Stock Charts (investing)

Do any of you guys use stock charts to plot out trends as you are evaluating different investments?

 

I do, but right now the markets are pretty crazy. There isn’t much logic behind why some things are up and others are down. IMO I think we are on a bubble and getting ready for another crash.
Anything in particular you are looking at investing right now? Just out of curiosity
Invest wisely right now that all I can say.

 

I am actually studying quite a bit to get concepts down before I start sinking money in. I came across this web site www.liberatedstocktrader.com that goes over everything. You can get a good basic foundation for free, but then he has a more advanced program called "pro" that is in the $200-300 range.

The website is awesome and gives a good introduction into stock trading and the markets. He lists a few sites to get stock charts on, but I was hoping to find a free one that would allow me to draw on the charts themselves. There are company's out there but I am not quite ready to drop money on them when I dont have money to get into the market to hopefully get some returns. I want to be able to practice on some free charts before I get going.

Where do you go for Charts? Is it free or do you have a membership somewhere?

 

I work at an investment bank here in SLC so we have tools like Bloomberg terminals but you can get a ton a great data by just looking in Yahoo Finance or Google finance. When I was in school we used to setup dummy accounts on investopedia.com and. I’m not sure if they still have that available but it was a lot of fun.

Because of my position I have to jump through a ton of hoops for clearance to invest for my self because of insider info. So unfortunately I’m somewhat limited as to what I can readily trade but the markets are a fascinating thing to study. Be smart and do your homework.

 

Oh I definately am. I've already lost about 40 grand in my house. I am definately being cautious with my other investments. I am becoming obsessed with learning this stuff. I have been going over Japanese Candlesticks right now. Just scratching the surface, but this stuff is just too cool.

 

look into index mutual funds. they stay current with the S&P 500 companies and tend to yield better results over a period of many years. more lucrative to the long haul investor

 

This deserves it's own thread, but I'll answer you here. I was in the same boat, I knew nothing about investing and wanted to get started. I did it all wrong, but learned from my mistakes.

I don't mess around with individual stocks. There is too much specific, undiversifiable risk. Also, each trade (buy and sell) will cost you money (about 7-9 bucks), so the more stocks you buy, the more it will shave off your profit. Then you will have capital gains taxes to pay. Buying individual stocks is the "losers game." You will be competing against the mega investment banks and hedge fund managers and their rapid trading computer models. People do make money on individual stocks, we see what we want to see, and although they will have you believe it was some divine insight they had which led to the profit, it boils down to luck, pure and simple.

150 bucks is not enough to start investing. When you get to 1,000 then we can talk. There is a whole other side of things to consider too, such as maxing out your tax advantaged space (IRA/Roth IRA, 401(k), 403(b), TSP, ext) but that is another post in and of itself.

Here is what I suggest- instead of chasing the next hot stock, why don't you buy some of these books? It will give you a solid understanding and may be the most important books you ever read.

I will teach you to be rich
All about asset allocation
Common sense on mutual funds
The only guide to a winning investment strategy you will ever need

I'm excited you have taken an interest in finance and investing. Read, read, and read, and don't jump in unprepared. Most people go through life being financially illiterate, so be wary of uncles, cousins, financial advisors (aka salesmen), and generally anyone else who wants to sell you something. Don't mix insurance with investing. And remember fees (i.e. expense ratios) do matter, and the average investor is served best by having a well diversified group of core (bond, us stock, intl stock) index funds.

 

Check Charts at Stock Charts - I'm using them and quite happy with what I have.

 

Singlecabguy,

1st lesson in making money is to not spend it unnecessarily. Go to the library to check out the books--THEY'RE FREE!!!!!!!!!!!

2nd lesson, learn why businesses fail or suceed and that will start you on the path to investing wisely. Know how to read balance sheets and income statements that you can get for just about any company--THEY'RE FREE!!!!!

3rd lesson, study Macroeconomics a little bit. With most industrialized (western) countries, their economies become more and more global every day. Find out how to tap into the next emerging market and buy companies that are positioning themselves for the future--think technology companies of 80's & 90's.

4th lesson, don'tbelieve all the hype you will hear from hundreds of so-called experts on TV, internet and myriad of other sources. Most if not all have an agenda that will put money in their own pocket. The one notable exception is Jim Cramer from the TV show "Mad Money." He has no personal investments. He's loaded already from managing a hedge fund earlier in his youth. He manages what's called a charitable trust only.

Final lesson, ONLY invest in companies/opportunities you know/understand.

I could go on forever, but like another poster said--read, read, read. Don't be intimidated by money. Your familiarization with techniques to amke money will grow with time spent LEARNING!

 

I only invest in junior mining/exploration companies because I understand the field and feel comfortable doing it. However chart analysis etc is 99% useless with small-cap mining juniors so I never bother.

 

Only one thing you need to remember:

Di-ver-si-fy.

 

I trade through Schwab and use their software. Chart analysis like they teach in books is for two types of people: geniuses or psychotics. I watched my brother in law - not a dumb guy - turn a lot of money into a negative balance through a careful and studied application of chart analysis. "Head and shoulders...cup and handle...double bottom..." Now he's starting all over.

I presently have 2 positions - Home Depot and Boeing - and just sold out all of my 3rd, Greenbrier (they make rail cars) when it hit the sell point I chose. If HD makes it back to 80, I'm liquidating that one and will wait for the next time it's down to pick some back up. I'm sticking with Boeing for now. It's got "wings", no pun intended.

To answer the OP's question, I look at a stock's recent patterns over the past 1-2 years and match that with research on what was going on in the company during ups and downs in stock price. In weird markets like this one, many stocks will oscillate between "usual" lows and highs, and I can quite often time them. Not always. Home Depot was like a roller coaster going up for a long time, and I let it ride. Now it's in the doldrums and I'll take my profit when it's back up a little. I don't have a lot of money in, keeping about 25% in cash to take advantage of a good stock that takes a gut punch (such as when Boeing's batteries caught on fire - that was a big "BUY!!" signal to me) and this is the number of positions that I can research and "feel" well enough to gamble with. I kick myself every day for not buying Netflix when it was the national laughing stock. I would have quadrupled my money.

If you don't like this kind of thing, if the thought of it doesn't excite you and make you curious, put your money in a nice no-load index fund and go 4 Wheeling! Hell, you'll probably do as well as I do at the end of 20 years. But I love running my own money and so far I'm doing very well at it. Last year I earned about 25%. This next year I may have to eat my belt and burn the furniture to stay warm.