Online Stock Trader

Archive for August, 2009

There probably thousands definitions of penny stocks. The Securities & Exchange Commission (SEC) definition states that a penny stock is any stock with a value less than $5.

This is by no means a universal definition. Other definitions include stocks valued at less than $1. Lastly, any stock that is traded on pink sheets or over-the-counter bulletin board (OTCBB) is widely considered to be a penny stock.

Choosing a broker

Choosing a the right online penny stock brokerage is very important. As penny stock traders often buy a large number of stocks (due to the low price), it is important to choose a penny stock brokerage that has a commission structure that is favourable.

For example, some stock brokers charge a fee for each share purchased as well as a flat rate per trade. Clearly, this could be very costly if you were purchasing large quantities of penny stocks.

Ideally the best brokerage is one with no fees additional fees for purchasing large numbers of shares, a low price per trade and quick execution of trades.

Volatility

Penny stocks can often be highly volatile, offering the opportunity for high returns. Fluctuations of 100% can be seen in a matter of days with certain penny stocks.

Whilst this can clearly result in outstanding returns, it is important to consider the other possible outcome. insane volatility can result in mammoth losses very quickly.

It is very important to fully understand the risks when investing in penny stocks. Most traders do lose cash trading penny shares. Solid risk management is a must.

Penny stocks are not for the faint hearted and are generally only appropriate for investors with a very high risk tolerance.

Cheap to buy

Due to the relatively low cost of penny stocks, they are more affordable to a far wider range of investors. This is a definate advantage if you only have a little amount of money to risk.

Do you want to potentially increase the success rate of your stock trading? Then read this quick Stock Assault 2.0 review.

Stock Assault 2.0 is advanced A.I. stock investing software that works similiar to the human brain. The stock market software actually uses artificial intelligence to produce customized results for each user increasing the potential effectiveness of your investments.

The Stock Assault 2.0 program will work anywhere in the world for anyone with a brokerage account, and the program tells you the steps needed so it doesn’t require investing know-how (though it is good to be educated about investing).

Using Stock Assault 2.0

Getting started is pretty easy. Once you install the software, you can begin investing with these 3 steps:

1. The system processes live stock data that gives you your stock picks.
2. You buy the stock picks from any brokerage of your choice.
3. The system keeps tracking the pick and will tell you exactly when to sell.

Benefits of Stock Assault 2.0

1. The software’s advanced A.I. will make you feel like you had inside info.
2. Works worldwide, all you need is any brokerage account.
3. You don’t have to be very knowledgeable about investing because the software takes you by the hand.
4. Fool-proof programming adapts to any market condition giving you the edge no matter what.
5. You can invest in stocks like the professionals do straight from your house.
6. All you need is $50-100 to invest in the first stock pick then use your profits for the next pick.

Final Conclusion

Stock Assault is a product worth trying because it gives you the freedom to invest in stocks at your own pace. Without advanced skills or major capital, you can potentially make good stock market investments based on the software’s artifical intelligence. You also get access to a chat room and updated blog offering the latest info from professional stock traders and stock analysts.

One of the most popular technical analysis indicators is the simple moving average also known as SMA, if you learn how to use these correctly they can be a very useful tool to help you to make good trading decisions.

The 50 simple moving average, or 50 SMA, is simply the sum of the last 50 readings for each period, divided by 50, this is a moving window, as time moves on so does the average. Notice that I used the word period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 15 minute and on whatever time period you want to monitor and trade. Although the SMA is the most widley used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a slightly faster average that many traders prefer.

The reality is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you trust your chosen indicator then a slight difference in its value.

The SMA is oftern used to determine what the trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are most useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to not trade.

The general rule is that if the chart price is above the SMA the trend is up, if below the trend is down. This is very important to understand because it forms the basics of trend trading and trading with the trend.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, this is really just common sense when you think about it.

Moving averages can often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mostly applies to the daily and weekly charts. A lot of big players in the markets, the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 SMA it may move to the 50 before finding some support or resistance.

A844534297