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How Does Technical Analysis Relate to Investing?
Technical analysis is the study of how securities prices behave and how to exploit that information to make money while avoiding losses. Basically, with technical analysis, you work to identify price trends [more…]
How to Draw a Market Profile
Structural theories — a category of technical analysis — include the broadest measures of market behavior, like seasonality. The most inclusive of the structural theories is market profile. [more…]
How Crowd Behavior Affects Investment Trading
Technical analysis involves identifying crowd behavior in order to join the crowd and take advantage of its momentum and direction. This is called the [more…]
Reading Market Sentiment — Bullish and Bearish
In technical analysis, sentiment comes in only two flavors — bullish (the price is going up) or bearish(the price is going down). At any moment in time, a bullish crowd can take a price upward or a bearish [more…]
Technical Analysis Tracks Trading Volume
Volume, the number of shares or contracts of a security traded in a period, is the most powerful confirming indicator of a price move, and confirmation [more…]
Using Technical Analysis to Track On-Balance Trading Volume
On-balance volume (OBV) is a running (cumulative) total of investment trading volume, calculated by adding the volume on days the price is higher than the day before and subtracting the volume on days [more…]
Examining Your Emergency Cash Reserves
Whether you have a substantial investment portfolio or haven’t started investing yet, you need to understand the fundamental building blocks of an investment portfolio. Keeping cash in hand to cover several [more…]
What Is Your Tolerance for Investment Risk?
When you think of risk in your investment portfolio, you may think of volatility (how much your investments go up and down). Most people do. However, risk is more accurately defined as the probability [more…]
Examining Your Investment Allocation
Your tolerance for investment risk is an important factor in deciding where you want to put your investment dollars, otherwise known as your portfolio allocation. [more…]
Improving Your Savings Rate
Knowing what you’re currently saving is an important part of making sure that you’ll achieve your financial objectives. What percentage of your gross income [more…]
How to Investigate a Business before Buying the Company
Research, observation, and common sense are powerful tools in the business valuation process. Here are some things to consider as you examine and analyze a company you want to buy: [more…]
How to Research Troubled Companies You Want to Purchase
Prospective buyers who are interested in purchasing a troubled company go through a due diligence process that involves gaining permission to see the business's operations. [more…]
Business Valuation For Dummies Cheat Sheet
If you’re considering buying a business, you will need to investigate the company to make an informed decision about the business's valuation. The valuation process involves research and observation — [more…]
How Financial Indexes Are Constructed
To help understand financial index changes, you should know how indexes are built. Indexes are not created equal (well . . . one is). Financial indexes are constructed in three different ways: [more…]
How Changing Stock Affects Indexes
A financial index is a measuring tool of prices for groups of stocks, bonds, or commodities. A change in one stock translates into index changes. Some examples are: [more…]
Trading Order Types
A variety of order types are available to you when trading stocks; some guarantee execution, others guarantee price. This brief list describes popular types of trading orders and some of the trading terminology [more…]
Charts Used for Tracking Investments
Price data is used in charts to give you a view of market trading activity for a certain period. The following list gives you the lowdown on some of the chart types you might encounter while you track [more…]
Reading Financial Reports for Profitability Ratios
You read financial reports to get a sense of a company’s financial position and how viable it is in the marketplace. You can test a company’s money-making prowess by using the following important formulas [more…]
Reading Financial Reports for Liquidity Ratios
If a company doesn’t have cash on hand to cover its day-to-day operations, it’s probably on shaky ground. As you read the financial report, use the following formulas to find out whether a company has [more…]
Reading Financial Reports for Cash Flow
You’re interested in a company, so you’re reading its financial reports. Part of the test of a viable operation is having enough cash to keep the company going. The following formulas give you various [more…]
Key Parts of an Annual Report
Reading a corporation's financial report is never the easiest thing to do, and annual reports can be especially daunting. You may be relieved to know that you don’t actually need to scour every page. The [more…]
Key Securities and Exchange Commission Reports
If you read financial reports on a regular basis, you know that the reports an organization files with the government are more extensive than the glossy reports it sends to shareholders. Although many [more…]
Reading Financial Reports For Dummies Cheat Sheet
If you’re looking at a business with an interest in investing in it, you need to read its financial reports. Of course, when it comes to the annual report, you don’t need to read everything, just the key [more…]
Reading List for Investors in the UK
Doing your research and knowing your subject before investing in shares is crucial. Here’s the literature that should be on your bedside table when investing in shares. [more…]
Looking at Four Important Parts of a Company’s Fundamentals
Knowing what aspects of a company to look at is crucial before you invest in shares. Cut through the jargon – this is what you should have in mind when inspecting a company’s performance. [more…]
