Trading Tips Blog

1 2 Income investing is often thought of as conservative. Because they are focused on income, income investors might try to minimize risk. Some do this by limiting their investments to blue chip stocks like the ones in the Dow Jones Industrial Average or other large stocks. In the current stock market trading, this strategy might work well if you have enough wealth to generate adequate income from blue chip stocks. With the current yield on the Dow at about 2.3%, a $1 ...
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1 2 Income investors face two challenges in the current environment – they need to combine high income with safety. Neither challenge is easy in the current environment. With the Federal Reserve holding short-term rates below 0.5% since 2009, the challenge of finding income has left many investors with more risk than they are comfortable holding. One example of this is master limited partnerships (MLPs), an asset class that promised high income but carried hidden risks. The chart below shows Alerian MLP ...
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1 2 Relative strength (RS) is widely followed by professional investors. Their interest in RS is simple to understand – their job is to beat the market and the stocks with the highest RS are the ones beating the market. Professional investment managers cannot do their job without owning high RS stocks. Using strategies that include RS helps them meet their goal. Despite its widespread acceptance among market professionals, individual investors rarely follow RS. Again, their interest level is simple to understand – ...
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1 2 Last week, I wrote about how CNBC’s guests love to talk about divergences. This week, I want to look into another one of their favorite talking points – chart patterns. After this article I will move on from my critique of CNBC for at least a while. You’ve probably seen guests explain how a head and shoulders pattern or falling wedge is forming and state that this has predictable implications for the stock market. These patterns do exist and are widely ...
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1 2 How does it feel be wealthy?  While you may just be average or even on a lower rung of the economic ladder when compared to your neighbors, truth is, you are wealthy. In fact, the typical person in the bottom 5% of the U.S. income distribution curve is still wealthier than 68% of the world's population, per the New York Times.  Think about that for a minute! I can hear many you asking what this has to do with the topic of ...
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1 2 Let me let you in on a secret.  There is a key to long-term investing success.  It is nothing complicated and is actually quite simple.  In fact, it is so simple that many investors disregard or ignore it entirely
The  key  is to be able to consistently determine the trend of the stock and when that trend may change.  In other words, knowing what direction the stock is moving in and when that direction will likely change is all you need ...
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1 2 I have a major complaint with most trading and investing education services.  My issue extends beyond just online courses and web sites, it goes deep into the very core of how stock market investing is presented by the so-called experts. My grievance can spell the difference between profits and losses, not to mention why some are successful in the stock market while the vast majority simply break even or lose over the long term. The complaint focuses on the fact that very ...
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1 2 It was shocking for many people to see gasoline prices plunge below $2.00 per gallon.  Gasoline, a prime derivative of oil, had been riding a one-way ticket higher in price on the back of ever climbing oil prices. Fears that the earth would soon run out of oil were widespread under the “peak oil” theory causing tremendous fear that prices would never decline.  Add in the never-ending middle east tension and a very bleak picture emerged that oil would ever decline ...
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