Alternative Energy Stocks presents - 5 Things to Do in a Correction
Here on Alternative Energy Stocks we are pleased to present you with articles from our guest writers on a wide variety of alternative energy topics. We hope you enjoy this one:
5 Things to Do in a Correction
By Slav Fedorov
When the market stalls and rolls over, there is no shortage of predictions of what’s going to happen. The reality is: nobody knows. These things tend to feed on themselves. Sometimes the market will just shake off a bad spell and continue higher. Other times it will gradually succumb to the selling pressure and cave in. But you can’t tell in the beginning how long a correction will last or how bad it will get. How can you, if the market’s direction is shaped by future events that have not yet occurred?
So what can you do in a correction?
1. Sell early or don’t sell at all
You never know which stocks will correct and which will hold up. In a severe downturn, virtually all stocks will go down with the tide. One by one. Hoping that YOURS will buck the trend is a poor investment strategy. If you decide to tough it out, eventually the pain may become unbearable and you will sell at the bottom. Why? Because most people have similar pain thresholds which they reach more or less at the same time. After they sell, there are no more sellers left, and the market has nothing else to do but turn back up.
2. Watch for rotation
Every new leg up is powered by a new crop of leaders. A correction is often a rotation from one sector into the next. Institutions take weeks or even months to build and unwind positions. They also have to operate on a cash basis. If they are fully invested, they have to sell first before buying something else. In a stampede they sell all at once, often the same stocks, depressing prices and causing severe breaks in the market. Why shouldn’t they? The managers all went to the same schools, studied the same economics, read the same papers, and watch the same CNBC. But institutional selling has a silver lining (for them): it depresses the prices of ALL stocks. So when they are finally ready to deploy the cash, institutions can get a good price on the new positions.
Rotation is one of the reasons you should take your profits regularly. If you buy and hold, you risk getting stuck with past leaders that will languish for years, or, worse yet, break down, while the new ones pass you by.
3. Determine who your friends are going forward
These days it does not take long to buy or sell a stock. After you lock in your profits (or save your shirt) most stocks will go down in a correction. Some WILL buck the trend and go higher. Don’t let the exception negate a sound rule. You don’t know which stocks will hold up. But the ones that do are likely to do well in the next leg up. If you have to buy them back higher, consider it the cost of insurance. Smaller gains are still better than losses.
Another thing that happens in a correction is that breakouts dry out. But the good stocks, like the good businesses they represent, don’t vanish. They just wait. So should you. The longer the base, the stronger the eventual breakout.
4. Keep your powder dry
If you try to buck the trend, you will get burnt. You will feel frustrated and exhausted by the time you SHOULD be getting back into the market. If, on the other hand, you wait out the correction in cash, you will be ready for action way ahead of the crowd.
5. Short/hedge
The alternative to cash is shorting. There are good longs and good shorts, but to my knowledge few are equally good at both. But you can always use a short ETF just like you would any other long position.
Slav Fedorov is a full time stock trader and founder and managing member of TradingZoom, LLC - a provider of timely stock picks in small caps based on proprietary selection methods.
http://www.tradingzoom.com/
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Alternative Energy Stocks presents - What is the Best Site For Free Stock Charts?
Here on Alternative Energy Stocks we are pleased to present you with articles from our guest writers on a wide variety of alternative energy topics. We hope you enjoy this one:
What is the Best Site For Free Stock Charts?
By Michael Cherniawski
When you’re looking for the best site for free stock charts, its good to ask yourself: What do you really need out of your charts? Its easy to get sucked into a website because of its eye-catching design or friendly sales pitch, however the biggest question is if its really going to provide you with what you need to make your investing more profitable.
For myself, I’ve created a set of parameters that I apply whenever I evaluate a new stock service or subscription online, free or not. Even though something may be free, it still can end up sucking up your time, which is in fact the most precious commodity you have.
First off, I always make sure that the site I’m looking for has free quotes in real time. This is especially important when I’m following a stock based on news-related items. If you’re trading off of quotes that are delayed by up to 20 minutes on average or more, then you can get yourself in big trouble in this volatile market.
Secondly, I need to make sure that the software I am going to use has all of the tools and indicators I know I will need for successful trading. I’ve been using on line charting services for over 12 years, and unfortunately I’ve wasted a lot of time on services (not even free ones at that!) that promised certain abilities that they were never able to follow through on.
Lastly, the free stock charts service I use better have the ability to save my charts and templates so that I can take notes and come back to my charts later without having to start all over again at square one. This last one is critical. There are services out there where you might be able to make a great one-off chart, but how will you know what you were thinking later when it comes time to take action on that stock if you can’t save it?
All this being said, how do you go about finding the best free stock charts service? I’ll tell you, I’ve already searched through the first 5 listings on Google and none of them fulfill the 3 requirements I have above. I found my new free charting service at http://www.AmericanStockMarket.info All I had to do was register for free at their site and I was instantly able to do everything that I needed with my stock charts! While I utilize a more expensive service at home, this free service is great for being on the road or checking my stock charts while traveling.
Article Source: http://EzineArticles.com/?expert=Michael_Cherniawski
http://EzineArticles.com/?What-is-the-Best-Site-For-Free-Stock-Charts?&id=2290496
Alternative Energy Stocks presents - Why Chart Patterns Make a Good Strategy
Here on Alternative Energy Stocks we are pleased to present you with articles from our guest writers on a wide variety of alternative energy topics. We hope you enjoy this one:
Why Chart Patterns Make a Good Strategy
By Shaun Rosenberg
Chart patterns make a good strategy in the stock market. They have been proven effective many times in the past. Chart patterns work because:
1. Stocks Are Emotional
The majority of the people who invest in the stock market let their emotions be their guide. No one intends to make their financial decisions with their emotions, but if you are not prepared for it, it will play a big role in your trading.
This in turn makes the moves stocks make pretty emotional as well. And because chart patterns work with breakouts there is a lot of emotional participants out there willing to buy it and force it to go up.
2. Many traders Use it
There is a reason why many traders use chart patterns, they work. Once more because chart patterns are so widely used they tend to work better. The more people who use a strategy the better it tends to work.
3. It gives you a point to buy
You can do a lot of analysis on a stock to tell you what a good buy is and what is not, but that does not necessarily give you the best point to buy. Chart patterns on the other hand tell you exactly when to get into the trade so you can get in as it makes its move. Rather than just buy a stock and watch it go up and down
for months, or years before it starts to take off.
4. It Helps you cut your losses short
Cutting your losses is one of the keys to being successful in trading. You do not simply want to spend all your
money buying a stock and just hoping that it does not go all the way to $0. If a stock falls back into the pattern it is a good sign that the pattern has failed and will probably fall further. So getting out early can save you from taking a huge loss.
For more on chart patterns visit http://www.stocks-simplified.com/chart_patterns.html
For more on Technical analysis visit http://www.stocks-simplified.com/technical_analysis.html
Article Source: http://EzineArticles.com/?expert=Shaun_Rosenberg
http://EzineArticles.com/?Why-Chart-Patterns-Make-a-Good-Strategy&id=2353060