article explains briefly the difference between long-term and short-term trading."


Investment

Investing Angel presents Investment Mistakes To Avoid » Free Stock Market Investing Tips posted at Stock Tips, saying, "Some investment mistakes that you need to avoid to make a lot of money."

Value Seeker presents Are Mutual Funds For You? posted at Stock Investing, saying, "Figure out if mutual funds are the right thing for you to invest in."

Investing Angel presents Why I?m Shorting Microsoft (MSFT) posted at Stock Tips, saying, "Author believe Microsoft has nowhere to go but down."

The Stock Teacher presents Avoid Making This Key Investment Mistake posted at Stock Investment, saying, "Many people make bad investment decisions because they let their emotions take control of them."

Walter W. Fouse presents Vanguard Index Mutual Funds Versus Vanguard Managed Funds posted at Best No Load Funds.

Joshua Seth presents What To Do With Your Tax Rebate Check posted at Joshua Seth Blog.


That concludes the Carnival of Equity Trading Edition #8 . Submit your blog article to the Carnival of Equity Trading Edition #9 which is due on 12am EDT June 8, 2008 using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.


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Sunday, May 25, 2008

Carnival of Equity Trading #7- May 25, 2008

Welcome to the May 25, 2008 edition of carnival of equity trading.

David-Bernard Ugonna presents Negotiating in real estate posted at David Bernard Ugonna, saying, "Real Estate Investing"

Praveen presents How to Screen Stocks With Yahoo Finance posted at My Simple Trading System.

Sally Thompson presents 100 Resources to Go to College on the Cheap posted at College Degrees.


Equity Trading

Nandita presents Differential Voting Rights | Law Matters posted at law Matters.

Brice Hogan presents Use Investors Business Daily posted at Financialzip.com.


Investment

Larry Russell presents The Top 25 Low Cost Best US Money Market Funds posted at THE SKILLED INVESTOR Blog.

Aussie Investor presents Stock Analysis - Debt To Equity Ratio posted at Stock Market Investing For Beginners, saying, "When investing in the stock market, do you look at debt. Do you know how much risk you're taking on through the borrowings of the stocks you own? This article discusses the debt to equity ratio. What it is, how to calculate it and how to apply it to your stock market investments."

Babak presents Conditions Of New Bull Markets: Recession posted at Trader's Narrative, saying, "How a recession can actually signal a new bull market."

Steve Faber presents - Investing in Oil vs. Investing in Energy for the Future – Do Alternative Energy Funds Track Crude Prices? posted at DebtBlog.

Raymond presents Warren Buffett’s Single Most Important Piece Of Advice For Stock Market Investors posted at Money Blue Book.

kozen presents Why you should go short in Oil - I do! posted at Market Thoughts for Profitable Investment.


That concludes the Carnival of Equity Trading Edition #7 . Submit your blog article to the Carnival of Equity Trading Edition #8 which is due on 12am EDT June , 2008 using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.


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Monday, May 19, 2008

Carnival of Equity Trading #6- May 18, 2008

Welcome to the May 18, 2008 edition of carnival of equity trading.

Rickey Henderson presents A Memo from the Office of Steven R. Lawlor, CPA, to Indiana Jones posted at Riding with Rickey.

Mag Herrera presents - Using a Trailing Stop Limit Can Generate Explosive Investment Returns posted at DebtBlog.

Brice Hogan presents The Seventh Wonder of the World: Compounding Interest | Financialzip.com posted at Financialzip.com, saying, "Why compound interest is so powerful."

Lane Wright presents Compete with the Pros posted at Awesome Forex Alerts.


Investment

Investing Angel presents Why Most Investors Buy High And Sell Low » Free Stock Market Investing Tips posted at Stock Tips, saying, "Most investors buy stocks when they are overvalued since they give into herd mentality."

Babak presents Long Term Cumulative Breadth Charts posted at Trader's Narrative, saying, "Why cumulative breadth can be misleading as an indicator."

Leon Gettler presents Investor crystal ball gazing posted at Sox First, saying, "With the credit squeeze and soaring energy prices, it's worth asking whether investors can see that far ahead. How do investors read trends and make the right calls?"

Raymond presents Warren Buffett’s Single Most Important Piece Of Advice For Stock Market Investors posted at Money Blue Book.

Dorian Wales presents The Personal Financier: Know your Portfolio - Three Simple Charts Can Make a World of Difference posted at Personal Financier, saying, "Portfolios change as investments change – make sure it still fits your goals and risk tolerance"


That concludes the Carnival of Equity Trading Edition #6 . Submit your blog article to the Carnival of Equity Trading Edition #7 which is due on 12am EDT May 25, 2008 using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.


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Saturday, May 17, 2008

How to marry a guy with $500k annual income

A young and pretty lady posted this on a popular forum:

Title: What should I do to marry a rich guy?

I'm going to be honest of what I'm going to say here. I'm 25 this year. I'm very pretty, have style and good taste. I wish to marry a guy with $500k annual salary or above. You might say that I'm greedy, but an annual salary of $1M is considered only as middle class in New York. My requirement is not high. Is there anyone in this forum who has an income of $500k annual salary? Are you all married? I wanted to ask: what should I do to marry rich persons like you? Among those I've dated, the richest is $250k annual income, and it seems that this is my upper limit. If someone is going to move into high cost residential area on the west of New York City Garden (?), $250k annual income is not enough.

I'm here humbly to ask a few questions:
1) Where do most rich bachelors hang out? (Please list down the names and addresses of bars, restaurant, gym)
2) Which age group should I target?
3) Why most wives of the riches is only average-looking? I've
met a few girls who doesn't have looks and are not interesting, but they are able to marry rich guys
4) How do you decide who can be your wife, and who can only be your girlfriend? (my target now is to get married)

Ms. Pretty


Here's a reply from a Wall Street Financial guy:

Dear Ms. Pretty,

I have read your post with great interest. Guess there are lots of girls out there who have similar questions like yours. Please allow me to analyse your situation as a professional investor. My annual income is more than $500k, which meets your requirement, so I hope everyone believes that I'm not wasting time here. From the standpoint of a business person, it is a bad decision to marry you. The answer is very simple, so let me explain. Put the details aside, what you're trying to do is an exchange of "beauty" and "money": Person A provides beauty, and Person B pays for it, fair and square. However, there's a deadly problem here, your beauty will fade, but my money will not be gone without any good reason. The fact is, my income might increase from year to year, but you can't be prettier year after year. Hence from the viewpoint of economics, I am an appreciation asset, and you are a depreciation asset. It's not just normal depreciation, but exponential depreciation. If that is your only asset, your value will be much worried 10 years later.

By the terms we use in Wall Street, every trading has a position, dating with you is also a "trading position". If the trade value dropped we will sell it and it is not a good idea to keep it for long term - same
goes with the marriage that you wanted. It might be cruel to say this, but in order to make a wiser decision any assets with great depreciation value will be sold or "leased". Anyone with over $500k annual income is not a fool; we would only date you, but will not marry you. I would advice that you forget looking for any clues to marry a rich guy. And by the way, you could make yourself to become a rich person with $500k annual income. This has better chance than finding a rich fool.

Hope this reply helps. If you are interested in "leasing" services, do
contact me…

signed,
J.P. Morgan

Saturday, May 10, 2008

Is the worst really over?

my portfolio on 10 may 2008
Last Week, I sold part of my Apple shares and its options to buy some other Financial stock options and most of my financial stock options are in negative! I bought at the wrong timing. If you ask me, " is the worst really over?" Answer: "I doubt it."
Crude oil price is trading above $125 and AIG missed earnings and lower its guidance. The above trades are only simulation.

Carnival of Equity Trading #5- May 11, 2008

Welcome to the May 11, 2008 edition of carnival of equity trading.

Dorian Wales presents Do you understand investment risk? posted at Personal Financier, saying, "Talk of investment risk is abundant but what is investment risk really?"

Sagar presents 6 Ways Greenspan Caused the Current Economic Crisis | Currency Trading.net posted at Currency Trading.net.

Mandy Trapper presents Low Cost Options Are Available For The Forex Beginner posted at Forex Trading System Secrets.


Day Trading

miracletech presents IRS Declares me one of the top Day Traders in History posted at TuffTrade.


Equity Trading

Brice Hogan presents Equities (The Basics of Stocks) posted at Financialzip.com, saying, "A good refresher on how stocks work."

Raymond presents List Of the Best Online Discount Brokers posted at Money Blue Book.


Investment

Leon Gettler presents Does gold stack up? posted at Sox First, saying, "No substance has held as much allure over the centuries as gold. And that allure still seems to hold with gold prices going up to as much as $1000 an ounce in March. But gold does not stack up in investment portfolios."

Steve Faber presents - Lessons About Investing – Beginning Investing Mistakes to Avoid posted at DebtBlog.

Value Seeker presents Stock Investment Resource: Stock Market Investing Tips - Growth vs. Value Investing posted at Stock Investing, saying, "The pros and cons of investing in growth vs value stocks."

Barb A. Ryan presents 10 - Independent Investment Counselors and Financial Advisors posted at Pasadena Financial Planner.

Investing Angel presents Some Thoughts On Google (GOOG) » Free Stock Market Investing Tips posted at Stock Tips, saying, "A few thoughts about the google stock"


That concludes the Carnival of Equity Trading Edition #5 . Submit your blog article to the Carnival of Equity Trading Edition #6 which is due on 12am EDT May 18, 2008 using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.


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Sunday, May 4, 2008

Profit taking from Apple and Call options

I have decided to take some profit from Apple and also the call options to release some buying power to buy other options next week. There are a few options that I am watching: Goldman Sachs (NYSE: GS) Call option, Citigroup (NYSE:C) Call Option, Microsoft (NASDAQ:MSFT) Call Option, Yahoo (NASDAQ:YHOO) Put Option and Bank Of America (NYSE:BAC) Call Option. Research in Motion (NASDAQ: RIMM) is also in my watch list as it has very good momentum comparing with Apple (NASDAQ: AAPL). But what I do not like is RIMM has only a single of line of product - Blackberry while Apple has multiple lines of products - IPhone , IPod, ITunes, Mac and more which make me think that Apple is more attractive.

Profit from Apple on May 2, 2008: 40.77% or $5,240.00
Profit from Apple on May 2, 2008

Profits from Options on May 2, 2008: 101.13 % or $41,210.00
Profits from Options on May 2, 2008
Merck (NYSE:MRK) is doing well, it is just the matter of time for it to trade above $40.

The reasons I choose the Call and Put options stated above.
The Deal between Microsoft and Yahoo is Off! So, that is the reason I have placed order to buy Call Options for Microsoft and Put Options for Yahoo. Goldman Sachs is trading above $200, to me it is a buy opportunity as long as it is trading above $200. If the worst is over, I guess some good fundamental financial Stocks might be attractive. So, I am placing order for Citigroup and Bank of America which have been killed since October, 2007.

Disclaimer: The above trades are not in Real money