Online Stock Trading Tips

Support and resistance is the most successful trading strategy. Yet this very simple means of trading is actually overlooked by most traders. The primary reason is that they do not know how to effectively find the support and resistance of specific stocks. This tutorial will teach you completely how you can be able to accurately determine the support and resistance levels for different trading time-frame.

Fact1: Different Support and Resistance levels exist for different time frame. For example if you are a day trader, you should also be looking at the support and resistance levels of that stock in a daily chart. If you trading based on monthly charts, you should also be looking for the support and resistance for the monthly/yearly chart, so on and so forth. For each of these time frames; you can have different support and resistance values which you should keep in mind. Some support and resistance basics:

Support: The lowest price possible for the stocks in a specific time frame where there are more willing buyers than sellers. It cannot go down further since the presence of buyers in this level is greater than the sellers. Thus the only direction for this price is to go up.

Resistance: The highest price possible for the stocks in a specific time frame where there are more willing sellers than buyers. It cannot go further up since the presence of sellers in this level is greater than the buyers. Thus the only direction for this price is to go down.
(more…)

Contrary to popular belief that stock trading is complex and unpredictable that it needs sophisticated mathematical tools; this is not entirely true. Mathematics for stock trading should be as simple as possible using no more than algebra! These mathematical tools are very important during the stock selection process, money management and managing your trades. Bookmark, share this article and link to this tutorial so that other beginning traders will know. If something is missing in those formulas, feel free to contact me and I will add that. Let’s start summarizing what are these important mathematical principles that you need to know:

1.) Computing the total amount of investment required:

Total investment = Price per share X Total number of Shares

This is really simple. If the price per share is $10 and you would like to buy 100 shares. So the total investment required (excluding commission):

Total investment = $10 x 100 = $1000

2.) PEG Ratio – valuing the stocks whether it is good or not.

PEG Ratio – (P/E ratio)/(Growth Rate)

It is simply equal to P/E ratio divided by the growth rate. Growth rate is equal to:

Growth rate = (Earnings per share(current) – Earnings per share(one year ago))/Earnings per year(one year ago)
(more…)