Learn Stocks Courses
Stocks Trading is one of the largest financial market in the world. Stocks traders invest in the stocks market popularly known as Stocks Trading for speculation purposes. Stocks traders are attracted to stocks because of the following reasons:
Stocks Leverage - stocks leverage means that traders can make more money in stocks by investing little of their own capital. This is because traders can borrow money to trade with from their stocks broker using stocks trading leverage.
Liquidity - The fact that stocks is one of the largest financial market in the world means that there are very many traders trading the stocks market at any time of the day or night during the stocks market week. The fact that there are many traders investing in this market make the stocks market a very liquid market meaning trader can open and close trade in a matter of seconds.
Low Transaction Cost - Because in stocks there are many traders trading at any one given time means that trade costs are lower because of this big volume of trades taking place in the stock market. The only transaction cost paid by the trader is the spreads; no other cost is paid by the traders. The spread is also only when a trader opens a trade: therefore if a trader does not trade then they do not pay any cost.
This learn stocks tutorial presents the various stocks education courses that technical traders or traders who want to learn technical analysis can learn from. After traders have learnt the basics of stocks it is then time to learn more about technical analysis topics that they can use to trade with.
The stocks technical analysis lessons can guide beginners on how to study the various technical analysis concepts.
Basics of Stocks Technical Analysis
Candle Charts
For technical traders the basic technical analysis tool that they use is the stock chart. There are 3 types of stocks charts: line charts, bar charts & candle charts. The type of stocks chart most commonly used by traders is the candlestick chart. This is because the candlestick chart has a visually appealing format that clearly represents the movement of stocks prices, by displaying different colors for different movements; that blue color when prices close higher than they opened or red color that represents when prices close lower than they open. In addition these candlesticks show the distance between the open and close stocks price and this forms the body of the candlestick. This body of the candlestick is looks similar to the wax part of a real candle. The highest point of the stocks price will be drawn with what is known as a shadow, the shadow is a thin poking line that is drawn above the candlestick and it looks similar to the wick of a real candle. There is also another shadow drawn below the candlesticks and this one represents the lowest point of the stocks price.
The information drawn by the candlesticks is known as OHCL –which represents Opening stocks price, High, Low and Closing stocks price.
Japanese candlesticks were created in Japan by a traditional rice trader who used to trade futures, his name was Homma Munehisa, he later moved to trading the Tokyo stocks market that was in 18th Century & he made a fortune trading the Tokyo stocks market using these candles: He is said to have made over 100 consecutive winning trades.
In addition to showing the graphical representations of stocks price traders also use candlestick patterns to gauge and determine the strength of the stocks price movement. Stocks traders also study these candlestick patterns so as to learn how to interpret and trade signals from the various candlestick patterns. Stocks traders wanting to about the various candlesticks patterns can learn from our stocks section under the technical analysis topics, the various candlestick patterns used to trade Stocks Trading are:
1.Long and short Candlesticks
2.Spinning Tops & Doji Candlesticks
3.Hammer Candlestick Pattern and Hanging Man Candlestick Pattern
4.Inverted Hammer Candlestick Pattern and Shooting Star Candlestick Pattern
5.Piercing Line Stocks Candle Pattern & Dark Cloud Cover Candle Pattern
6.Morning Star Candles, Evening Star Candlesticks & Engulfing Candles Patterns
Support & Resistance Areas
Some traders also refer to these levels as support and resistance lines. Concepts of support & resistance levels refers to stocks price zones where it is difficult for the stocks price break through & move beyond these levels.
At these levels traders are likely to perceive the stocks price of the stock as being cheap or being expensive.
Support
Support prevents the stocks price of an asset from getting pushed downward. Support levels are therefore regarded as the floor because these stocks price levels prevent the stocks market from moving stocks prices downwards past a certain point.
Resistance
Resistance prevents the stocks price of an asset from getting pushed upward. Resistance levels are therefore regarded as the ceiling because these stocks price levels prevent the stocks market from moving stocks prices upwards.
Therefore, these levels may be used by trader to determine where to open trades at the points where there is a high risk: reward ratio. For example a trader may open a buy stocks trade at a support level and place a stop loss a few pips below that level. The trader buys at this point because they perceive the stocks price to be cheap. A trader may open a sell stocks trade at a resistance level and place a stop loss a few pips above the resistance level. The trader sells at this point because they perceive that at that point the stocks price is very expensive and therefore there will be less people willing to buy that stocks trading instrument because the stocks price is very expensive and therefore the stocks price is likely to start moving down soon rather than continue to move upwards.
Stock Trend Lines
Stocks Trend lines are used to determine the general direction of the market.
Sometimes support and resistances are formed diagonally in a similar way like a staircase. This forms a trend, a stocks trend is a sustained movement in one direction either upwards or downwards.
A stocks trendline depicts these points of support and resistance for stocks price.
Stocks Trend line is an aspect of technical analysis that uses line studies to try and predict where stocks price will move next.
A stocks trend line is a straight diagonal line that connects two or more price points and then extends into the future to act as line of support or resistance.
Stocks Trendlines are based upon the idea that markets move in trends. Stocks Trend-lines are used to show 3 things.
- The general direction of the stocks price movement up or down.
- The strength of the current stocks price movement and
- Where future support and resistance of the current stocks price movement are likely to be located.
If a stocks trendline forms in a certain direction then stocks price usually move in that direction for a period of time until a time when the trend line breaks-out.
Upward stocks trend line - If stocks price is moving up then a line is formed that is also moving up. This line is called an upward stocks trend line.
Downward stocks trend line - If stocks price is moving down then a line is formed that also moves down. This line is called a downward stocks trend line.
Moving Averages Stocks Trading Technical Indicator
Moving averages are also used in stocks to determine the general direction of the market. Moving average is a stocks trend following technical indicators that is used to show the direction of the market.
The most common trading method of determine the direction of the trend is by using two moving averages to form the moving average crossover stocks system. The moving average crossover stocks system is covered in our stocks strategies section. The moving average crossover system is made up of two moving averages one with a lower period and the other with a higher period, for example a trader may use the 5 period moving average and the 7 period moving average, when price is moving up the two moving averages will also be moving up and when prices are moving down the two moving averages will also be moving down. Stocks traders can also identify when a stocks trend changes its direction because the two moving averages will cross over each other once there is a change in direction of the stocks price movement. This crossover signal is used by traders to determine when to open a new trade after the crossover signal has been generated and the two moving average start to move in the same direction. This crossover signal is also used to determine when to close a trade and take profit after there is a crossover in opposite direction.
Bollinger Band Technical Indicator
Bollinger bands is a very popular stocks indicator, it is also a stocks trend following indicator and it is used to show the general stocks trend of the stock market. The Bollinger band is made up of three lines, these are:
·Middle band - this is a moving average of 20 stocks price periods
·Upper Band -shows upper limit of stocks price
·Lower Band - shows lower limit of stocks price
Middle band will show the general direction of the market trend whether up or down.
The upper band is where a trader will open a sell stocks trade if the stocks market stocks trend is down or close their buy stocks trade and take profit at this level if the stocks market is trending upwards.
The lower band is where a trader will open a buy stocks trade if the stocks market stocks trend is up or close their sell stocks trade and take profit at this level if the stocks market is trending downwards.
Stock Fibonacci Retracement Levels
Fibonacci retracement levels are popularly used to determine the levels where stocks price retracements are likely to go up to. Stocks traders use these retracement levels to determine where to open trades after a stocks price retracement.
Fibo retracement levels are covered in the learn stocks tutorials section of this web site under the technical analysis topics. Trader can learn how to use the Fibonacci retracement levels, which levels are commonly used to open trades and how to draw these retracement levels using Fibonacci retracement indicator.
All these technical analysis methods are also covered on the stocks strategies section of this learn stocks course website and trader can learn more about these concepts & get example of these concepts are used in trading from this stocks strategies section that has numerous screenshots illustrations of these technical tools and how they are drawn on stock charts along with explanation of they are used to generate stocks signals.
