Stock Trading Market Research
Our Stock Tip of the week will be back
in late March 2010. Our trading picks history, timing and system will then
show how we have successfully swing traded this violate Stock Market over
the past 2 years. Below is a stock trading article with some good trading
information though it is not the specific system we use or endorse.
Essential Stock Trading Tools
by Noble DraKoln
One of the most important skills that any trader should have is the ability to enter or exit the market effectively. You must know the tactics involved in pulling the trade on or off depending on current market conditions. You will have to determine the best time for entering the market so you can set yourself up for a profit plus you will need an understanding of when it's time exit the market in order to minimize your losses. There are some very important tools that any stock trader can use that will help manage risks and avoid mistakes that are commonly made by the majority of traders. One such stock trading tool is resistance and support. It is essential that a stock trader can determine resistance and support. If this is done effectively then trading consistency will increase. There are many ways to determine these support and resistance and horizontal lines. One of the most popular ways to find them is by looking at trading ranges. Another way to find them is by using trend lines or diagonal lines and internal lines. These particular tools will help you pin-point specific prices and help you take appropriate measures to maximize the income. It is recommended that you use resistance and support lines in association with price to help let you know about any changes that may occur in the near future. Another crucial tool for successful trading is the Fibonacci Retracement. Physically it somewhat resembles the theory of horizontal support and resistance, but there is a special characteristic of the Fibonacci Retracement technique which distinguishes it from horizontal resistance and support. This time the entries and exits are determined by the market's penetrating or exceeding any of the five Fibonacci ratios such as, 0 percent, 38 percent, 50 percent, 62 percent and 100 percent. There are some soft wares which can do the task for you. These soft wares will analyze the Fibonacci ratios and determine the entries and exits for you. To help you determine the highs and lows of the market accurately there is another stock trading tool--the Average True Range. It is also known as ATR and it can indicate the market's volatility which is the cause for settling down the waves of the market. While resistance and support and Fibonacci numbers serve as multi-purpose tools, the Average True Range is designed to accomplish just one task. There different ways of using this tool. You can use it as a stop loss protective price indicator and to figure out whether the potential of a particular trade has been expired or not. Finally, with any of the stock trading tools above you can combine moving averages. Moving averages are a must-have tool because they show you the momentum of the market over several days, weeks, or months. They give you an idea on whether or not the market is close to one of your entry or exit points. In order to be successful in stock trading you will have to master the craft of using these tools for analyzing exit and entry points. As you become more familiar with the market, you will learn to use these tools with much more efficiency.
Noble DraKoln is the author of the best-selling books Winning the Trading Game and Trade Like a Pro as well as the wildly popular Small Speculator Series: Futures For Small Speculators, Futures For Small Speculators: Companion Guide, and Single Stock Futures For Small Speculators, available on http://www.amazon.com.
He is also a well-known Southern California educator through his investing seminars and mentorship program. He has been a futures investor, broker, and analyst for almost 14 years. You can subscribe to his free monthly newsletter at www.speculatoracademy.com
Noble DraKoln may be contacted at http://www.speculatoracademy.com or noble@liverpoolgroup.com
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