The Best Trades for December

We are at the beginning of the last month of the year. Every single month we have provided real time buy recommendations for a successful trading strategy. Each month, we provide a list of stocks that have historically delivered gains for the next month. It’s time for us to update on this strategy. We are following one of the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, every month we are run...
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Are We Due for a Pullback?

In the summer of 2015, the stock market pulled back. The decline that accompanies that pullback would end in February 2016 after a 14% decline in the S&P 500. Since that time,the index has moved nearly straight up without a pullback. In this article, we look at whether or not that is unusual. Or, more specifically, we look at how unusual this winning streak has been and what the implications for the future price action are. To begin with, we need to define some terms: We are defining a pullback as a decline of at least 5% from a prior high but no more than 9.99%. A decline of at l...
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Seven Tech Stocks Under $7 to Buy Now

The end of year tends to be a seasonally strong period for stocks. Some analysts believe the January effect has moved into the end of year with stocks doing better in the final weeks of the year as traders try to arbitrage the January effect. Arbitrage is a trading strategy where investors buy an undervalued asset they believe has a high probability of rising. For example, it could be the stock of a company that is being bought by another company. The deal might be for $100 a share but the stock trades at $99, giving the arbitrage trader a riskless profit of $1 a share. Unfortunately, op...
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How to Build an Online Trading System With Technical Analysis

Building an online trading system can be a complex process. It can require customized programming, access to expensive data sources and extensive time commitments to maintain the system. However, there are a number of web sites that do the heavy lifting for free. Web sites offer something for traders with any level of programming skill. If traders prefer to do all of their programming, specialized software packages like R and Python can be used to develop a strategy that is complex and complete. Of course, there are many traders who would rather trade than program. In this article, we wi...
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The Smart Money Really is Smart

Market analysts often speak of “smart money” and “dumb money.” The exact definitions can vary but individual investors are usually considered to be the dumb money in a market. Smart money is the larger institutional investor or the hedge funds. These labels are intended to segment the market participants based on the information they have available to them. Although there is a great deal of information available to individual investors, institutional investors still hold an information advantage. Large investors tend to pay a high price for their information. They may have Bloomberg term...
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An Online Trading System You Can Use for Free

Artificial intelligence seems to be taking over the world. While its application to self driving cars and trucks are new, artificial intelligence has been employed by hedge funds and other large investors for some time. This article will provide you information about online trading system you can use for free. Many of these investors are using technology to find and execute trades. For example, funds may subscribe to a service like Dow Jones Newswire. With natural language programming, they set up computers to read headlines and articles. Computer algorithms determine whether the article...
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Pattern in Profits Create Patterns in Prices

The stock market seems mysterious at first glance. Prices move up and down, seemingly based on the whims of traders. There is a sense of disorder in the price movements. Since many individuals prefer order to disorder, there have been many efforts to find order in the markets. Much of the effort has been focused on price patterns. The goal here has been spotting recurring patterns in price, including famous patterns like a head and shoulders pattern. These patterns have some value and are often based on principles of behavioral economics. But, price patterns are subjective and often pron...
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Beaten Down To Under $5 But Showing Signs of Turning Up

Major stock market averages are trading near record highs. This means many stocks are overvalued. But, it also means we are in an up trend. That indicates it could be beneficial to look for stocks that show signs of improving fundamentals that could be at the beginning of new up trends. Improving fundamentals are important to consider but they are rarely enough to base an investment decision on. Many stocks have improving fundamentals. But, it takes the buying power of other investors to push a stock price up. This is because of the difference between a company and a stock. Although we s...
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Patterns Unlock Profits in Stocks

In the most general terms, there are two types of investors – those who think they are failures and those who believe they can succeed. Investors who believe they are failures will cling to index funds. They tell others that no one can beat the market and to try is futile. So, they settle for funds whose goal is to lose 50% or more in a bear market. This is shown in the chart below. iShares S&P 500 Index Fund (NYSE: IVV) lost as much as the stock market in the bear market that ended in 2009. Investors who believe they are failures tell us that’s nothing to worry about because the...
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