Daily News Clippings

To see today's  News Clippings about Stock Market in different newspapers click following link:

16.10.2011 Sunday - News Clippings

04.10.2011 Tuesday - News Clippings

03.10.2011, Monday - News Clippings

2.10.2011, Sunday - News Clippings

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Buying High, Selling Low Why Acting on Price can be a Mistake

Buy low and sell high is the ultimate guide to successful stock investing. It is also the reverse of what many investors do.

It’s not that investors start out to do that, but too often, they use price, and in particular price movement, as their only signal to buy or sell.

Stocks that have gone up recently, especially those with a lot of press, often attract even more buyers. This obviously drives the price up even higher.

People get excited about what they read and see and want a part of the action. They jump into a stock that is already trading at a premium – they buy high.

Traders

Experienced traders can make money jumping in and out of a stock that’s caught the public’s attention, but it’s not a game for the inexperienced and it’s not investing.

There’s risk involved and tax consequences along with other issues that mean most investors should leave this activity to short-term traders.

For most investors, trying to grab a piece of the latest flashy stock, usually means paying too much (buying high).

Bad Decision

The other side of the market is when a stock has fallen; most investors may want to sell along with the rest of the market. If you go by price alone, this can be a bad decision (sell low).

There are many reasons a stock’s price drops and some of them have nothing to do with the soundness of the investment. That’s why if you only follow price you may miss an opportunity.

After a stock’s price has fallen can be a great time to buy (buy low) if you have done your research on the company.

Conclusion

If all you know about a stock is the price, you may (and likely will) make investing mistakes. Remember, if a stock has had a good run up it may be time to sell, not buy (sell high). Similarly, if a stock has dropped like a rock, it may be a good time to buy rather than sell (buy low). You won’t know what to do unless you understand a lot more about the company than its stock price.

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Don't be a Victim of Investing Scams

Don’t be a victim of an investment scam. It is easier than you think for crooks to con you out of your hard earned money if you let your guard down.

Investment scams come in many forms and the Internet has just made it easier and faster for these vultures to feed on investors tempted by the possibility of an “inside deal.”

The people who run these scams range from the very crude and clumsy to the highly polished and sophisticated who wrap their con games in such an air of legitimacy it may be hard to see the truth.

The Scams

What do these scams look like? There are many different types floating around the Internet, so it would be impossible to identify them all – besides a new one will pop up tomorrow. However, there are some signs you can look for:

• Someone you don’t know promises you an “inside” deal. Why would a stranger pick you out to make rich? Does that make any sense?
• You are offered a can’t miss trading system guaranteed (or your money back) to make you rich. There is no such system – and if there were, why would anyone want to sell it?
• There are no secrets, no passwords, no unrevealed whatever. Don’t pay for anything like this.
• Someone has a very complicated scheme involving offshore bank financing or gemstones or oil leases in Uzbekistan to make you rich. Why get involved in a complicated scheme you don’t understand (there’s a reason you don’t understand it – it’s designed that way), when there are plenty of opportunities that are legal and you can understand.

Popular Scam

One of the most popular stock schemes is called “pump and dump.” Here’s how it works.

A group of crooks buys up a block of stock in a little know company, preferably one that has a semi-exciting technology name. They get on the Internet and begin flooding cyberspace with false rumors about how this company has some breakthrough technology or just signed a super deal.

They may even develop phony letterhead and send out press releases about the company. In some cases, the company knows nothing about the scheme. It becomes a victim too. In other cases, company insiders execute the scheme.

If the crooks are successful, the stock’s price will jump as they convince people they are getting in on the ground floor of some big deal.

After the stock goes up, the crooks decide when they think it has gone as far as it will go and then they sell their big block of stock for a fat profit. When they sell, the price drops and all the people they conned into buying lose money.

A variation of this scheme is for the investors to short a stock then hop on the Internet and spread lies about how the company is in trouble or about to face some criminal proceeding. When the stock drops, the short sellers cover their positions for a big profit.

Conclusion

Schemes come in many forms to separate you from your money. They all have one thing in common: very high returns. The sad truth is that many people fall for these schemes because their greed overcomes their reason. Don’t let this happen to you.

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Make profit by 3*13*39 Moving Average Method

Most people are comfortable with the herd, market rumours, broker tips, etc. But by confirming your trading decision with the help of this trading system, you will be on the way to more profitable trading.

This simple and robust trading systems will not only identify trends, but will also provide you with entry and exit trading signals.

The Trading System

Remember the numbers 3 x 13 = 39

Simple daily moving averages of 3,13 and 39 can keep you in and out of markets fairly efficiently and profitably, (in any time frame actually). Here's how.

Some basic principles to understand are:

-The market moves in long (secular) trends.
-Intermediate trends can last for months to years.
-Short term trends can last for days to weeks.
-Trade intermediate trends in either direction.
-Trade short term trends only in the direction of the intermediate trend.

Proxies:

3 Day MA - a proxy for price
13 Day MA - a proxy for the short term trend (a moving trend line)
39 Day MA - a proxy for the intermediate trend (a moving trend line).

The Basics of MAs

MAs lag market reversals at tops and bottoms, the larger the MA the longer the lag period, the shorter the MA the shorter the lag but the more frequent the whipsaws. MAs work well when markets trend but get frequently whipsawed when they are in a range.

Therefore, trade trends with the MAs but do not trade ranges using MAs. Just stand aside and be patient until a new trend emerges.

The intermediate trend is in the direction of the 39 MA which acts like a moving trend line. If the 39 MA is pointing up then the intermediate trend is up, if down the trend is down. If the 39 MA is horizontal the market is in a range, from which a trend will, sooner or later, emerge.

Analysis by 3*13*39 Trading Strategy

Simple Trading Rules

1. When the 39 MA is moving up buy when the 3 MA crosses up over the 13 MA. and/or when the 3 MA crosses above the 39 MA.. When the 13 MA crosses above the 39 MA consider adding to your long position. Exit and stand aside when the 3 crosses back below the 13 MA..

2. When the 39 MA is moving down sell short when the 3 MA crosses below the 13 MA. and/or when the 3 MA crosses below the 39 MA.. When the 13 MA crosses below the 39 MA consider adding to your short position. Exit and stand aside when the 3 MA crosses back up over the 13 MA.

3. Only initiate trades in the opposite direction of the intermediate trend when the 3 MA crosses above or below the 39 MA, preferably after the 39 MA has already changed direction.

4. This 3:13 MA crossover will keep you trading in the trend with only a small lag and on the sidelines during corrections. The lag only becomes more substantial at reversals of the intermediate trend (a 3:39 crossover), a small price to pay at these uncertain times of trend transition.

You can set your technical analysis sofware to show bar charts with these 3X13x39 simple MAs. This trading system will help you select the best traders while avoiding the less profitable trades in choppy markets. 

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