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Technical Indicators Explained

Technical Indicators ExplainedHello again, traders. Today’s topic is indicators.

The vast majority of traders – 90 percent or more, possibly 99 percent of all traders – rely on indicators of some sort.  This is understandable in the beginning, especially unless and until a trader understands how the market works for real and how it generates the information that it does.

Indicators, sadly, do not indicate anything of a specifically useful nature.

They are merely a visual display of a compilation of data points or parameters that a given indicator measures from historical market activity.  Some measure a series of closing prices, some measure the magnitude of certain moves over a series of bars or candles while others assess volume or price disparities, etc.  However, no matter how much data any indicator (or compilation of indicators) can measure or how recent the data or how “fast” the indicator is set to, it is still all just a representation past tense behavior.  They do not “forecast” a thing. 

Posted in Trading Basics by Ford Saeks on December 15, 2014.

Trading Basics Part 4: A Brief Overview of the E-Mini S&P

In part one of our trading basics seriesInvest Word Button Representing Saving Stocks And Interest, we discussed that stocks are minute percentages of a company’s ownership. In part two, we covered what an index is, and the different types. In part three, we gave an overview of what futures and commodities are, and how trading them works. With this foundation established, today we’re going to conclude our series with a brief overview of the E-mini S&P, courtesy of our Head Trader.

Even if a trader does not trade the S&P futures, most traders follow the S&P 500 and monitor its present value throughout each trading day. It’s the single most important barometer of overall market sentiment and it’s used as a gauge by traders and investors of all levels worldwide.  That being the case, it makes the most sense to trade the index itself, as the strength or weakness of the S&P 500 affects all other markets all over the world. Especially equity markets, and certainly individual issues here in U.S. markets.

Posted in Trading Basics by Ford Saeks on November 5, 2014.

Trading Basics Part 3: What are Futures and Commodities?

Cash marketIn part one of our trading basics series, we discussed that stocks represent minute ownership in companies. In part two, we reviewed what an index is, and the different types. Now we’re going to cover what futures and commodities are.

What are commodities?

Generally speaking, a commodity is a class of goods used in the production of other end products. Examples include energy (crude oil, natural gas, gasoline, jet fuel, etc.), agricultural (such as corn, soybeans, wheat, rice, coffee, cocoa, sugar, cotton, etc.), livestock (lean hogs, pork bellies, live cattle, etc.) and metals (gold, silver, copper, platinum, etc.).

Posted in Trading Basics by Ford Saeks on November 3, 2014.

Trading Basics Part 2: What is an Index?

Stock market indexIn part one of our stock trading basics series, we explained that stocks are minute percentages of a company’s ownership, and they are traded on exchanges. Now we’re going to cover what an index is, and the different types out there today.

The first index: Dow Jones Industrial Average

Just before the turn of the century, in May of 1896, Charles Dow and his business associate Edward Jones first calculated and published their index, aptly named the Dow Jones Industrial Average (DJIA).
At the time, there may have been some 100 – 120 publicly traded entities. Charles Dow was the editor of the Wall Street Journal (WSJ), so he and Jones tracked the price movements of those stocks and published them in the WSJ. Thus, the concept of the index (one of several indices developed by Dow) was formed.

Posted in Trading Basics by Ford Saeks on October 29, 2014.

Trading Basics Part 1: What are Stocks and Exchanges?

If you want to learn to trade like a pro, you’ve got to start with a good understanding of the basics. Our four-part series on trading will give you a foundation to start from.Money, Stocks, and Business

What are stocks?

First, if you’re going to be trading, you have to understand what exactly is meant by “stocks” and “exchanges” Stock ownership is the holding of a minute percentage of a company.  You’ve probably also heard of commodities and commodity futures.

Posted in Trading Basics by Ford Saeks on October 27, 2014.