Millionaire Trader Teaches You How To Use The Stochastic Oscillator

By Sam Nielson

The Stochastic oscillator will move between 0 and 100. Low readings mean an oversold market while high readings mean an overbought market. Oversold means the market over reacted on the sell off and is ready to bounce upward. Overbought means the market over reacted on the buying and is ready to turn down.

Buy when the Stochastic oscillator is low. Sell when the Stochastic oscillator is high. The idea is to take advantage of other traders when they are emotional: either fearful or greedy. Selling when the Stochastic is high is difficult because you'll want to hang on longer: greed. Buying when the Stochastic is low is difficult because you'll want to sit on the sidelines longer until the chart looks better.

New traders mess up by trying to over simplify trading. They pick just one indicator and use it because it's all they can conceptually understand. Don't do this. The Stochastic indicator needs to be used with other indicators. Why? Consider this. In a sudden buying frenzy, the Stochastic becomes overbought too quickly and will give a premature sell signal. In sudden panic selling, the Stochastic becomes oversold too quickly and will give a premature buy signal. Always use the Stochastic with other indicators.

What you need to do is to enter a position when the Stochastic indicator is at an extreme. If you try and wait until the Stochastic indicator turns, you'll miss too much of the move. Think of the extremes of the Stochastic as telling you how much emotion is in the market. The more the emotion, the better you can take money away from other traders.

If you see a positive divergence between the Stochastic and the price of a stock, go long. A positive divergence is when the stock price drops to a new low, but the Stochastic indicator makes only a slight low and does not break to a new low. Do the opposite on the downside. If you see a negative divergence between the Stochastic and the price of a stock, go short. A negative divergence is when prices rise to a new high, but the indicator goes down or barely rises at all.

You should not buy a stock when the Stochastic is high. Conversely, you should not sell a stock when the Stochastic is low. This is probably the most accurate way to use the Stochastics. Reverse your thinking and look at it as telling you when NOT to trade a stock. Indeed, moving averages are superior to the Stochastic at picking up on trends, the ADX is better at catching entry and exit points, but the Stochastic is the best at telling you when you should NOT trade a stock. - 23196

About the Author:

May this article teaches you how to use the Stochastic Oscillator better and make a lot of money. For more expert trading advice on the Stochastic go to stochastic oscillator

Tips for Trading Descending Triangles Short

By Jeff Cartridge

The descending triangle is the most profitable chart pattern when trading short. The descending triangle is formed with the lower boundary of the price movement contained by a line close to horizontal and the top line slopes down toward the bottom line.

Descending Triangles, Surprise On The Upside

Most descending triangles would be expected to break down and in fact 57%, break out to the downside making this pattern best when traded on the short side. 45% of these breakouts are profitable and on average the profit per trade is 0.92% over a period of 9 days. A good proportion, 12.1% of these breakouts make a profit of 10% or more. The descending triangle is one of the best chart patterns when it breaks to the downside and applying some filters makes this pattern even more attractive to trade.

Specific Setups to Improve Profitability

A break to the downside works better in a falling market or sector environment. By using filters that require the market to be in a consolidation or an up trend you can improve the results. The sector should also be in a down trend for the best results. Strangely a sector that is in a down trend at the beginning of the pattern produces better results than a sector in a down trend when the breakout occurs.

A breakout from a descending triangle can occur anywhere on the way to the point of the pattern; it is not important exactly where the breakout occurs. The best trades occur when a down side break occurs after the stock bounces off the lower boundary and drops back before hitting the upper boundary.

Ensure that the volume is supportive of the breakout, i.e. volume as the share falls is greater than volume as the share rises.

Descending Triangles Extremely Profitable

Following a series of simple rules to determine which descending triangle to trade can improve results dramatically. By applying these filters descending triangles are profitable on 48% of the trades and return an average of 2.55% per trade in 10 days. This is a very profitable pattern to trade.

Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23196

About the Author:

Jeff Cartridge is a private trader and created the website LearnCFDs.com Trading Chart Patterns - All The Insider Tricks

Forex Investment

By Bart Icles

Using the Internet as a means to make money is fast making headway with many individuals who are hard pressed to earn additional income. Most investments offer very little in terms of money making potential, while others offer better opportunities but come with unrealistic requirements such as large capitalization. Online business ventures will continue to see a steady rise in the years to come, and one among them is Forex Investment. Investing in Forex today is now open to anyone to engage in, unlike in the past where it was only open to large business entities. This changed quickly with the computer and the Internet.

Forex trading is the only online trading platform that allows anyone, even with only a substantial amount to invest in - with or without ample experience. Forex investment is also by far the easiest and fastest way to help augment anyone's present income. But before deciding to make it your career you should gain some more experience while staying patient and making calculated decisions before actually seeing any real substantial profits. To do this, you can invest in a good Forex trading system to train and gain a clear understanding of all there is to know about Forex.

One way to improve one's chances of making it big in Forex trading is a mix of doing smart and cautious trading, as well as being daring once in a while if called for. To do this, one must find a tried and tested Forex trading system that will aid you on how to make trading in Forex in the best and convenient way possible. Forex investing is relatively easy once you have a better grasp of how everything works and connects, and of what particular tools to learn and use in trade transactions. One of these is leverage trading that lets one buy currencies even with limited funds at hand, allowing one to buy currencies 200 times than what is actually available on the account.

In the event of unfavorable scenarios happening when a trader starts to lose a substantial amount of money and ends up having a negative account balance, the Forex Broker may make a margin call and close the account and require immediate payment. The losing trader must abide by the agreed contracts and make use of leverage wherein properties used as collateral should be turned over to the broker as payment. However, in order not to get into this kind of a situation, there is a stop-loss option which will enable you to cease from making further loses if your projected margin is reached.

Investing in Forex or any other investment market will have share of gains and losses, in small or big amounts. The important thing to remember is to learn everything there is to learn and use it for future trading. That way you'll be able to make more profitable transactions and go on to become another successful investor in Forex. - 23196

About the Author:

How do you become a phenomenal forex trader? Also, come learn how to determine if forex day trading is for you.

Always Draw Correct Trendlines

By Ahmad Hassam

For new forex traders, learning forex trading is like building a new car from scratch without an instruction manual. Many of you acquire quality parts like brakes, wheels, motors, seats, steering wheels etc.

To become a successful trader you need right parts with right instructions to put them together. After all, a part such as a $2.00 gasket can bring your car to a screeching halt.

You should understand that forex trading is very different from trading stocks. Companies can file for bankruptcies like GM or Goldman Sachs or Enron. Companies can go completely out of business taking their share value to zero in the stock markets. However in case of currencies, there is no threat of a country going bankrupt or doing out of existence in a few weeks.

Trade balances and budget deficits play a role in determining the price of a currency. What can happen is that trade balances and foreign capital inflows can cause severe economic pressures on a currency! This can create dramatic changes between the currency values relative to other currencies. When that happens, it can be an incredible financial opportunity for savvy, educated currency traders.

Before you enter the markets, you should learn how to find the current trend. For a skilled and educated trader, learning how to spot a trend is very important. A trend can last from a few hours, several days or several months. It can create an enormous financial return for the savvy.

Learn to always trade in the direction of the market. Fighting a trend is like swimming against the current and getting drowned. Traders make many mistakes and the biggest one is trading in the wrong direction.

Suppose you are an active trader. You should have the trading software that has the moving trend line indicator. If not then, you will need to learn the skill of drawing correct Trendlines. An incorrectly drawn trendline can be the difference between making and losing money in a trade.

There are three types of trend lines that you need to learn how to draw. 1) An Inner Trendline. 2) An Outer Trendline. 3) A Long Term Trendline. These three trendlines form on all time frames and in both uptrends and downtrends and you will need them in your trading.

Draw a straight line connecting support levels without penetrating bodies or wicks of a candle in any uptrend. Correctly drawn trendlines can predict future levels of potential support in an uptrend as well as future levels of resistance in a downtrend.

Draw inner uptrendlines by finding the last two support levels and drawing the line from left to right. Likewise, draw the outer uptrendline by starting at the far left of the chart. Move to the right connecting the majority of the support levels with a straight line.

Go on a larger time frame like daily or weekly and draw the longer term trendline by connecting the levels of support starting from the far left of the chart moving forward. The market reacts the same way in a downtrend as an uptrend but in an opposite direction. Instead of a support level, use the resistance level to draw trendlines in a downtrend. That means all the rules are the same but in the opposite direction. - 23196

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Discover A Revolutionary New Forex Robot. Develop your own Forex Trading System.

Old Coins and Their Values

By Pete Marks

There are a multitude of reasons why people collect coins. Many people collect coins just as a hobby and others who collect coins for their numismatic value or metal content. either way collecting coins can be fun rewarding for both.

Often people will collect coins from one country or region and others will just collect coins made of certain metals or from a certain era. Some collectors just collect any old coins and others will only collect mint coins.

Coin values are determined by many factors such as age, condition and where it was minted. In recent months many collectors are snapping up the more valuable mint coins and driving up the value of old coins because most coins contain precious metals such as gold and silver.

There are many people who often purchase their coins from local coin dealers. Often your best deals will be found online and at auction sites. There are many benefits to buying from either a local dealer or purchasing online.

The benefits of collecting old coins from a dealer who lives locally is you get to see the coin up very close. The other advantages include less likely being a fake coin and you take it home at time of purchase. You also can establish a relationship with a dealer who can often keep you informed of certain coins that you may be interested in.

That numerous benefits to collecting coins online from auction sites often outweigh the benefits of collecting or purchasing coins from your local coin shop or dealer. I then you'll find auction prices are reasonable and unacceptable way of determining current coin prices without paying a premium. You will also likely find that hard to find coin that may complete your collection you can't find your local dealer for coin shop.

Purchasing claims online may seem a little more confusing at first but once you develop a relationship with an online auction site or dealer it just makes it that much easier. Most auction sites have seller ratings to help you determine who may be worth buying from and who you may be able to trust. In today's age most online sellers have good return policies so making a purchase online should not be a high risk. - 23196

About the Author:

There are many ways to determine old coin values find out how much your old coins are worth.