As Amazon recently reported its quarterly results, which, not only did I predict right on, but surprised many other experts and analysts awaiting a more negative outcome, one of its competitors, Barnes and Noble (BKS), which typically utilizes similar methods in achieving its respective businesses will be reporting earnings shortly as well. With such similar trends and data, you, as a shareholder of this stock should expect to gain similar capital after this recognized bookstore reports its earnings in about two weeks. While the parallelism is perceived as obvious, the truth may actually be a bit surprising.

In the short term, you should see a very similar trend to what Amazon is currently doing. While I cannot be sure that Barnes and Noble will report results that will boost the share price in the same way it did to Amazon, I have a good feeling that because both corporations are very similar and have reported very comparable trends in terms of share price growth over the last five years, that come November 16th, you should see a nice gain in your capital if you own a piece of this company. Looking at a more detailed approach, like Amazon, Barnes and Noble has posted pretty solid fundamentals during the past two years. It’s true that margins have fallen, but a lot that can be attributed to poor investing and financing fundamentals instead of the more important operational numbers. What I also see as a positive for Barnes and Noble is how it continuously has beaten earnings over the past four quarters. While such may be common to other stocks, with an EPS estimate for this quarter of only negative 0.04, I absolutely, with the advancement of consumer spending and sentiment, coupled with good economic data reported during this quarter, believe that Barnes and Noble will handily beat expectations on the bottom line. Another positive to keep in note, is that while the economy may be slowing a bit in terms of more institutional factors such as in housing, in terms of the consumer, with the recent report that the unemployment rate is at its lowest point in over five years, consumers are going to have more discretionary income to spend, which should push earning numbers even farther for Barnes and Noble over the next few quarters, especially with the Christmas holiday season approaching. The other important indicator that I like from Barnes and Noble is its P/E ratio. Compared to its other competitors of Books-A-Million, Borders, and even Amazon, Barnes and Noble has the lowest P/E ratio out of these respective competitors signaling an undervalued stock ready to possibly break a 52 week high. If are not a shareholder of this company, I would strongly recommend purchasing shares before earnings are released.

However, with such promise and optimism comes a catch. Yes, it is true that Barnes and Noble is underperforming but in excellent position to excel in the short run. However, in the long run I would not share a similar sentiment. As the nature of Barnes and Noble is a high price selling book store, the reason I argued that the share price may be a good bargain now is because of the current economic situation. When consumers have more jobs and higher incomes, they tend to spend more on luxury goods such as books for pleasure. However, once, and it will happen soon, this economic condition reverses into a slower economic growth state, do not expect earnings from Barnes and Noble to resemble what you may see in the coming months. As a slower economy approaches with the prospect that this company is very volatile in terms of its share price, do not feel optimistic that you will increase your capital gains very fast. Truthfully, around April to about June time frame of 2007, I would actually start selling most of my shares of Barnes and Noble for the reason I mentioned above, coupled with the seasonal displacement stocks usually have during this time.

Thus, while Barnes and Nobles shows excellent signs of producing a glamorous quarter in the next few weeks, do not be too complacent if you are a long term investor. I say this because more than likely, once Barnes and Noble hits a new 52 week high in the coming months, do not expect such growth to sustain into next year simply due to the inevitable but ephemeral and cyclical nature of the economy. In the short term, however, I absolutely would advocate purchasing shares of this company, if you haven’t already, because there is still money to be made in this current bull market.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

Stock markets represent and portray the commercial and economical strength of a country. The economy of a country relies on the stock market to a great extent, since they trade in the stocks of major companies. These markets are the source of capitalism in the United States. They play an important role by raising funds for companies. Being a part of a stock exchange may seem complex to many, but you can be a part of any popular stock exchange, either with the help of a brokerage account that can be opened online, or by interacting directly with the exchange.

A stock market is a place where people who want to earn money through investment, and companies who can provide those investment opportunities, come together. The trading and investing of stocks takes place in this market. Companies need funds and in order to raise funds, they issue stocks in the form of shares in which you invest, to earn money. If the company earns profit, then you as a stockholder of that company will also get a share in that profit.

You can gain a lot on the selling floor of a stock market. It is necessary, however, for you to understand the basics of a stock market, what its roles are, and how it works. For this, a proper study of all the possible market moves is essential. This needs constant appraisal, as the market moves very fast, and there are many ups and downs involved.

Stock markets are fraught with risk. Therefore, be it trading or investing, you need to proceed with caution. It is advisable to analyze a company’s profits and cash flow, the services it offers and the profit distribution pattern it follows, before investing in its stocks. If you are confident that the shares are commercially viable, you can go ahead and make an investment. . Beside the profit incurred through the sale and purchase of stocks, you can also get the benefit of dividends that profitable companies offer. As an investor, you ought to know that blue chip stocks, income stocks, defensive stocks and growth stocks are several groups under which the future shares of companies are divided.

Big companies that pay dividends without fail, and have a record of growth in profit, have their shares referred to as blue chips. You can also invest in income stocks because the companies that issue these stocks pay high dividends, and have a stable earning in the market. Growth stocks grow very fast, but may fetch you nil or minimal dividends. In order to minimize your risk you can invest in defensive stocks as their value remains constant even if the market falls.

Companies can also issue their shares abroad with the help of banks. If you are planning on investing in stocks then try to invest in companies that offer dividends along with discounts. You can do the purchasing through the brokerage, or dividends, or a direct investment plan. Since a lot of people buy shares and stocks there is a cycle of supply and demand. Depending on this cycle, various fluctuations take place in the stock market. So, try to immunize yourself from these fluctuations by investing wisely.

The stock market not only provides you, as a trader or investor, an opportunity to purchase or sell shares or stocks, but also plays an important role in maintaining the cash flow in the economy of a country. If you are interested in making money in stocks, then it is recommended you learn the basics of stock markets before leaping in.

Joe Kenny writes for the UK Loans Store where you will can compare UK loans and offer more information on UK secured loans and other loan topics available on site.

Visit Today: http://www.ukpersonalloanstore.co.uk

Buying on margin means that you are buying your stocks with borrowed money.

If you are buying stocks outright, you pay $5,000 for 100 shares of a stock that costs $50 a share. They are yours. You’ve paid for them free and clear.

But when you buy on margin, you are borrowing the money to purchase the stock. For example, you don’t have $5,000 for those 100 shares. A brokerage firm could lend you up to 50% of that in order to purchase the stock. All you need is $2,500 to buy the 100 shares of stock.

Most brokerage firms set a minimum amount of equity at $2,000. This means that you have to put in at least $2,000 for the purchase of stocks.

In return for the loan, you pay interest. The brokerage is making money on your loan. They will also hold your stock as the collateral against the loan. If you default, they will take the stock. They have very little risk in the deal.

One way to think of buying on margin is that it is often comparable to buying a home with a mortgage. You are taking out the loan in the hopes that the value will go up and you will make money. You are in control of twice the amount of shares. All you have to see is the additional profit exceed the interest you have paid the brokerage.

However, there are risks to buying stock on margin. The price of your stock could always go down. By law, the brokerage will not be allowed to let the value of the collateral (the price of your stock) go down below a certain percentage of the loan value. If the stock drops below that set amount, the brokerage will issue a margin call on your stock.

The margin call means that you will have to pay the brokerage the amount of money necessary to bring the brokerage firms risk down to the allowed level. If you don’t have the money, your stock will be sold to pay off the loan. If there is any money left, you will be sent it. In most cases, there is little of your original investment remaining after the stock is sold.

Buying on margin could mean a huge return. But there is the risk that you could lose your original investment. As with any stock purchase there are risks, but when you are using borrowed money, the risk is increased.

Buying on margin is usually not a good idea for the beginner or normal, every day investor. It is something that sophisticated investors even have issues with. The risk can be high. Make sure that you understand all of the possible scenarios that could happen, good and bad.

Martin Lukac represents http://www.RateEmpire.com, an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com and San Diego loan portal http://www.LendingSanDiego.com

With the NBA and other sport seasons flaring up this autumn, you may be wondering if now is the perfect opportunity to purchase shares of Foot Locker (FL), especially since they will be releasing earnings shortly (November 19, 2006). While such may be said as a good deduction, there are other, more profound reasons and answers to this question which, may, unfortunately, delay or even abort your decision to carry on your purchasing intentions. While all the economic and fundamental analysis may signal a strong run for this company, the technical analysis side of these indicators weighs much more heavily in a stock like Foot Locker.

To put such sentiments into more rudimentary terms, since its IPO days in the early 1970s, Foot Locker has provided evidence to the public that such is a hard to assess equity. It’s true up to 1990, Foot Locker posted pretty solid gains, but after that decade began, it seems that Foot Locker has struggled tremendously to surpass its identified resistance level of about 30 dollars in terms of share price. The good news however, is that Foot Locker also has very rarely fallen below its now identified support level of about 20 dollars. While such level may be a positive indicator for a large cap stock for a year or two, in the case of close to 16 years, it is time to realize that Foot Locker has hit its maximum and will continue to have a hard time surpassing 30 dollars anytime soon. In fact, over the last few years Foot Locker had an immense opportunity to confront this heinous 10 point position. Since Foot Locker, as described by Yahoo Finance, sells merchandise in the form of apparel and athletic shoes, which are luxury goods and should flourish under the previous economic duration, the share price, if understanding fundamentals, should have rose to new record levels, but instead the price of a share actually fell or nearly broke even during this time span. Such has led me to come to the conclusion that now, especially since the American economy is slowing, going into a recession, purchasing shares would be a waste of both capital and time to invest in a company like Foot Locker.

However, if for some reason, you have an aching or contain some desire to purchase shares of this company, but only for the short term, there may be some good news. Since Foot Locker has recently reported pretty solid fundamental results in terms of revenue and operational income growth which is supported with a strong P/E ratio, there may be a chance in the next two months to make some money. Since Foot Locker should typically do well when consumers are both confident and employed, fundamentals for this consumer based company, especially during this time of the year should be at its strongest. If such is the case, then there is a possibility over the next few months to earn a nice 10-20% if everything plans out well, as Foot Locker is near the support level of its position rather than resistance. However, if you plan to keep your shares any longer than that (Around April 2007), be warned that there is a good possibility that most of your capital gains that you would have accumulated over that span will probably diminish, if not go into negative territory.

Thus, while there is a small chance of profit from investing in Foot Locker over the course of the next few months, if I were you I would rather put my money in more results-proven equities or be sure to take my shares out once I’d made around 10-20%. As a long term investor, I definitely would stay away from this stock as more than 16 years is absolutely too long for any equity to stay in just one position.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

During the 1990’s bull market, interest in stock dividends dropped to near zero. But with the collapse of the tech bubble, there has been a growing appreciation for stocks which pay dividends. Nevertheless, dividends are still often undervalued by many stock investors.

Dividends are stocks’ secret weapon. Studies show that dividends account for up to half of the total return of the stock market over long terms, a surprising fact considering how little publicity they get. There is no “Dividend Index” or anything like that which gets reported every day like the Dow and the NASDAQ.

Let’s look at some facts about dividends.

• Not all stocks pay them. The payment of dividends is a discretionary decision made by each company’s management and Board of Directors.

• But for companies that do pay them, dividend policies tend to persist. A company with a history of paying dividends will rarely abandon that policy. Many companies have been paying—and raising—their dividends for decades, and there is no sign that they will stop.

• Dividend-paying companies tend to be larger and older companies, with well-established cash flows that fund the dividend each year. Thus, they tend to be companies that are more stable, safer, and less volatile. Many of them are quite simply cash-generating machines. They share some of that cash with you by paying it out in dividends.

• At the current maximum Federal tax rate of 15%, dividends are the most tax-advantaged form of income available. Better than your salary and better than bond interest (both of which are taxed at your marginal tax rate, which is usually higher than 15%).

• The best dividend-paying companies often provide significant potential for price growth on top of their dividends.

But the best thing about dividends is that your yield will usually rise over time. Compare this to the fixed yield that bonds pay. This rising-yield phenomenon, to me, is the most intriguing aspect of dividend stocks.

How does the yield rise? It happens when the company raises its dividend. Many dividend-paying companies have a history—an implied policy—of increasing their dividend regularly. Often this is done in line with their earnings growth each year. So even a company with modest annual earnings growth of, say, 10% per year may increase its dividend 10% per year too. (In your job, how often do you get a salary increase of 10%?)

The increased dividend bumps up the percentage yield on your original investment. The math is simple. Say you purchase a $100 stock when its dividend yield is 3%. You buy 100 shares for $10,000, and the stock pays you dividends of $300 that first year. The next year, the company’s earnings increase 10% and the company follows its usual practice of raising the dividend to match: Up 10% to $3.30 per share. You get paid $330. Your yield—calculated on your original investment—has jumped to 3.3%.

Note that it no longer matters what ‘’current yield'’ is printed in the newspaper. That is based on the stock’s current price, whereas your yield is based on what you invested. If the stock’s price kept pace with its earnings growth (which is often the case), the current yield will still be depicted as 3%–but that only applies to new buyers, not to you.

If the 10%-per-year scenario keeps happening, in Year 3 your yield will be a little over 3.6%, in Year 8 it will have doubled from its original 3% to 6%, and in Year 16 it will be paying 12% on your original investment. That 12% yield exceeds the annual long-term return of the stock market itself, and far exceeds the fixed return available from any investment-quality bond.

Thus we see why dividends are stocks’ secret weapon. They are underpublicized, yet provide about half the total return of the market with more safety. And they go up.

Unfortunately, ‘’income'’ is often reflexively associated just with bonds. Many investors who are looking for income overlook the income available from stocks. But as we have just seen, stocks’ income potential often exceeds that of bonds. The Sensible Stock Investor recognizes this and takes advantage of dividend stocks in his or her portfolio.

Now, of course, all these good things do not come without a little risk. Whereas most (certainly not all) bonds are relatively risk-free, stocks always have market risk attached. But given the large, mature, stable nature of many dividend-paying companies, that risk is relatively small. Dividend payers tend to be less volatile than the market as a whole and certainly less than most high-growth stocks.

By the way, a high yield is not the only criterion for selecting good dividend stocks. A well-rounded approach will turn up stocks that not only have decent dividends to begin with, but also the potential for price appreciation. In other words, the Sensible Stock Investor keeps his or her eye on total annual return—with a strong dividend component.

Happily, with the end of the bubble deflation in 2002 and the passage of the maximum 15% Federal tax rate on dividends, companies themselves—not only investors—are rediscovering dividends. More and more companies are paying them, and many companies which already were paying them have strengthened their payout rates. Overall, it is a good time to be a dividend investor.

If you would like to learn about a comprehensive stock investment approach that that uses the same strategies reflected in this article, including specific strategies geared to finding good dividend stocks, please consider purchasing ‘’Sensible Stock Investing: How to Pick, Value, and Manage Stocks.'’ Click here to learn more about the best step-by-step guide for the individual investor: http://www.SensibleStocks.com

You are encouraged to reproduce this article or any portion of it. Please include the title, author, and the following Web site address: http://www.SensibleStocks.com

Online stock trading leads many to think of the New York Stock Exchange. when we Online stock trading provides the opportunity to explore stock trading at an International level. Stock trading options online allow us to do business all over the globe. There is quite a large amount of research to be done before jumping into online stock trading at the International level. However, once you have done the research and comprehend the process, then it is basically a matter to accessing the websites.

While stock trading internationally has always taken place, the demand for it and the amount of activity greatly increased with the development of the internet. People no longer had to take trips to such far away places or spend money on expensive telephone calls. Simply click your way around the internet, and you will find plenty of international stock trading options.

If you are even the least bit interested in exploring stock trading at the International level, I urge you to explore the London Stock Exchange website. Beware as you will be entering a whole new world of International online stock trading. The decision to trade stocks online Internationally involves researching the particular companies you are interested in, then securing a brokerage firm for those trades. It is recommended that you employ a stock brokerage firm that deals with domestic and foreign markets.

In addition to doing research about the companies you plan to do stock trading with Internationally, you will want to check out the legitimacy of the brokerage firm you plan to work with. While the internet opens the door to new opportunities such as this, it has also opened the doors wide open for all types of scams and fraud.

Online stockbrokers will provide you with the information you need for successful international online stock trading. There are also online tutorials and Frequently asked questions to help you with anything about the process you are not familiar with.

International online stock trading is a hobby for some people. For others, it is a business that will make or break them. Regardless of your role in it, take your time to learn the various policies and procedures. I can assure you, they vary from how things are done in the United States. Don’t forget that you will be dealing with vastly different time zones as well. It might be helpful to download an aid that will show you the time differences in all the various countries. With so many differences, it may take a while to become comfortable with international online stock trading. It will all fall into place for you in time!

If you’d like more information on investing internationally take a moment to visit our websites at Investment Advisor and Stock Trading Companies

Apple Computer, ticker sysmbol AAPL could be one of the most fun stocks to own for the next 3-4 years. There are so many moving parts to the story and they are all moving in the right direction. The stock is at $73.81 and my price target is $105 within 12 months.

Apple had a strong September sales month at their 150 retail stores as consumers were buying products for the back to school season. The beauty of Apple’s retail store strategy is they control the customer from A to Z. You buy your iMac, or your iPod, and Apple is there ready to sell you every peripheral and maintenance agreements. Apple heavily promotes the iTunes on-line store to fill that iPod with your favorite songs.

Apple will introduce sometime in the first half of 2007, the iPod with a cell phone feature. With an installed base of over 50 million units sold, Apple will become an instant major player in the cell phone market. Also, Apple will offer iTunes in a wireless fashion, increasing its own market penetration. Most analyst earneings and revenue models for 2007 do not contain any updates from these two potential powerful revenue sources.

Apple Computer’s traditional customer base is the student, artistic and graphic designer/sound engineering markets. Apple is making inroads into the business/enterprise sector where they are competing with powerhouses Dell, Compaq and IBM. With the new iMac’s sleek new look and features, any gains in the enterprise market will be pure gravy.

Apple is experiencing strong demand for the notebooks and of course, the iPod. Christmas selling season will be robust and Apple has not experienced any component shortages, so their stores and on-line sales will be well stocked.

The 2006 revenue and earnings per share expectations are $19.1 billion of revenues and earnings of $2.12 per share. Calendar year 2008 expectatios are conservatively set at revenues of $23.6 billion and earnings of $2.70-2.75 per share. Tremendous and sustainable growth. As I said, gold to the core.For more information about Apple Computer and many other great growth names, please go to www.stoplosingmoneytoday.com.

Georges J. Yared Professional since 1979

Dean Witter 13 years, from broker to branch office manager to Regional manager to President and CEO DWR Canada 14 years, partner, investment banking-research boutiques: Wessels, Arnold and Henderson to ThinkEquity Partners Have advised directly over 1,000 individual investors, have supervised over 1,200 brokers in Midwest region, have met and discussed with over 5,000 individual investors Have worked very closely with over 150 research analysts and over 100 professional portfolio managers Have worked with, traveled and advised over 200 publicly traded companies,i.e. Cisco Systems, Medtronic, Costco, VeriSign, etc Author of: "Stop Losing Money Today…the Art and the Science of Investing" "Stop Losing Money Today…Investor Workbook" "Baby Boomer Investing…Where do We Go From Here" coming in November!!! For more information please go to http://www.stoplosingmoneytoday.com

A recent study indicates that Americans are saving less these days than they were 10 years ago, except for entrepreneurs and corporate executive and in one particular segment – young middle-managers who are about six to 10 years into their careers and only beginning to make headway into the higher echelons of their particular industry.

Are you one of these people? If you are, then chances are that you are currently in the process of planning or expanding your base of investments. You have probably given real estate a good look and determined that, although attractive, it is more ideal for a full-time real estate investor because it demands a lot of effort and time. You also probably have a tidy little sum invested in various banking tools like savings and time deposits as well as common trust bonds and government securities. That’s all well and good and your money is safe right there. But now you want to shoot for the moon, mainly by investing in the kind of company and industry that you may be familiar with. You are eager to try the stock market.

Here are a few basics about the stock market business.

The stock market is mainly a place where you sell or trade a company’s stock. These stocks are small shares in the company which it sells to the public in order to raise capital to finance its other ventures. Of course, you already know that capital is the money that a company spends for producing, improving, expanding, distributing and promoting its products and services. If you buy a company’s stocks, you are one of its shareholders.

The use of the term stock market also applies in reference to all the stocks that are available for trading (as well as other securities) as in the statement "the stock market performed well today."

You can also trade bonds on the stock market. Bonds are a business IOU that indicate that the bond issuer holds the bond holder a debt. Bonds are traded directly between two parties over the counter.

You may opt to trade commodities on the stock market. The term commodities refers to agricultural products (coffee, sugar, wheat, maize, barley, cocoa, milk products) and other raw materials (pork bellies, oil, metals). For example, if you feel that the price of coffee will increase next month, you buy the coffee commodity now and reap the benefits of the price increase next month when you sell.

Jonathon Hardcastle writes articles on many topics including Investing, Business, and Finance

The price chart offers us the gift of hindsight; we can all see where the price has been so we can all see overall trend. However this gift of hindsight can be a misleading one. It is all too easy to recognise what you would have done now that you have seen where the price has ended up. If hindsight is somewhat misleading then foresight would be invaluable. Unfortunately we don’t have the gift of foresight when trading the hard right edge of the chart (if anyone does they keep it extremely quiet) so we need to find a way of identifying what the market is doing at this precise moment in time. This can give us a good indication of what is to come and an opportunity to position ourselves appropriately.

Practical Context
Let us put this article into the practical context of swing trading US equities. For a swing trader, his or her goal is to trade predominantly in the same direction as the market wide trend. This means identifying the trend on the DJIA, S&P 500 and the NASDAQ Composite and 100 depending upon which stocks you wish to trade. Once the trend has been identified a swing trading method can be applied and trade opportunities ascertained.

Why Identify the Trend in the First Place?
You have probably heard the phrase ‘the trend is your friend…. until it bends’. Let us first deal with ‘the trend is your friend’. This is based on the principle that a trend is a very powerful mover of prices. During a trend the vast majority of market participants have the same outlook and this demand (in a bull trend), or lack of it (in a bear trend), drives the market in the same direction for long periods of time. The presence of a trend attracts those participants that are currently on the sidelines and they jump in pushing the market further. The fact that the majority hold the same opinion and sentiment points so strongly in one direction means that swings with the trend generally last longer and move further than swings against. Therefore you are increasing your odds of success on every trade you take that coincides with the prevailing trend. The second part of the phrase ‘until it bends’ is just as important. Given that sentiment is pointing so strongly in one direction it becomes very important to know when this shows signs of waning or altering completely. When this happens prices become stagnant, choppy and begin to form pullbacks and ranges. When this happens the success ratio of your trades is likely to fall if you are still trend following and the direction you place your trades may need to be reviewed. In essence trading with the trend increases your odds of success while it is trending but not while it is bending.

Finding the Trend on the Hard Right Edge
So we have established that identifying a trend as it currently stands is very important, but how exactly can we do this? When trading it is important to keep things simple and the method that we are going to explain is no exception. In fact it is based on a simple moving average (SMA). Many traders tend to use two or more separate MA’s that range from short to long-term periods. These are plotted on the price chart and signals are generated as the MA’s cross each other. As the short term MA crosses above the long term MA it indicates that the trend is up and a buy signal is generated. Once the short-term MA crosses below the long-term MA the opposite signal is generated. The problem with trading a moving average cross system is that moving averages are lagging indicators. The chances are that a substantial move has already occurred by the time the moving averages cross which removes a great deal of potential from a trade. There is also the issue of the excessive false signals that are generated when the market is in consolidation mode. At times like this the MA’s are very close to each other and become entwined, crossing regularly. In order to successfully trade an MA cross during consolidation periods it is useful to add a momentum or volume indicator to the chart. If there is an MA cross with high volume/ momentum after a consolidation it can be a very nice signal but we’ll save that for another article. So, for our MA to act as an effective measure of trend health and direction we need to remove as much of the lag effect as we possibly can. To do this we will only use the one simple moving average so there will be no need to wait for a cross. But if there is no cross how do we get our signal? At this point it is useful to remember that the SMA isn’t a system, it is helping our existing swing strategy. It will not be able to give you an entry or exit point; this is down to your swing trading rules. However it will be able to help you select which potential set-ups have the greatest profit potential. We are interested in the direction that our SMA is currently pointing. This will be either up, down or flat (side ways).

Examples: http://www.passion-trading.com/TechnicalAnalysis.50DaySMA.htm

What do you do When the Trend Bends?
During a trend, pullback or a consolidation of the major market indices a good swing trading method will identify longs, shorts and a host of ‘no potential entry’ trades on individual stocks. Using the SMA to determine whether the market is in up, down or flat mode helps you to decide what to do with these potential trades. For example:

Your SMA is pointing steadily north and climbing consistently. In addition to this your swing method is indicating several potential longs and one of two shorts on the horizon. This is a good opportunity to position yourself with the trend by opening several longs and possibly one or two shorts to hedge yourself should the market suddenly take a nose dive. During every up trend there will be some stocks that lose value. This is because individual company fundamentals outweigh market sentiment.

Your SMA has been dropping steadily over the past few months indicating a strong down trend. However in recent days the SMA has flattened out indicating a consolidation period. In addition to this your swing method has been identifying very few opportunities and signals are mixed between long and short. This is an excellent opportunity to adapt your method. If you are used to risking 2% per trade you may wish to drop that down to 0.5% and tighten up on stops and targets. This will help preserve your capital during a time of uncertainty and choppy price action in the market.

Your SMA has been trending steadily upwards for some time. Recently you observed that a consolidation period was in effect and now your SMA has begun to point lower indicating the first leg of a potential pullback. The overall trend is still long but right now prices are taking a breather and making a natural, corrective move lower. This is not the time to trade with the long-term trend and go long. Provided your swing trading method is indicating some potential shorts it is wise to follow them. These are likely to be relatively short-term moves until you have evidence that the trend has changed direction completely. Therefore targets should be modest in order to account for this.

Every Trend is Different Trends are like snowflakes; from a distance they all look very similar (if not completely the same) and they share the same characteristics but when examined closely each one is slightly different. We have covered the reasons for this in ‘Technical Analysis: What You Need to Know Before You Look at a Chart’. Therefore your ability to adapt and remain flexible is vital to your trading success and you should always trade what your charts are showing you and not what you think. There may be occasions in a raging trend that your trading method does not show any good entries at all. In this instance it is common for traders to forget their rules and jump in headfirst only to be hurt by a sudden market correction. A strong trend does not guarantee potential entry points and many potential entry points do not necessarily indicate a strong trend.

Final Thoughts The use of a 50 period SMA is an excellent example of simply identifying current market direction. It can be valuable in helping the decision making process when it comes to trade size and the number of positions to have open at any one time. We think that this method proves that simple can be effective. Of course as a trader becomes more experienced he or she will be able to use price action alone but the SMA is a visual indicator that keeps things easy on the eye and the brain.

David Thorpe is a senior contributor for www.passion-trading.com a free educational resource centre for traders and investors. The goal of the site is to stimulate the minds of its users, enabling them to achieve a greater understanding the art of trading, thus helping them to become more profitable.

There are many different stock markets in the US. In most circumstances, the main markets that you will hear of are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the NASDAQ.

The markets are basically where people and companies trade securities. The market is the arena in which the players gather to trade.

The New York Stock Exchange has been around since 1792. It is located on Wall Street in New York City. The NYSE is the largest and best-known stock exchange in the country. It also has very stringent requirements for companies to join its listings. A company must be financially strong and show signs of being an industry leader to join the NYSE. Companies strive to belong to this market, and even pay annual fees for membership.

When a brokerage describes itself as a member of the NYSE it means that the firm has bought a seat on the floor of the NYSE. This means that there is actually a employee on the floor of the exchange buying and selling stock. This is an expensive investment for a firm, costing well over a million dollars.

The American Stock Exchange is similar to the NYSE in that it conducts its trading on a trading floor. The floor is filled with traders who buy and sell securities. The AMEX has been located in Manhattan since 1921. It is known as a major exchange for not only stocks, but also options. You will tend to find slightly riskier and smaller stocks listed on the AMEX, which operates under the NASDAQ-AMEX Market Group, a subsidiary of the National Association of Security Dealers.

NASDAQ, or the National Association of Securities Dealers Automated Quotations, is the youngest of the three major markets. It may also be the one you have heard the most about through the news. It lists just about every stock in the industry, but it is best known for listing technology companies. In fact, it is where you will find many major technology stocks, including Microsoft and Intel. It was launched in 1971 and was the first over-the-counter stock market. It links buyers and sellers via a computer network.

Brokers and dealers will market the stocks by maintaning an inventory in their own accounts. They will buy or sell when they receive an order from an investor. You will find that start up companies that are issuing stock in an initial public offering will often list on the NASDAQ.

When it comes to buying stock, knowing where to find certain types of stock is important. Each market often specializes in slightly different types of stocks.

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