http://www.learning-to-invest.com/ Learning To Invest en ©2006 Learning to Invest http://www.learning-to-invest.com/Brutally-honest-analysis-of-yesterday--74.html Forex Journal If you have read my previous post you’re aware of what happened to US dollar. And without long speeches, I had 3 trades in one and 3 trades in another direction for the reasons brought out in my previous post. And as a result, I managed to get shut off by my stop losses in ALL of them. Thus ... http://www.learning-to-invest.com/USD-at-its-lowest-levels-of-2-years--73.html Forex Journal Of course, when I'm out to lunch (okay okay, I was having a beer) USD reached its 2 year lowest levels. GBP/USD currently trades at 1.9681 ( yesterday's price ca 1.9460)EUR/USD currently trades at 1.3258 (yesterday's price ca 1.3150)Anyways, we'll see what happens.UPDATEAt this state I have no ide... http://www.learning-to-invest.com/Testing-time-Day-3--72.html Forex Journal I checked what had happend during my sleeping time and I noticed the similar chart on both EUR/USD and GBP/USD. See this – See the beginning of the chart, Aroon gives heads up for BUY, %R gives heads up for BUY, RSI doesn’t show anything. On another chart, chart 3 the EMA’s give heads up... http://www.learning-to-invest.com/Testing-time-Day-2-UPDATE--71.html Forex Journal I wrote a post something like 4 pages, and then when I got to the end of it, I realized that this post really was a mess and instead, I’ll try to tell you about stuff in a bit shorter and simpler manner. Today I tried those 4 templates I brought out in my previous post, I used 15-min cha... http://www.learning-to-invest.com/Testing-time-Day-2--70.html Forex Journal Didn’t have time to update yesterday’s post so I’ll continue with this new one. I haven’t placed any trades yet but I have worked out 4 different chart templates with indicators on them to see if any of them work or could work after some changes. Template 1 This chart template uses 5... http://www.learning-to-invest.com/Testing-time-Day-1--69.html Forex Journal Okay, this is day one in my trading on my demo account. On that account I have currently $56. To follow the forex prices and to analyse the charts I will be using the free MetaTrader 4 software. All the charts available in this section will be generated with MetaTrader as well. During my trading I w... http://www.learning-to-invest.com/My-own-trading-plan--68.html Forex Journal In my previous post I talked about the general way the trading plan should be created for yourself. If you have read it, then you have seen that in order to create a good trading plan you do need to be pretty much 100% honest with yourself an usually you wouldn’t really like to share it with anyon... http://www.learning-to-invest.com/Technical-indicators---Aroon-ATR-CMO-ADX--67.html Technical analysis AroonThis is a technical indicator developed 10 years ago and can be used to find out if a stock is trending and how strong the trend is. It has also been designed to show the beginning of a new trend. It consists of two lines, upper aroon and lower aroon. It uses mainly just one parameter – time ... http://www.learning-to-invest.com/Creating-a-trading-plan--66.html General Creating your own trading plan is one of the most important things you will do before starting to trade. The second one would be following your plan at all times. First thing to do is to learn to know yourself, as this makes it easier to create a trading plan that actually would fit YOU. You need ... http://www.learning-to-invest.com/Results-of-the-trading-competitions-and-next-week--65.html General Simply put, the trading competition went straight to hell. Ok, it wasn't that bad, but during the 4 weeks the competition lasted I only traded on two days, altogether made 12 trades. Out of which 7 were winning trades and 5 were losing trades. Overally I produced no profit, but rather a small minu... http://www.learning-to-invest.com/Trading-rules---something-new-to-think-about--64.html General I have talked about money management and trading rules before. Now, instead of repeating the old things, here are some new things to consider. Making trades vs taking profitWhen making trades don't think about profit. Only think whether the certain trade would be a successful one. If you make the ... http://www.learning-to-invest.com/Forex-strategies-Short-term-strategy--63.html Forex strategies This strategy uses two charts - 10-minute chart and hourly chart; and 200-bar (200 hour, for example) MA and 4-bar slow stochastic study. To identify a trend you would look for situations where the price is consistanctly above or below the moving averages on both charts.Once trend has been identif... http://www.learning-to-invest.com/The-game-of-probabilities--62.html General In this post I have no intention to dive deep into this topic. However, I think it would be interesting to look at the market as a game of probabilities. Good poker players use the probability theory all the time. They know what is the % probability that one or another starting hand has won in the... http://www.learning-to-invest.com/What-can-you-learn-from-poker--61.html Money Management Poker and trading do have certain things in common and thus each of them can be studied or practiced in order to be better in the other one. You might not agree with it yet, but keep reading.DiversifiactionIn poker, your your capital you're using to play is called bankroll. Successful players neve... http://www.learning-to-invest.com/Elliot-wave---guidelines-for-wave-framework--60.html Technical analysis Lets go on with Elliot wave theory and talk about the guidlines of the wave framework. Guidelines for the wave frameworkWhile there’s just 3 rules in the wave theory, there are a number of guidelines than in theory should make our lives a lot more easier, but in practice make it all more confusing... http://www.learning-to-invest.com/Introduction-Elliot-Wave-Principle-amp--Fibonacci-ratios--59.html Technical analysis Now it’s time to cover Elliot Wave principle basics. Firstly, if you make your trading decisions based on chart patterns then these decisions should be supported by some form of probability analysis – how potential such a move is and when is it likely to happen. Elliot Wave theory all by itself is... http://www.learning-to-invest.com/What-does-Straddle-mean--58.html General If you’ve been learning about investing/trading but still without enough knowledge about it all, you probably have seen this term (straddle) mentioned in various places without actually knowing what it’s all about. Same here. But I think it’s good time to change that.Straddle is a strategy of opti... http://www.learning-to-invest.com/Forex-platform-review-Easy-Forex--57.html Platform reviews This is a new channel on this site and this is the first post to this channel. During my learning process I will most likely trying out a number of different trading platforms – both forex platforms, stock platforms and who knows, maybe something in addition as well. First platform I will review i... http://www.learning-to-invest.com/How-to-find-and-confirm-a-trend--56.html General In my past posts I have talked a lot about trends and that you should always buy or sell short in the direction of trend. What I have not talked about is how to actually identify an existing trend. In this post I will try to give you some idea how a trend existance can be confirmed. Firstly, what ... http://www.learning-to-invest.com/Different-look-into-trading-and-life-in-general--55.html General I’m a keen supporter of the idea that one should not depend on emotions when making business, poker or investing decisions. I’m also a firm believer that life doesn’t neccessarily need to be difficult nor bad. It’s the way you want it to be. Life’s the way you make it to be. I’m gonna talk about a... http://www.learning-to-invest.com/Introduction-to-Swing-Trading--54.html General Swing trading is a style of trading that tries to capture gains within 2 day to few weeks. So this is a short-term trading style where traders must act rather quickly in order to find potentialy big moves in stocks. This style is mainly used by individuals as large institutions can often not act t... http://www.learning-to-invest.com/Introduction-to-1-2-3-Trading-Method--53.html Forex strategies 1-2-3 trading signals can usually be seen in the beginning and in the end of a trend. You enter the trade after the 1-2-3 signal has been given. You can see an example of how it might look on the chart here:http://www.tradejuice.com/forex/forex-1-2-3-methode-mm.htmBasically the signal consists of ... http://www.learning-to-invest.com/More-trading-rules--52.html General Remember that keeping the big picture in mind is important. Big picture shows you that that there are times when you make small profit, times when you take small losses and also times when you take big profits. Keeping the big picture in mind helps you to remember that one losing trade is just one... http://www.learning-to-invest.com/Candlesticks-the-importance-of-Gaps--51.html Japanese Candlesticks Gaps can be very good trading signals OR they can be very powerful in making you lose. When reading this post keep in mind that I still don’t trade for real money myself and all this information is theoretical, but I will at some put all these knowledge’s to test. I do hope however that this post ... http://www.learning-to-invest.com/Sakatas-Method--method-of-Munehisa-Honma--50.html Japanese Candlesticks One of Sakata’s method baselines is that if you feel you could benefit from a certain formation, wait 3 days and if it still looks promising, enter the trade and you can most likely make profits. This method was developed by Munehisa Honma back in 1755 and has formed the bases of Japanese market p... http://www.learning-to-invest.com/Money-Management--49.html Money Management I’m very aware I have talked about this topic before as well. But I feel this is something that really needs to be talked about more than once, from different angles and then peferrably repeated every once in a while. I believe this is both neccessary to you as it is to me in order to become a suc... http://www.learning-to-invest.com/Candlestick-Continuation-Patterns--48.html Japanese Candlesticks To continue the candlesticks topic, lets now talk about candlestick continuation patterns. Upide & Downside Tasuki GapThere’s a gap between two candlestick with the same color (in the direction of the trend). The third candlestick opens within the second body and closes WITHIN the gap.Side by ... http://www.learning-to-invest.com/Forex-and-intermarket-analysis--47.html Foreign exchange Previously we have talked about intermarket analysis and how 4 major financial markets can influence each other. Now, just to repeat what we have already talked about and to talk more specifically about forex and what and how other markets influence it, I’m writing this post.Foreign exchange and E... http://www.learning-to-invest.com/Candlestick-Reversal-Patterns-III--46.html Japanese Candlesticks Lets go on with candlestick reversal patterns. Three inside up pattern (and three inside down pattern)This pattern is the confirmation for the Harami pattern. Here the first two candlesticks form the Harami and the third candlestick confirms Harami. The third candlestick should be closing higher t... http://www.learning-to-invest.com/Forex-strategies-The-Sidus-Method-EUR-GBP-and-EUR-USD--45.html Forex strategies In order to use the Sidus Method you need aproximately 1 hour (according to the author..) and a chart which has the following lines on it:18 EMA28 EMA5 WMA8 WMANote that EMA is Exponential Moving Average and WMA is Weighted Moving Average.The EMA’s will form a tunnel on your chart, these will show... http://www.learning-to-invest.com/Forex-strategies-Big-Ben-Strategy-GBP-USD--44.html Forex strategies Big Ben Strategy is a day trading strategy that takes advantages of the 24-hour trading possibility. It is meant to be used with GBP/USD mainly. According to that you should capture the first directional intraday move after the market opens in London (1am ET). The first big move will usually happe... http://www.learning-to-invest.com/Foreign-Exchange-Carry-Trades--43.html Foreign exchange Before going on with candlestick reversal patterns I’d like to talk about something different – forex and Carry Trades. Carry Trade strategy is a long term investment strategy in foreign exchange market. It is mainly used by hedge funds and investment banks. In simple words – it means playing with... http://www.learning-to-invest.com/Candlestick-Reversal-Patterns-II--42.html Japanese Candlesticks Lets go on with candlestick reversal patterns. To see the previously discussed patterns, check this. Abandoned babyGosh, people have really put great names to the patterns, haven’t they? Okay, going on now. This pattern looks pretty much the same as Morning and Evening Doji Stars, but the Doji her... http://www.learning-to-invest.com/Candlestick-Reversal-Patterns-I--41.html Japanese Candlesticks Candlestick patterns can consist of just one candlestick or couple of them, usually not more than six. Hammer and Hanging Man patternsThis is a one candlestick pattern with small body and long lower shadow (and no upper shadow). The hammer occurs in a downtrend and hanging man in the uptrend. The ... http://www.learning-to-invest.com/Introduction-to-Japanese-Candlestick-Charting--40.html Japanese Candlesticks Japanese Candlestick charting has really been with us for a while and that’s part of the technical analysis that, even if it’s some professional don’t use it, so far I have only heard and read good things about it. And I suppose this is due to the fact that it really is a really useful tool in tec... http://www.learning-to-invest.com/MACD-histogram--38.html Technical analysis Previously I have mentioned MACD indicator, now lets familiarize ourselves with MACD histogram. But before going there, remind yourself what MACD indicator was - „MACD is a variation of the price oscillator, it is calculated by taking the difference between two exponentially smoothed moving a... http://www.learning-to-invest.com/The-Three-Moving-Average-system--37.html Technical analysis This system is mainly used to find markets which should be avoided when trading with technical indicators because they are often unprofitable. Three oving average system helps to find entry and exit points which could be profitable.This system consists of 3 moving averages with different time peri... http://www.learning-to-invest.com/Technical-indicators-Williams-R-indicator--36.html Technical analysis Previously I talked about Parabolic SAR indicator and that it can be used with Williams %R indicator. It is similar to Stochastic Oscillator with the difference that Williams %R has upside down scale while Stochastic Oscillator has internal smoothing.What is Williams %R indicator? Williams %R indi... http://www.learning-to-invest.com/Technical-indicators-Parabolic-SAR-Stop-amp--Reverse--35.html Technical analysis Parabolic SAR is a very useful technical indicator during trending periods. However, it shouldn’t be used if there is no trending period. Trend periods exist approximately 30% of the time.In trending markets it provides useful entry and exit points. The name parabolic comes from its shape which is... http://www.learning-to-invest.com/Common-sense-trading-rules-Michael-Jenkins--34.html General In my previous post about Michael Jenkins and his theories I talked about his general theories (as much as I understood them). Here I would like to bring in some of his thoughts on common sense trading. While I do not neccessarily agree with all his weird theories, he does tell about different nua... http://www.learning-to-invest.com/Geometry-for-predicting-market-behaviour-Michael-Jenkins--33.html Technical analysis Michael Jenkins, in his book „The Geometry of Stock Market Profits. A Guide to Professional Trading for Living.” says that fear and greed are the main reason for price changes. He says that if we track day to day price movements, apply mathematical models to them, we can time highs and lows on the... http://www.learning-to-invest.com/Emotional-vs-rational-trading--32.html General First off, when making your trading decisions, stay away from your emotions. Decisions based on your emotions are hardly every right. If you have a strong gut feeling that a certain stock will go up or down then, unless it’s based on your analysis, forget about it. And even if you have made y... http://www.learning-to-invest.com/Competition-First-Days-thoughts--31.html PAPER trading Even though the competition started yesterday, I didn’t do any trades. Today I thought I’d try it out a bit. Firstly, I have another site where I have generated some industry stock lists and such...and while, let me be honest, the lists don’t really give too accurate information (in addition to th... http://www.learning-to-invest.com/Trading-competition-4-weeks--30.html PAPER trading Even though I'm not really trading yet, there's a local trading competition I have registered to take part from. It lasts 4 weeks, the start-up capital is EUR 10 000 and every trading day (20 days) EUR 1000 is added. The entrance to the competition costs around EUR 6 and there are prizes for the b... http://www.learning-to-invest.com/Bollinger-bands--29.html Technical analysis Bollinger bands are envelops that surround the price bars on a chart. Click here to see an example. Bollinger band consists of the middle band, upper band and lower band. Middle band is a simple moving average (N period), upper band is K times N period standard deviation above the middle average a... http://www.learning-to-invest.com/Relative-strengh-indicator---RSI--28.html Technical analysis What is RSI? RSI is a momentum oscillator that compares stock’s or currencies magnitude of recent gains with magnitude of recent losses. It ranges between fixed values – 0 to 100 (where values usually move between 30 and 70). RSI is based on ratio of the average upward movements and average downwa... http://www.learning-to-invest.com/Introduction-to-Intermaket-analysis-III---global-markets--27.html Intermarket analysis US stocks market vs international marketsWhen looking at trends in stock markets we need to realize that the stock market consists of thousands and thousands of different stocks and this means that even though the stock index is going in one direction, there’s always a great number of stocks that ... http://www.learning-to-invest.com/Introduction-to-Intermaket-analysis-II-related-markets--26.html Intermarket analysis Commodities and bondsCommodity prices are important thanks to being one of the main indicator of inflation. Commodity markets trend in the same direction as the treasury bond yields. That’s something important to understand and glue to the back of your head. Also that bond yields and bond prices t... http://www.learning-to-invest.com/Learn-to-do-your-maths--25.html General Before you get into actual investing, be sure to put down your expectations about possible ROI ( return of investment ). And most importantly, learn to do it right. I was just asking about the possibility of making 3% of your capital per day in one forum. The answer was that it’s not rea... http://www.learning-to-invest.com/Introduction-to-intermarket-analysis--24.html Intermarket analysis To bring out a new idea concerning technical analysis, new idea compared to what I have talked about so far, is intermarket technical analysis. What this really means is that ideally, all different markets should be examined together, not separately. Stocks, options, forex, bonds, in some ways the... http://www.learning-to-invest.com/Introduction-to-technical-indicators-II--23.html Technical analysis In Introduction to technical indicators I we talked about moving averages, now lets go on with Oscillators. OscillatorsOscillator is an indicator that is generally said to swing forward and backward within a certain area (minimum and maximum). Often the minimum value is 0 and maximum value 100. Wh... http://www.learning-to-invest.com/Introduction-to-Technical-indicators-I--22.html Technical analysis Technical indicators are basically mathematical formulas based on price activity. Technical indicators should be used together with chart patterns to get the best idea of what’s happening with a stock, currency or anything else and what sort of change could be expected. The primary input for techn... http://www.learning-to-invest.com/Recognizing-chart-patterns-II--21.html Technical analysis In my previous post I started talking about chart patterns , so...lets continue a bit. Head & Shoulders PatternNot to confuse with the shampoo – we are still talking about investing, trading, technical analysis which exists a lot due to human nature and psychology. So the next pattern we are l... http://www.learning-to-invest.com/Recognizing-chart-patterns-I--20.html Technical analysis Chart patterns can help you predict price movements because there are different cycles of buying and selling action in the market. In this post I will try to explane how to notice different patterns, how they look, what they are and how to recognize the main patterns on charts. Note that nothing i... http://www.learning-to-invest.com/More-on-volume-amp--OBV--19.html Technical analysis Before I have told you that volume does play an important role in price changes and the meaning of the changes. If the price changes and the volume is high compared to the usual then there’s a great chance the the price will go on changing in the same direction – volume increases in the direction ... http://www.learning-to-invest.com/Introduction-to-charts--18.html Technical analysis Charts are a very important part of technical analysis as a whole. There are different kinds of charts available – bar charts, line charts, candlestick charts, point and figure charts.Bar Chart is a vertical line on a graph where the bottom end of the line is the low price and top part is the high... http://www.learning-to-invest.com/Learning-from-winnings-AND-losses--17.html General Before going back to technical analysis I think we need to talk about dealing with losses (and winnings). I believe I will come back to this topis over and over again. Investing, trading and even gambling is in big part a psychological game. Can you stay focused if you are losing money? Can you le... http://www.learning-to-invest.com/What-are-sideways-movements--16.html General Sideway movements are movements where the price is pretty much the same and the changes are only rather small, where the prices change only within a few percentage area. Sideways movements can last anywhere between a week to couple of months and it can substitute a secondary trend. Once the price ... http://www.learning-to-invest.com/Importance-of-volume--15.html General Volume is also a very important factor in looking at the trends and such. Volume should increase in the direction of the primary trend. If the primary trend is present then the volumes should decrease during the counter-swings to the primary trend. Keep in mind though that volume is only the secon... http://www.learning-to-invest.com/Introduction-to-Dows-Market-trends--14.html Technical analysis There’s generally three types of market trends – Primary (major), Secondary and Minor. The Primary trend (major) is of most importance to long-term investors as this trend lasts a year or more. The secondary trend is a countertrend movement compared to the primary trend. This is often caused by bu... http://www.learning-to-invest.com/Bull-Market-and-bear-market--13.html General What is a Bull Market?Bull market is a market where people expect rapid increase in the value of their financial investments. Bull market is characterized by optimism, rising stock prices and belief that stock values will rise in short-term future. Bull market often comes after a lengthy decline. ... http://www.learning-to-invest.com/Who-is-Charles-Dow-and-why-should-you-know-him--12.html Technical analysis Charles Dow is the „inventor” of technical analysis. He is the co-founder of Dow Jones & Co. and its newspaper Wall Street Journal. Charles Dow published his market observations in the Wall Street Journal which were very helpful to readers.  Charles Dow also created the first stock market... http://www.learning-to-invest.com/Stock-background-search--11.html Stock market Over the next couple of posts I will be writing introductions about different technical analysis methods and charts, but for now some general information about stock background research.Start up by creating a list of potential stocks you’d like to trade ( whether buy or sell short ). Check if... http://www.learning-to-invest.com/Introduction-to-stock-options--10.html Options Options are usually known as a possibility to invest with rather low capital, in hopes of increase or decrease in stock value. Additionally, options make it possible to minimize your risks. An option gives the owner the Right (but not an obligation) to buy (call) or to sell (put) a certa... http://www.learning-to-invest.com/Forex---pips-spread-margin-leverage--9.html Foreign exchange Currencies are traded in pairs and exchanged against each other. The majority of currencies are traded against US Dollar. The first currency in the exchange pair is called Base Currency and the second currency is called the Counter Currency or Quote Currency.The exchange rate tells you how much of... http://www.learning-to-invest.com/Basic-introduction-to-Forex-trading--8.html Foreign exchange Forex trading in simple words means trading with currency. Forex, FX, Foreign exchange, it means trading with currency and right now it’s the fastest growing market in the world. Trillions of dollars are traded every day. The main players in this market are banks, investors, hedge funds and regula... http://www.learning-to-invest.com/What-is-Pattern-Day-Trading--7.html Stock market Before you start trading you should get familiar with different aspects and types of trading. And before setting your financial goals , there’s one important term you should know about - Pattern Day Trading. This term sets some limits to your day trading activities if you are starting with just a ... http://www.learning-to-invest.com/Signs-a-company-is-going-bankrupt--6.html Stock market When choosing stocks to buy, many of us like to think that the possibility of „our” company going bankrupt isn’t there. Probably that’s ALMOST true. But better safe than sorry, so you need to conduct some analysis from this perspective as well, here are couple of things you should note when checki... http://www.learning-to-invest.com/How-to-analyse-stocks-and-forex--5.html General For analysing stocks or currencies, two different analysis methods are used – technical analysis and fundamental analsysis. While I will go deeper into these subjects soon, here’s just a general overview for you.What is technical analysis? When you hear the term technical analysis then this means ... http://www.learning-to-invest.com/Which-online-trading-platform-to-choose--4.html General I apologise to those are now more interested in long-term investements and starting with sums $10k+ as when writing this I mainly consider my own possible portfolio size which will be anywhere between $1000 - $5000. But many things I mentioned here can be applied to bigger accounts as well.  ... http://www.learning-to-invest.com/How-do-I-set-my-financial-goals--3.html General I’ll tell you upfront – even though I’m not trading yet I know exactly what I want o achieve. And to many my goals might not sounds reasonable at all. Like mentioned in my previous post, I will most likely be day trading on both – stock market and foreign exchange and I expect to get a minimu... http://www.learning-to-invest.com/Investing-basics---think-before-you-act--2.html General Before starting investing you need to put on paper couple of very basic but at the same time very important things. Firstly – how much money do you have for investing? What is the initial sum you can afford to put into market? How much could you add to your investing portfolio every month? Whether... http://www.learning-to-invest.com/Learning-to-invest--1.html General Welcome to Learning-to-invest.com. It's a website meant to help everyone out there to learn investing - independent of whether you're interested in stocks or forex, whether long term or short term or day trading. Learning To Invest is sort of meant to be a blog. I have decided to learn to play on ...