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This page has some basic investing information and TA that may help you to trade more profitable. Most of this is elementary knowledge, but I want to have it all in one place for easy reference. I have collected it from different sources. Sometimes we are faced with a difficult trading decision and I hope that maybe some information on this page helps you make a better decision.

- How to get on ongoing signal?

Initial Short signal #1 happened on 2.9.08. Note that 50 EMA is below 200 EMA = bear market conditions, in which you should expect the down trend to continue until it breaks out of it.

#2 in November would have been a great and relatively safe time to jump in or to add your Short position. Scholastics were topping and the price turned down at the resistance.

Note that in late September even though the price hit the trend line the scholastics were at the bottom and could have popped up at any time. So that time was more dangerous even though it would have been a great time to short.

The next signal Buy #3 was on 12.9.08. End of December # 4 would have been a good time to add to a long positions when scholastics were bottoming and the price bounced off the support.

Even though there was a trend line break #5 you could have sold your position that you bought at #3 with very small loss or even a small profit had you sold when the price failed the 50 DMA. All in all you must be more vigilant when getting in on a ongoing signal and cash your chips in immediately if indicators start failing - tight stops! Protecting your capital is your most important task. At # 6 there was a new Sell signal.

Some other things to watch for: 50 and 200 DMA crossings. When 50 cross 200 upwards that means that we are in bull market (at least for a while). Also they both act as resistance and support. Clearing the 50 DMA is a big deal and when that happens a good size rally could be in the cards. After QQQQ crosses the 50 DMA; it becomes a pretty firm support; in this case it failed to support it though.

Notice that the price has been making higher lows since Christmas, which is a bullish sign, but it broke that trend at the # 5. Also notice how RSI and MACD are indicating divergences. They clearly show that they are anticipating some kind of Obama rally, but as I write; the price failed at the 50 DMA and it also broke the trend line support, so it's a still a big question whether we get the rally or not.

You can also use dollar cost averaging to get in. Let's say you have $10,000 that you want to invest. For the next four weeks, pick any down day during a bull market or up day during a bear market and buy/short $2,500 worth of ETF using tight stops. If the market keeps following the trend we are in; you have successfully eased yourself in to this trend and should the market turn, your losses should be relatively small.

Another way to do this is; let’s say you have 40k that you want to trade with. Start trading QQQQ long and short with 5k. If the markets go against you, your losses should be fairly small and if they go your way, then you will have a small profit, and then you can add to your position.

Let’s say you got a $500 profit from the previous signal; now you can risk little bit more on the next signal like 10k because you have the $500 profit that will help you to offset any losses that you may happen with this new signal, and so on. Soon you will be fully invested with relatively small risk.

- Hitting a stop loss is one of those tough spots we all face from time to time. And often as soon we act on a stop the market turns around. These following indicators might be helpful when you are facing the same situation.

For example not too long ago one of my stocks hit a stop and I sold it, but I didn’t take into account that it was 2 days before the end of the month. According to seasonality TA two days before and three days after a month’s end markets tend to rally more often than not. Big funds do their 'window dressing' at the end of the month and that affects the markets. Of course there’s no guarantees that it happens every month, but the odds for it are pretty good. Also often just before a major holidays markets tend to rise somewhat.

Another useful indicator: This chart demonstrates that there was a quite bit of buying 30 minutes before the market closed. Often this kind of buying is done by smart money and funds, and it indicates that there is good chance that the rally will continue the next morning (at least for a day or two), especially if the previous day was down or very volatile day. Average investors would not have the nerves or the capital to do this much buying that it would affect the market this much, so it had to be done by the people who are in the know/pros. The opposite; if during the last 30 minutes there is a lot of selling that often means a lower opening for the next morning.

There are traders who say that stops don't work and some say that you must give stocks room to roam and they like to use even 25% trailing stops. It is true that if you use too tight stops you end up being shaken out of lot of trades. So it does make sense to not to make them too tight.

- For shorting: 50 & 200 EMA crossover in major indexes is a sign of a bear market condition and it is usually more safe to short after that happens. In true bear market 90% of stocks will fall. During a bull market 90 % of stocks will eventually rise. The markets tend to drop much faster than rise. That's why shorting can be very profitable. Also note that EMA 50/200 are more accurate as 'golden cross' than SMA 50/200 are.

- Banks: I park some of my cash at www.emirgantdirect.com and www.fnbodirect.com they pay better interest than a regular savings accounts do. You can set them up on line. At least the interest covers the inflation and pay better than my broker. Emigrant bank charges $30 for an outgoing wire money transfer, but electronic transfers are free as are with FNBO. Emigrant does not allow transfers to or from brokerages accounts, but FNBO does. Both banks are FDIC insured. Bank of America that I use for my checking have $10,000 daily and $20,000 monthly limits. So when selecting a bank do your homework.

If you didn’t know: The definition for different kinds of funds according to www.investopedia.com/terms/e/etf.asp

Index Fund

A type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover.

"Indexing" is a passive form of fund management that has been successful in outperforming most actively managed mutual funds. While the most popular index funds track the S&P 500, a number of other indexes, including the Russell 2000 (small companies), the DJ Wilshire 5000 (total stock market), the MSCI EAFE (foreign stocks in Europe, Australasia, Far East) and the Lehman Aggregate Bond Index (total bond market) are widely used for index funds.

Investing in an index fund is a form of passive investing. The primary advantage to such a strategy is the lower management expense ratio on an index fund. Also, a majority of mutual funds fail to beat broad indexes, such as the S&P 500.

Exchange-Traded Fund (ETF)

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold. Because it trades like a stock whose price fluctuates daily, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order.

Mutual Fund

An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money mangers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the fund's current net asset value (NAV) per share, which is sometimes expressed as NAVPS.

- Share the knowledge share the wealth. I know that many of my readers are a lot smarter and more experienced on financial matters than I am and that’s why I asking your ideas to make trading even more easy, safer and profitable for all of us. Send in your favorite TA etc. Any idea that will help us to protect our capital, save or make money is welcomed.

Make sure you spell your address right. Your address will not be sold or shared.

- In a bear market overbought conditions are usually a sign that a price top is at hand, and in a bull market overbought conditions most often result in small corrections, consolidations, or deceleration of the up trend.

-During bear market you should never average down. Meaning that you keep buying as the price goes down hoping that by doing it you will get a good average price. You can do that in bull market, because in bull market the prices tend to get back up sooner or later, but during a bear you will never know how low it will go before it starts going back up again.

- When the Nasdaq is outperforming the S&P 500; this is generally bullish for the overall market.