Tips for Trading Descending Wedges Long with CFDs

By Jeff Cartridge

Descending wedges have been very popular with traders on the long side and not so often traded when it breaks in the downward direction. A descending wedge is defined by two lines, one on the upper boundary of the price movement which slopes down steeply towards the line on the lower side which also slopes down at less of an angle.

Descending Wedges, Unexpected Returns

The breakout of the descending wedge would be expected to be up and in reality this is the case with 61% of the patterns breaking to the upside. The upside breakout of descending wedges is however not that profitable with just 37% of the patterns being profitable. The average return for the long trades is 0.12% in 7 days. So it is not the best pattern to trade long, but could be profitable in the right conditions.

Refine Your Entries

A long breakout from a descending wedge works better in a rising market and sector environment. Ensure the market is in an up trend while the sector and stock, are in a consolidation phase or an up trend prior to the breakout.

Descending wedges that breakout late in the pattern, produce inferior results. A breakout is better if it occurs before the pattern gets 80% of the way to the point of the pattern. Shallow patterns are best avoided, where the pattern height is less than 2% when compared to the stock price. Also watch out for patterns that take longer than 25 days to form, these produce inferior results.

Descending wedges with two highs, closes or lows at the same price should be avoided, as this usually occurs in an illiquid stock. If the volume supports the breakout the results are better. Supportive volume means the volume on the way up is higher than the volume on the way down.

Descending Wedges Can Deliver Good Profits

You can improve your trading results by using a series of filters that have been outlined here. This select group of descending wedges delivers an average profit of 1.92% in 11 days and is profitable on 57% of the trades. Overall this makes descending wedges attractive to trade, but these filters are important.

Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23223

About the Author:

Jeff Cartridge is a private trader and created the website LearnCFDs.com Discover Chart Pattern Secrets

The Stock Market Takes Patience

By Sharon Demeter

Learning how to navigate the stock market might be intimidated to someone just starting out. Even though many of us have lost money, there are those that are becoming interested in the market for the very first time. With the Dow being the lowest it has been in a long time, these people are probably thinking that now might be a good time to get on board. Anyone new to stock investing should know though, that just because the market is low doesn't mean it can't go lower.

You don't have to feel like it too intimidating to get into the stock market. If you want to know how to buy stocks, you should know that you could open an account and start buying online without ever talking to any human person. So, if you feel intimidated by all the market jargon and are hesitant to get involved, you should know that it is quite easy.

When you open a stock account online, it is not much different from opening up any other type of account. You will need to supply all your information such as a user name, password, address, and in this case a social security number. After that, all you have to do is fund your account by sending money in and then you can start buying stock with the click of your mouse.

If you want to get your feet wet before you try the real thing, one of the best ways is to join a fantasy online stock trading game. There are several ones that are free and you can learn how to set up an account and trade stocks just like you would in real life with an online broker. The only difference is that these games use virtual money that is worthless. This type of stock trading simulation lets you get used to all the nuances of the market and how to manage your own portfolio. Nothing is ever like the real thing but this is a great way to learn about stocks and how to do the research

Everyone has to get started sometime and beginners need to know that they can indeed lose money in stocks. That is perhaps why it is scary to make that first stock purchase because you know that your money is in play and you can lose some or much of it. Nevertheless, the stock market has been a historically good place to invest and beginners should remember that. - 23223

About the Author:

Are you interested in learning about buying stocks for beginners? Please visit my site Stock Market For Dummies.

Traders Mindset & Risk Psychology

By Ahmad Hassam

Your personal trading psychology affects every trade entry and every trade exit that you make. Every great trader has a deep understanding of his/her psychology. Even great traders struggle with their inner demons from time to time. Those demons generally are fear, greed or regret.

You will have to keep an eye on your trading psychology in your journey from a novice trader to a master trader. The quicker you will confront your demons and the more success you will have in slaying them, the more you will develop the traders mindset.

You will need to learn how to control your emotions in trading. Trading is all about controlling your emotions. There are some emotional traits that help traders and investors make consistent profit in the markets. Some of these emotional traits will come naturally to you as a trader. However, others you will need to cultivate and acquire. Now this is what you feel when you acquire the traders mindset:

a. You will start believing in your trading system and stop worrying about the money. b. You will accept risk in trading and investing. Trading and investing are inherently risky. c. You will accept winning and losing trades equally as a part of trading. Even great trader cannot avoid a losing streak. d. You should try to make trading enjoyable. In the end you will start enjoying trading. e. You wont feel being victimized by the markets every time you lose. f. You will be always looking to improve your skills. Learning is a continuous process. g. The trading profits will start flowing into your bank account as your skills improve and begin accumulating. h. Markets will always be unpredictable. You will want to keep your opinions to the minimum. You will be more open minded in your reading about the markets with experience. i. Your skills will improve with each trade. You will want to learn from every trade or position. j. You will try to try to flow with the market and align trades in the direction of the market.

There are certain destructive emotions that confront each trader. You cannot achieve the traders mindset without overcoming the destructive emotions in you. You will have to face these destructive emotions when trading:

1. Fear of taking a loss and the fear of being stopped out. 2. Getting out of the trades too quickly. 3. Wishing and hoping that you will make a winning trade. 4. Anger after a losing trade. 5. Trading with borrowed money or trading with money that you cannot afford to lose. 6. Adding on to a losing position. 7. Compulsive trading 8. Excessive joy after winning a trade 9. Poor trading accounts profits. 10. Not following your trading system. 11. Second guessing your strategy. 12. Not trading the correct trade size. 13. Trading too much. 14. Afraid to trade 15. Irritable after the trading day.

See if you are experiencing any of these destructive issues by trying to take a look into the mirror. When you find one of these emotions in yourself try to isolate and defuse it. This exercise will help you identify your strengths and weaknesses.

In essence, getting the Traders mindset is getting to a place of profitability, peace and bliss. Once you have identified a certain destructive emotion present in you, try to write it down and find a solution. Just the action of writing it down will help you bring one step closer to nirvana. - 23223

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Develop your own Forex Trading System. Get Netpicks Forex Signals Free!

Learning About Short And Long Term Stock Market Investing

By Sam Smith

Investing during a transitional economy is risky. Investment options that were presented as secure a year or two ago are not now and there is a need for clever planning and preparation in order to spread ones risk in investments and saving.

With the stock markets being fluctuating the way they are these days many investors are not clear on what is the best approach to investing. The two basic approaches are the conservative and the aggressive strategies and while both can be fruitful the question is which one will produce the best results in market conditions like these.

The aggressive investors are the day traders. They are considered the mavericks of the trading world and they function by taking larger risks. Larger risks mean possibly larger profits or losses. The way a day trader works is by buying and selling stock many times in a single day.

The investors who prefer to buy and hold their stocks are the ones that take less of a risk when it comes to investing. In order to be such an investor you need to do a fair amount of research and learn about the stocks and companies you buy.

Investing during times when you dont really know how the market will go requires a certain level of risk management. The best solution is to spread your investments around. It is also wise to use different investment models. Perhaps a certain allocation between long term and short term can be very fruitful.

Short term investors enjoy both positive and negatives regarding their approach. On the one hand a day trader can see returns from one day to another and be able to pull out from an investment at any given point but on the other hand they must constantly be on the lookout for their investments.

Long term investors on the other hand dont really have to be on the lookout all the time, they buy and hold. This strategy involves much less stress than the day trading approach. The problem with long term investing is that it is difficult to jump out of an investment if it goes south. - 23223

About the Author:

Developing an investment strategy can be tricky. locateing the right advice is essential in developing a solid investment strategy. Speaking to an Investment Adviser is very significant and if you live in Toronto you should locate an Investment Adviser Toronto.

Is A Bank Short Sale My Best Choice?

By Anthony Mauwer

A bank short sale is not the only choice we have to avoid foreclosure - but it is definitely better than some of the other possibilities. If a homeowner is already in this position, they are already dealing with intense financial anxiety from every angle. If approved for a bank short sale, much of this stress will be alleviated because they'll be in a great position to purchase another home.

It is extremely difficult for us as homeowners to accept the fact that our home may be lost, but if it's going to happen, avoiding foreclosure is the highest priority. It's important for us to understand clearly that a short sale is not the"only" way out, but it may be the "best" way out. If we foreclose, the lender can sue us, garnish our wages, put a lien on other property, and hound us for years. All this in addition to the destruction of our credit rating. With a bank short sale - if handled correctly, we're making an agreement with our lenders up front to settle most of these issues now.

A bank short sale can cause high levels of stress and anxiety. It's easy to feel overpowered by all of the accountants, tax issues, lawyers, forms, legal jargon, and phone calls. This is not even considering the financial difficulties we're experiencing in other areas. It is in this situation that we must not forget that all parties involved in our short sale are trying to get as much money as they can. They may make surprise requests in the final weeks/days. Prepare yourself for this possibility - don't be bullied.

These last second surprises can be avoided if we seek expert advice from the outset. We don't want to attempt a bank short sale without expert assistance of some kind - and should not procrastinate in acquiring it. Throughout the process we'll deal with complex issues of property taxes, our loan, and real estate. We'll need an expert in each of these areas. If you look in your area you should be able to find services that provide you with the expert assistance of qualified accountants, lawyers, and real estate agents - who will be paid by your lender. As with any type of service you need to exercise discretion in order to get the best assistance available.

Keep in mind is that the bank is not exactly enthusiastic about doing the short sale. Yes, they do want to avoid a foreclosure also, but their attitude towards a short sale is definitely not to be considered positive. They are trying to recoup as much as they can and at times may be rather difficult to deal with. If you keep this in mind, you'll go a long way in understanding why certain aspects of the process move so slowly when you know in your mind that they should be moving faster. Keep a cool head and be patient. It's going to be like trying to work out a deal with the government - they'll answer you when they're ready - and not a second before.

The entire short sale process is strenuous and all parties may not agree on every issue - but if we can tough it out, we'll be the winners in the end. We'll be successful if we avoid foreclosure and bankruptcy, get our debt forgiven, and come out without any unpaid property taxes. This is why a bank short sale is such a sweet deal. It won't be perfect, but at least we'll be in a position to buy another home. Completing a short sale puts us in the best position for the future. No, a bank short sale may not be the only way out, but it is one of the better options! - 23223

About the Author:

Anthony Mauwer's short sale advice has helped many homeowners successfully complete a bank short sale. Be sure to take a look at his short sale blog for tips, advice, and information on how the bank short sale can best work for you.