Charts Stock Market Quotes

RANDOM-WALK AND ACTUAL STOCK-MARKET CHARTS

If you chart the gambler’s fortunes over time, what you find is the gambler wins for a period, or loses for a period. In other words, everything in the world goes in streaks. It’s a real phenomenon, and you see it everywhere: in weather, in river flooding, in baseball, in heart rhythms, in stock markets. Once things go bad, they tend to stay bad. Like the old folk saying that bad things come in threes. Complexity theory tells us the folk wisdom is right. Bad things cluster. Things go to hell together. That’s the real world.

To summarize this pattern: when the market opens, the stock will make a new high of the day but sell off quickly. You do not want to jump into the trade yet, not until it consolidates around a trading level such as the low of the pre-market, or moving averages on a daily or 5-minute chart. As soon as the stock is coming back up with heavy volume, that is the place that you take the trade to the long side. The entry signal is to see a new 1-minute or 5-minute high after the consolidation with MASSIVE volume only. You have to remember that the volume on the way up needs to be significantly higher than previous candlesticks.

Basically, Graham breaks the art of investing down into two simple variables – price and value. Value is what a business is worth. Price is what you have to pay to get it. Given the stock market’s manic-depressive behavior, numerous occasions arise where a business’ market price is distinctly out of line with its true business value. In such instances, an investor may be able to purchase a dollar of value for just 50 cents. Note that there is no mention here of interest rates, economic forecasts, technical charts, market cycles, etc. The only issues are price and value. I should also note that Graham emphasizes a large margin of safety. The strategy is not to buy a dollar of value for 97 cents. Rather, the gap should be dramatic so as to absorb the effects of miscalculation and worse-than-average luck.

To illustrate this point, let’s think about the sky. When our ancestors originally studied the sky above them, they saw what appeared to be a random mass of stars. As they continued their observations, however, they came to realize that specific patterns of stars were always present. And not only were they always present, they were also so consistent that people could actually establish calendars and chart navigation based on those patterns. Of course, we know now that the sky is not random. It is based in the forces of gravity. The point that I am trying to make is that this is quite similar to the stock market. Prices go up and down, and anything can happen at any moment, but there are certain patterns that show themselves over and over again. And the good news for traders is that there's a good chance you can actually make money by recognizing those trading patterns.

To oversee all the details yourself in person; to be at once pilot and captain, and owner and underwriter; to buy and sell and keep the accounts; to read every letter received, and write or read every letter sent; to superintend the discharge of imports night and day; to be upon many parts of the coast almost at the same time—often the richest freight will be discharged upon a Jersey shore;—to be your own telegraph, unweariedly sweeping the horizon, speaking all passing vessels bound coastwise; to keep up a steady despatch of commodities, for the supply of such a distant and exorbitant market; to keep yourself informed of the state of the markets, prospects of war and peace everywhere, and anticipate the tendencies of trade and civilization—taking advantage of the results of all exploring expeditions, using new passages and all improvements in navigation;—charts to be studied, the position of reefs and new lights and buoys to be ascertained, and ever, and ever, the logarithmic tables to be corrected, for by the error of some calculator the vessel often splits upon a rock that should have reached a friendly pier—there is the untold fate of La Prouse;—universal science to be kept pace with, studying the lives of all great discoverers and navigators, great adventurers and merchants, from Hanno and the Phoenicians down to our day; in fine, account of stock to be taken from time to time, to know how you stand.

To summarize the strategy: An Angel is a low float Stock in Play which is gapping with heavy volume in the pre-market. At the market Open, our Angel makes a new high of the day but sells off quickly. You do not want to jump into the trade yet, not until it consolidates around an important trading level such as the low of the pre-market, or moving averages on your daily or 5-minute chart. This is where our Angel will have fallen to. As soon as the stock is coming back up with heavy volume, that is the place you take the trade to the long side. The entry signal is to see a new 1-minute or 5-minute high after the consolidation with MASSIVE volume only. You must remember that the volume on the way up needs to be significantly higher than previous candlesticks. The stop loss is below the consolidation period. The profit target can be (1) VWAP, (2) the then high of the day, (3) the high of the pre-market, and (4) any other important level nearby such as Y High or Y Low. If you don’t see an obvious support level and consolidation, do not trade the stock. If you see a breakout but it does not have strong volume, do not trade the stock. Fallen Angel is generally a difficult strategy to trade, especially since it is difficult to manage the risk in. You will have seen in the above examples that most of the drops are sharp, and if you are not quick in getting out of a losing trade, you may get stuck in a very bad position and be forced to accept a heavy loss. Remember, these stocks often gapped up significantly and can lose the majority of their gap during the day, so holding them during the day may not be a good idea, especially if volume is dropping during the day. I recommend trading this strategy in the simulator for some period of time before trading it live. When you go live, make sure to take small size. I know, it is easy to take a 10,000 share on a $1 stock, but remember, every cent up and down in a $1 stock is the equivalent of a 1% swing in your position. I usually take 4,000 shares for low float stocks below $10.

To summarize my ORB Strategy: After I build my watchlist in the morning, I closely monitor the shortlisted stocks in the first five minutes after the Open. I identify their opening range and their price action. How many shares are being traded? Is the stock jumping up and down or does it have a directional upward or downward movement? Is it high volume with large orders only, or are there many orders going through? I prefer stocks that have high volume, but also with numerous different orders being traded. If the stock has traded 1 million shares, but those shares were only ten orders of 100,000 shares each, it is not a liquid stock to trade. Volume alone does not show the liquidity; the number of orders being sent to the exchange is as important. The opening range must be significantly smaller than the stock’s Average True Range (ATR). I have ATR as a column in my Trade Ideas scanner. After the close of the first five minutes of trading, the stock may continue to be traded in that opening range in the next five minutes. But, if I see the stock is breaking the opening range, I enter the trade according to the direction of the breakout: long for an upward breakout and short for a downward move. My stop loss is a close below VWAP for the long positions and a break above VWAP for the short positions. My profit target is the next important technical level, such as: (1) important intraday daily levels that I identify in the pre-market, (2) moving averages on a daily chart, and/or (3) previous day close. If there was no obvious technical level for the exit and profit target, I exit when a stock shows signs of weakness (if I am long) or strength (if I am short). For example, if the price makes a new 5-minute low, that means weakness, and I consider selling my position if I am long. If I am short and the stock makes a new 5-minute high, then it could be a sign of strength and I consider covering my short position. My strategy above was for a 5-minute ORB, but the same process will also work well for 15-minute or 30-minute ORBs.

some small counting house on the coast, in some Salem harbor, will be fixture enough. You will export such articles as the country affords, purely native products, much ice and pine timber and a little granite, always in native bottoms. These will be good ventures. To oversee all the details yourself in person; to be at once pilot and captain, and owner and underwriter; to buy and sell and keep the accounts; to read every letter received, and write or read every letter sent; to superintend the discharge of imports night and day; to be upon many parts of the coast almost at the same time—often the richest freight will be discharged upon a Jersey shore;—to be your own telegraph, unweariedly sweeping the horizon, speaking all passing vessels bound coastwise; to keep up a steady despatch of commodities, for the supply of such a distant and exorbitant market; to keep yourself informed of the state of the markets, prospects of war and peace everywhere, and anticipate the tendencies of trade and civilization—taking advantage of the results of all exploring expeditions, using new passages and all improvements in navigation;—charts to be studied, the position of reefs and new lights and buoys to be ascertained, and ever, and ever, the logarithmic tables to be corrected, for by the error of some calculator the vessel often splits upon a rock that should have reached a friendly pier—there is the untold fate of La Prouse;—universal science to be kept pace with, studying the lives of all great discoverers and navigators, great adventurers and merchants, from Hanno and the Phoenicians down to our day; in fine, account of stock to be taken from time to time, to know how you stand. It is a labor to task the faculties of a man—such problems of profit and loss, of interest, of tare and tret, and gauging of all kinds in it, as demand a universal knowledge. I have thought that Walden Pond would be a good place for business, not solely on account of the railroad and the ice trade; it offers advantages which it may not be good policy to divulge; it is a good port and a good foundation. No Neva marshes to be filled; though you must everywhere build on piles of your own driving. It is said that a flood-tide, with a westerly wind, and ice in the Neva, would sweep St. Petersburg from the face of the earth. As this business was to be entered into without the usual capital, it may not be easy to conjecture where those means, that will still be indispensable to every such undertaking, were to be obtained.

The average bull market runs about 165 weeks or roughly 3 years and the average gain is about 131 percent. As we can see from the charts below, this bull market is now over 260 weeks in length or the 2nd longest on record.

A trader named Chuck Zion took an interest in Sam. Known as Brown Bear, Zion showed Israel how to be a “paper trader.” Following a matrix of three hundred companies, Israel learned to track the price movement of shares so that he could recognize characteristics. “Brown Bear made sure I was doing it every day, not being lazy and wasting his time,” Sam recalled. “He was giving me a gift. Once you know the price range of a share, you get a chart in your head. You know if the stock is streaking. You know if it is tanking. Each stock has characteristics in the way it trades. Knowing the price of a stock was like dating a girl. How well do you know her? What does she like to do? What’s her mood today?

Charts hold all the secrets to the stock market and to each stock. They are like an ECG. They accumulate every thought, every action and every move of every buyer and seller and put it neatly on a single chart for your visual delight

If the mood of the market is negative on a stock, no amount of “fundamentals”, or your opinion about the “fundamentals”, will get the stock to move up.

A market’s rally has its origins in extreme pessimism among investors about the market’s and economy’s prospects. There is a feeling that “the world is going to end.” Stocks cannot find buyers at any price at this stage. This is perhaps the best time to buy on “fundamentals” or buy “mispriced” stocks. Because there is no buying interest, stocks drift lower and even small amounts of selling create severe underpricing in the stock.

To buy on a rising market is the most comfortable way of buying stocks. Now, the point is not so much to buy as cheap as possible or go short at top prices, but to buy or sell at the right time.

You don’t have to trade everyday. There will be days when you don’t find a trade which has low risk. Spend those days reviewing charts and seeing if you missed any stocks with a trend. Then there will be days where you will find dozens of stocks to trade. On those days, go for the big profits.

We “want” the stock to go our way. That is a very dangerous feeling. It is a feeling that may not match with the market’s mood. And in a battle between the market’s mood and our feelings, the market will always win.

And this move came when the overall market fell over 5% in the same week. Does it matter what stock it is? The short term trend is clear. A stop loss is critical in a move like this since the price can reverse course at any time. Given the intensity of the move the stop loss has to be far away from the price. If

If charts are of high integrity, i.e. large volumes, large market capitalisations, large number of investors with no large holders of stocks, you have to look for uptrends and downtrends to trade. And, you have to stick to supports and resistances. If the charts are of low integrity, trade them only when there is an accumulation in process. During periods of accumulation, gains will be exponential.

Avoid trading stocks based on TV and other media recommendations. Most analysts have their own agenda in pushing a stock, especially if the stock is one with a low volume and low market capitalization. Putting

Gaps can be caused by news of a nature that the market or the stock did not anticipate, or a large sale or purchase of the stock by an institution or another large investor. Gaps

Position Trading Position trading works best for traders who can’t spend the whole day trading. Position trades are taken on the larger trend in the market or a stock, and may last many days or even several months. The critical aspect of position trading is to always keep a stop loss and adjust the stop loss as the stock moves. That takes care of any sudden jolts to the stock which may be of a significant nature.

If you bought the stock when it was at its peak, chances are you not only lost your money but you got put off with the markets forever. First,

never try to predict or anticipate. I only try to react to what the market is telling me by its behaviour. I believe there are no good stocks or bad stocks; there are only money making stocks. So there is no good direction to trade, short or long; there is only the moneymaking way to trade. Greed, fear, impatience, and hope will all fight for mental dominance over the speculator.” — Jesse Livermore

The stock market has four trading points, namely: “O” or opening price, “C” or closing price, “H” or highest price for the day, and “L” or lowest price for the day. You'll see all of these points while you're looking at a chart.

In most cases, charts display an additional variable called “V” or volume. This variable specifies the number of traded shares during the day.

During trading hours, trade either from a closed room where there is no disturbance, or from your office. Don’t take calls and don’t seek opinions about stocks once the trading day begins. Get a brokerage account with a terminal where you can pull out all charts of all kinds of time periods, namely day charts, weekly charts.

Don’t read too many research reports and newspaper articles. If a chart does not show an increase in price and an increase in volumes even if there is excessive good news, it is likely the news is not as great as it has been made to sound. If a chart shows increase in both price and volumes, even when no one seems to notice the stock, you can be sure something is causing the stock’s price to rise with rising volumes over a period of time.

Gold is often sought as a refuge during times of financial travail. True to form, the price of the precious metal more than tripled in the 1999-2009 decade. But gold is largely a rank speculation, for its price is based solely on market expectations. Gold provides no internal rate of return. Unlike stocks and bonds, gold provides none of the intrinsic value that is created for stocks by earnings growth and dividend yields, and for bonds by interest payments. So in the two centuries plus shown in the chart, the initial $10,000 investment in gold grew to barely $26,000 in realterms. In fact, since the peak reached during its earlier boom in 1980, the price of gold has lost nearly 40 percent of its real value.

The best investors don’t get persuaded by stock blips or charts. It’s about staying ahead of the curve—anticipating changes in sentiment. You’ve got to anticipate what newspaper headlines will say next.

This kind of herd behaviour can be highly contagious and highly uncertain. And it explains the unpredictability not only of the next chart-topping song but also of next summer’s fashion craze—not to mention the ‘animal spirits’ driving boom and bust in stock markets—revealing the strength of social networks in shaping our preferences, purchases and actions.

I want to make sure that the stock is trading above its 50-day moving average; and that the 50-day moving average is above the 200-day moving average. That looks something like this: This is a chart of The Trade Desk (TTD). The upper line is the 50-day moving average, and the lower line is the 200-day moving average. When a stock looks like this, you know that it is in an uptrend.

As a day trader, you shouldn’t care about companies and their earnings. Day traders are not concerned about what companies do or what they make. Your attention should only be on price action, technical indicators and chart patterns. I know more stock symbols than the names of actual companies.

Charts plus earnings will help you tell the best stocks and general markets from the weaker, riskier stocks and markets that you must avoid altogether.

Pick a place on the chart where the stock should clearly never go, if you are correct about the trade. That is where you should place your stop.

Look for strong price signals: channel breakout, head-and-shoulders, good range trades. (I used to include Golden Cross, but it let me down once too often. Maybe I should give it another try, as that was a few years ago.) Always confirm the price signal with another indicator (RSI or volume). If in doubt check a third indicator. If that is not conclusive, don't trade. Ensure the potential profit is at least 2x the stop-loss level, 3x or more if possible.  Trade in lots of [5% my portfolio size]. Place the stop-loss at the same time as the order. Do not ever, ever break these rules. The market can stay irrational longer than you can stay solvent. If you can't find a trade, don't try to make one.

Ed Seykota: "Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them 'funny-mentals.' I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.

fundamental analysts focus their attention on company finances and economic data about industries for which the stocks trade (also known as industries). They are concerned with factors like corporate earnings reports, profit margins, unemployment rates, and gross domestic product (GDP) growth rates. They examine these economic factors to determine how they will affect the demand and supply of a particular stock.

Technical analysis is more concerned with the price movements of a stock or an index by examining historical records of trading activity. A technical analyst looks at past data to predict future price movements. They believe that history tends to repeat itself in the stock market and that past performance is the best indicator of what will happen in the future.

Haramis.” Harami, meaning a “sinner, thief, someone born illicitly.” The word carries a lot of meaning and the Iranians adopted it as well from the Arabic language. Tara was unzipping her suitcase, ready to take some clothes to take a shower. “Tell that to a trader and he might get a chuckle out of what you said,” Tara said. “Huh?” Amir had no idea what she meant. “The word harami, it’s a candlestick pattern.” “A candlestick pattern? What are you talking about?” Amir was now even more dumbfounded. “I was bored one day so I read and learned about trading. Stock trading,” Tara said as she started to take a set of clothes out of her suitcase. “Candlestick charts are patterns used by traders to look at price movements in stocks and stuff.” She closed her suitcase up and looked up at Amir. “Harami is a candlestick pattern. It means “skirt steak” in Japanese but it also derives its meaning from the word pregnant. And it basically shows one candlestick engulfing a smaller one. A pattern for traders to analyze which direction the stock or security will go.

The head of research for Sesame Street in the early years was a psychologist from Oregon, Ed Palmer, whose specialty was the use of television as a teaching tool. When the Children's Television Workshop was founded in the late 1960s, Palmer was a natural recruit. “I was the only academic they could find doing research on children's TV,” he says, with a laugh. Palmer was given the task of finding out whether the elaborate educational curriculum that had been devised for Sesame Street by its academic-advisers was actually reaching the show's viewers. It was a critical task. There are those involved with Sesame Street who say, in fact, that without Ed Palmer the show would never have lasted through the first season. Palmer's innovation was something he called the Distracter. He would play an episode of Sesame Street on a television monitor, and then run a slide show on a screen next to it, showing a new slide every seven and a half seconds. “We had the most varied set of slides we could imagine,” said Palmer. “We would have a body riding down the street with his arms out, a picture of a tall building, a leaf floating through ripples of water, a rainbow, a picture taken through a microscope, an Escher drawing. Anything to be novel, that was the idea.” Preschoolers would then be brought into the room, two at a time, and told to watch the television show. Palmer and his assistants would sit slightly to the side, with a pencil and paper, quietly noting when the children were watching Sesame Street and when they lost interest and looked, instead, at the slide show. Every time the slide changed, Palmer and his assistants would make a new notation, so that by the end of the show they had an almost second-by-second account of what parts of the episode being tested managed to hold the viewers' attention and what parts did not. The Distracter was a stickiness machine. “We'd take that big-sized chart paper, two by three feet, and tape several of those sheets together,” Palmer says. "We had data points, remember, for every seven and a half seconds, which comes to close to four hundred data points for a single program, and we'd connect all those points with a red line so it would look like a stock market report from Wall Street. It might plummet or gradually decline, and we'd say whoa, what's going on here. At other times it might hug the very top of the chart and we'd say, wow, that segment's really grabbing the attention of the kids. We tabulated those Distracter scores in percentages. We'd have up to 100 percent sometimes. The average attention for most shows was around 85 to 90 percent. If the producers got that, they were happy. If they got around fifty, they'd go back to the drawing board.

Under moving average, change the numbers so that you have 10 for 10 weeks, and 40 for 40 weeks. After you input this information, update the chart and decide which stage the market is in. When you are starting out, it is best to only buy stocks when the general market is in Stage 2.

write to Securities Research Company, 27 Wareham Street, #401, Boston, MA 02118, and purchase one of the company’s long-term wall charts. Also, in 2008, Daily Graphs, Inc., created a 1900 to 2008 stock market wall chart that shows major market and economic events.

Highly profitable stocks only beat the market if Buffett’s moat protects the profits. Without the moat, highly profitable stocks will get beaten up by the competition. Mean reversion acts on profits to drag down winners and push up losers. Investors should use some common sense and natural skepticism about profit charts that march all the way to heaven.

Before we analyze charts and look for stocks to buy or sell, let’s explore several basic questions: what markets to trade, how to manage risk and why keep a trading journal.

Entry and exit points are vital parts of trading and investing. That is worth repeating.  Entry and Exit points are vital parts of Trading and Investing. Whether you are Day Trading, Swing Trading, or are a Long Term Investor. Why would you ever buy a stock at the wrong time? Unfortunately, there are many market participants with no training that do it every day.

Entry and exit points are vital parts of trading and investing. That is worth repeating.  Entry and Exit points are vital parts of Trading and Investing. Whether you are Day Trading, Swing Trading, or are a Long Term Investor. Why would you ever buy a stock at the wrong time? Unfortunately, there are many market participants with no training that do it every day. The Pros love the uninformed, the novices, and the Pigs. Who else are they going to sell to when a stock has reached a resistance point, or reached an all time high? You guessed it. They are going to sell to the novices and the pigs who are hoping for more advance. Then when the stock drops, falls to support, or finds support somewhere, the Pros will buy it back from the novice who has just taken a loss and a beating. “The time to buy is when blood is running in the streets” ~Baron Rothschild

Creating an algorithmic trading system should be every trader's goal. Yet, developing a trading system can be overwhelming since it involves several moving parts. Another challenge is that today's markets require an algorithm that adapts to different market conditions. In "Algorithmic Trading 101" Jacinta Chan sets you up by starting with the basics and walking you through the process, step-by-step. She touches on all aspects of a trading system. After going through the entire process detailed in the book, the trader will be ready to develop a customized trading system that follows the principles of professional traders." Jayanthi Gopalakrishnan,  Director, Site Content  StockCharts.com