The Bull Hunters Guide

If you missed last weeks post, be sure to check out stock market investing mistakes part 6. This is our last entry in the series on the seven worst mistakes that people tend to commonly commit when investing in the stock market.

These are the kinds of mistakes that you should have seen coming, but most never do. You can avoid the embarrassment and regret that accompany these kinds of mistakes if you just take the time to learn about them and prepare yourself. That’s exactly what this series of entries was designed to do.

Don’t Forget Technical Analysis

The last mistake we’re going to talk about is the ignoring of technical analysis. When most amateurs “analyze” the stock market, they make use of qualitative or quantitative analysis.

They might be dimly aware of the school known as technical analysis, but usually they consider it far too… well, technical, to be of any use or interest to them. Chances are they just take a look at the charts and graphs that are normally associated with this method of prediction and their minds go blank.

In reality, as complex as technical analysis can be, there are some basic and fundamental techniques that are really quite simple to grasp and which can be quite helpful when the time comes to decide upon your next investment.

Technical Analysis Techniques

For example, buried amongst all those charts and graphs, you can find things like the “moving averages”, which show the overall performance and closing prices for stocks over a span of time, such as the last 100 days. With this information in hand, you can see at a glance whether the overall movement of a company has been up or down.

Furthermore, you can easily take in other important statistics like volume of purchase, which, when coupled with just a little common sense (and the type of knowledge you gain from this blog), are powerful tools for predicting the future movements of the market.

Well, that’s it for this series. Join us next time when we start looking at a new aspect of the market that’s sure to excite and educate. Until then, happy trading!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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Today, we’re going to wrap up our series on stock picking strategies. Over the course of this series, we’ve looked at the stock picking strategies that are most commonly employed to great success by those who’ve been in the investment game for a while. While we recognize that no one strategy is going to produce a winner every time, we thought it was worthwhile to look at these notorious techniques to see what each one had to offer in comparison to the others.

As is fitting for a series like this, the last stock picking strategy we’re going to look at is one that is completely different in every possible way from everything that came before. While up until now, the underlying basis of every strategy we’ve covered has been the principle of fundamental analysis, today we’re going to turn that on its head by looking at technical analysis.

Technical Analysis

Technical analysis is focused almost entirely on the view of the market as a whole, with an eye towards its predictable trends and future prices, rather than the makeup and foundation of any one company. As a result, it’s the most predictive of stock picking methods, and in some ways the most radical. It is not without those who swear by it, though.

Technical analysis asserts that just by looking at the prices on the market, we can learn a lot about where that market is moving, because prices tend to move in trends. Working from the maxim that history tends to repeat itself, technical analysts often invest in those companies that show good trends based on market charts, rather than the intrinsic value of the company behind a stock.

Lookout For Market Movements

For that reason, many decry technical analysis as a stock picking strategy with no long term usage. And indeed it isn’t. That said, it never claimed to be. Because a technical analyst is constantly on the lookout for market movements, he or she tends to spend little time sitting on any one stock for very long. They prefer to soak up the profits (or losses) from rapid movements, and then move on, rather than worry about the long term gains to be had from any one stock.

That wraps up our series on the most popular and arguably effective stock picking strategies. Hopefully by now you’ve learned enough to start developing your own strategies, and that they’ll pay off for you in the long run. Join us next time as we embark on an all new avenue of exploration in the exciting world of stock market investment.

Thank you for hanging around for Bullhunter’s second investment series: Part 1 – 10 of Stock Picking Strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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