Caught in the uncertain and volatile markets of the past couple of months, I was finding it extremely difficult to yield consistent returns in short-term trading. My options included:
1. Getting out of trading (for now) and take a break.
2. Go with buy and hold strategy (at least consider it).
3. Go with equity options (to accommodate a dwindling capital base).
4. Go with day trading.
I stopped trading in my margin account for about 2 weeks until I realized that I need to finance my monetary needs. The risks and the losses were wiping me out monetarily and psychologically. Cash was safe but it guaranteed a zero return.
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Stock analysis software works a lot like technical analysis software, it’s a program that helps you manage and control your money that you have invested in stock.
There are many different kinds of stock analysis software out there and some can cost your thousands of dollars. You have to find a happy medium with the stock analysis software you choose can do the job you need it to and what your wallet can handle as well.
Once you have picked the right stock analysis software, its then time to know what exactly you are doing when using stock analysis software. Here are some different ways to navigate you through using stock analysis software.
Fundamental Analysis of Stocks, which is when the investors analyze stocks when considering the financial information of the companies that are releasing stocks. The most common form of Fundamental Analysis of Stocks found in stock analysis software is the CANSLIM method. The CANSLIM method is defined as the analyizing of stocks by looking into the companies that offer high buying demand and above average growth in earnings.
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With the general market down 50% and financials and housing down 80% over the past year and the market indices down at 12-year lows, there is market sentiment that we must be near the bottom.
From a long-term investing perspective, this is a good time to buy in, although the entry into positions should be gradual to account for further price drops. Also, dollar-cost averaging (buying a fixed dollar amount at regular intervals) can be employed.
Notable bear market players are saying a bear-market rally is coming and some are even saying a big rally. So, the sentiment is that the markets are due for a bounce with the open question on how big a bounce. Some have disclosed that they have sold their short positions and are making a play on the long side.
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Reading charts is a tricky thing, one you need training to do successfully. A person without training will see simply up-and-down moves with no meaning. Those trained in analysis, however, can discern the meaning of these sometimes seemingly random movements. Those ‘in the know’ can use the charts to see what the future holds for stock prices. There is not necessarily one pattern that can be used to make good predictions but when the dozens and dozens of different patterns, all of the indicators, are taken together, those with practice can be very good indeed at anticipating future market movements.
Stock Price Patterns - One commonly used pattern to watch for is Cup and Handle. A high price to start then a dip and then back up forms the cup. Then when prices level out for a bit you have the handle. Buying on the handle can bring you quite satisfactory profits.
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