Monday, April 16, 2007

American Bulls

A good investor always has put in some research before they invest in a company. An investor should never just put their money in a company without knowing historical trends, company news, earning reports and any other useful information that could provide the investor with an edge. It is only luck if a person puts their money in a company without researching and they create a return. So, if an investor should do research what is the best place to find relevant information? The truth is there is no one place to find all the information an investor needs. Every investor should look at a variety of sources and use additional tools and strategies to get the best idea of what a company has been doing and what it will do in the future. The first place to start is any general finance website such as MarketWatch or Google Finance. These sites will show all the stock information is that available to the public and often times have articles and ratings for any stock an investor may look up. There are other tools that are useful for investors that must be paid for through such brokerages as TD Ameritrade or Scottrader. In addition, there are other useful sites that help with researching. One site known as uses a system of candlestick charting to analyze buying and selling pressures that can add to an investor's research arsenal.

The system of candlestick charting has been around since the 1600s. It was developed in Japan to understand rice prices in the marketplace. It was very simple to read and understand the graphical charts. The charts gave somewhat reliable information with regard to future demand and price fluctuations. The system is used for trading and has become popular within the stock market. Steve Nison wrote a book in 1991 entitled Japanese Candlestick Charting Techniques that has helped the spread of this analysis form in today's markets.

The fundamental element of the system is the candlestick. The candlestick is composed of a body (black if the price went down for the day or white if the price went up) and an upper and lower wick. The wick shows the highest and lowest trading points of the day while the body shows the opening and closing prices of the day. Several of these candlesticks form a pattern that is interpreted by the candlestick charting system. It takes several positive or negative candlestick forms to have a reliable pattern, but they are still never that reliable. The market could have news and speculation that could be causing certain formations that do not resemble the correct pattern. So with the use of this system an investor should also look at other research information to find out if the pattern will be upheld and if the stock is a good buy or sell.

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