Sure, using TA methods like Japanese Candlesticks, and RSI and MACD will help you get a SLIGHTLY better picture, but TA does not allow for the emotional aspect of it – say, when a stock in a particular sector blows up due to mismanagement or fraud, all the other stocks in that sector go down because of "guilt by association".
And, when folks panic for whatever reason, they dump stocks regardless of whether they are good or bad.
If I were to resume Day Trading ( I gave that up some time ago ), I would depend most heavily on the MOMENTUM indicator, and not hold for more than a few hours.
From experience, it is VERY difficult to make money consistently in Day Trading, and I hope you will consider a longer term perspective.
Choose stocks with good fundamentals, good management, a stable market space, then buy some. The probability of being able to exit with a profit increases the longer you hold it.
Long term investing is not gambling!
Warren buffet own his own company and you can invest in it berkshire hathaway ticker symbol brkb or brka
An important aspect of day trading is to have a set investing plan. Day traders don't always make a profit on each trade they do during the day but if they keep to their plan (if it’s a good plan) they will be more likely make a profit for the day.
The barriers to becoming a day trader are experience and cash. You need both to succeed in the stock market.
They impact the market in a few ways. First they add volume to the market. They also can increase the speed of spikes. When a day trader sees his stocks tanking he will sell them. This will drive down the price more. Conversely if he sees a stock that is starting to rock he will buy. This will increase the value of that stock.
That being said, if your looking to investing something that is the "least risky" and "most predictable" you should look at a low cost fund that tracks a broad market index . Check out VFINX, Vanguards mutual fund that tracks the S&P 500. If you looking for pure predictability, try a bond fund.
The others you mention Forex, Options and Commodities, are the MOST risky and LEAST predictable. And while they can be quite profitable for a professional trader, they are not suitable for the average/rookie investor.
In order to profit from the forex market, you will need strategies and also the will to change these strategies. Traders who lack a well thought out trading plan are prone to panic and confusion, when unexpected swings in the forex market occur. Many traders will tell you that trade driven by emotion is the fastest way to deplete your funds. Whether or not you are using a technical or fundamental style, it is still essential that you have a proper view of the market.
Developing your own trading style is a time consuming process and is often acquired through trail and error. It is unfortunate that there is no ‘golden’ rule’ to trade in the forex market and technical and fundamental styles of trade won’t be successful all the time. Successful traders often have a unique style of trading and take up various strategies during a trading session. Only continuous practice will help you gain a feel for the movements of the forex market.
As for WHY your would want to this, contrary to the last answerer'a assertion that brokers don't find bonds sexy and hence don't bother learning about them, throughout their 135-year history, Edward Jones made their business on selling quality bonds to individual investors. I've found some of the most knowledgable people I know regarding bonds to work for Edward Jones. In addition, they do so much bond business that they get optimal pricing and that is in turn passed on to you. When calling around for price quotes, at the very make sure you include them, you won't be sorry.
I should point out that unless you need the money, now is probably not a good time to be selling your bond. Although long-term interest rates (i.e., that of most bonds, which are driven by economic factors) have little to do with short-term rates (which are directly driven by the Fed), we are nevertheless in a rising interest rate environment and your bond undoubetdly is worth less than it wa a year ago. Of course, you could be banking on that and need a tax loss for some reason, but barring that, if you're getting good interest, hold onto it until rates go down again to get a more advantageous price.
Of course, when buying bonds specifaclly for the interest income, you should learn not to even care what the price is. It's hard psychologically, and it takes some getting used to, but it's worth it. After all, if you're buying a cow for the milk, then what the hell do you care about the price of beef?
Hope this help!
–J.
Just wanted few clarifications on premarket/after market trading. Are these recommended for amateur traders? For instance today I were able to get news on PHTN takeover at 7:40am and although I do not have a trading account went to aol finance site to check on premarket price(15 delay posting) and it was at $11.68. If I were trading and bid for it at that price would I have been able to get it. Similarly around 8:30am still in premarket, the price soared to $15.20. Does that mean I could have sold it at that price and made a 30% plus profit!
How is the after market price determined, supply and demand or other factors come into play. Does that after market price determine opening price for the following day.
it worth relying on premarket specially after perusing extensively through business wires for tips, breaking news, expected data etc? Is this a good starter strategy?
Your feedbacks appreciated. Thanks all.
Now, keep in mind that the premarket trading doesn't open where it left off the day before, but rather, where the current bid/ask prices are. Thus, if a stock closed yesterday at 10 bucks, came up with stellar earnings this morning at 7:30, you'd expect the initial bid/ask to be above 10 bucks (as everyone, not just you, got this news). Now, it is possible that the last trade for the stock this morning was lower than the pre-market bid/ask. But it is the current bid/ask price that matters and tells what you can get for it now. Thus, you wouldn't be able to pick it at 10 bucks pretrading. Now, it is possible that if you premarket trade and you get the stock early in the day, you can appreciate the continued rise during the day of that stock (although you probably could have done the same by just buying it at market open). However, the premarket trading could have also over-reacted (in particular, if the stock is very lightly traded). If the latter is the case, then you would have been better off just buying the stock at market open.
Bottom-line is that you should probably buy/sell stocks pre/after-market just as you would normally, keeping in mind everyone else has the news too. Further, you should be careful of large spreads with the after-hours trading, as it reduces possible gains. Hopefully this helps?