24h Market Info

It is virtually a “law” of trading in the stock market that wherever you place your stop loss, it will occasionally be triggered by a stock just before it resumes its climb to higher levels. That is just something to be expected if you use any stop-loss. Unfortunately, not using a stop-loss is asking for trouble of a much greater magnitude, and the market loves to reward the foolish, lazy, or stupid, with the just recompense of their behavior. It makes no difference if you set the stop at 10% or at 3% from the low, high, or close. You can use stops that are volatility-based, use Fibonacci retracement ratios, Gann analysis, pivot points, percentage declines, or any other approach. No matter how sophisticated your mathematics is, you will often find you have sold for no good reason other than the occurrence of a temporary price spike that was just sufficient to trigger a stop loss — your stop loss. Learn to live with it... Read More

Short-term traders tend to concentrate on technical chart patterns, and long-term investors tend to pay much more attention to the fundamentals of the company. However, both types of market participant should use a combination of the two approaches for better timing and greater returns. The technical setup pattern can give some assurance that an upward move is likely soon. One or more good fundamental measurements can give some assurance that if the stock does start to rise to a higher price, its ascent is likely to be a trend of significance.... Read More

Do short-term traders assume more risk or less risk than long-term investors? Does selling quickly when an overpriced stock breaks down make a person a trader? If so, is that a bad thing? If you read between the lines in the financial press, you will find that it is the “traders” who profit from short swings in the market and from market volatility. Note how often it is that when there is a significant market surge, the announcement is made that “traders snapped up oversold stocks today and the market surged” or “traders sold to take profits from the recent market rise.” The real issue should not be whether a person is a trader or investor. It should be whether or not his enterprise is making money. Some in the industry do treat the term “trader” as if it represented something evil. Why? Though they have concocted a rationale for a pejorative treatment of the word, it seems to come down to money and the naysayer’s fear of losing it.... Read More

In a volatile market, short-term stock trends can be used to control risk and enhance returns. The amplitude of short-term price swings is often greater than a stock’s appreciation for a full year. Since a person cannot know in advance whether a short-term “dip” will not become a “plunge,” it is necessary to pay careful attention to the dips, and to set limits to how much of a decline in stock price will be allowed before selling.... Read More

ETFs (Exchange-Traded Funds) which can be traded like stock at any time during market hours, have low expense ratios, have less risk than individual stocks, do not have some of the tax disadvantages of a regular mutual fund, do not pool investor capital, and are constructed so they are far less susceptible than “standard” mutual funds to the fraudulent behavior of some investors. Though they trade like stock, they are similar to sector funds and index funds in the construction of their portfolios.... Read More

Ask (Offer) - the price of the offer, the price you buy for.... Read More

To have a pre-disposition to buy and hold stocks for the long-term can be an extremely expensive frame of mind. The long-term market trend is up, but in a volatile stock market, the long-term gain is often laden with risk and not nearly as great as many short-term gains. Risk vs. return has greatly increased for the long-term stock market investor. People argue that tax consequences are their reason for holding. That argument lacks weight. It is very difficult for some people to break away from old habits and patterns of thinking about the stock market. Those who are unwilling to learn from market crashes are doomed to repeat the lesson.... Read More

Positive technical signals tend to precede good financial reports from a company. That is, the technical patterns precede and anticipate the fundamental reports. Stock price patterns reflect the buying and selling of all the people who have intimate knowledge about the company. The rest of the investment world creates the noise in stock behavior that accompanies the pattern created by those with knowledge. That is why sell strategies based on fundamentals are too slow in a volatile market.... Read More

“Timing the market” is considered by many to be a foolish exercise. Timing the market is indeed foolish if it is done the way many seem to think it is done. However, it is really a matter of having a good sell strategy or stop loss system coupled with a good buy strategy. Expert timers do not buy because they feel a stock is a “good” one to own, or sell because they feel it is “high.” They buy because there has been a buy signal, and they sell because there has been a sell signal.... Read More

There is always a chance that the stock will reverse direction just after it has triggered the stop loss, no matter where a stop loss is placed. We wanted to know if the amount of decline allowed by the stop loss affected the probability of a reversal immediately after the stock is sold. To answer this question, we computed the percentage of incidents (over a period of about 20 years) in which a drop of various specified magnitudes from a recent high was followed quickly by a resumed up-trend, rendering the sale unnecessary.... Read More