There are red lights, green lights, blue lights and spot lights. There are orange lights, pink light and flash lights. There are search lights and micro lights. And the one you must obey is the stop light. If you don't stop when the light is red you could easily have an accident and lose everything you have, even your life. These different types of lights alert us to possibilities and dangers. Is there a light that goes on that tells us whether the stock market is going up or down; one that is green to invest or red to sell?...

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When will the stock market stop going down and start up again? If we knew that we'd all be jillionaires. So what do you do now while stocks are going down and stealing away your money every day? What does history tell us? Here is one very interesting fact. From 1920 to 2000 there were 3 bull markets that lasted about 16 years each. It seems the most recent one ended at the end of 1999. What is most scary about this is that after these long bull markets each one was followed by another period when the stock market went down or sideways for another 16 years....

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Most stock market traders have a favorite technical indicator. The one that they have the most confidence in. The one that, from experience, they trust the most. Or the one that they always look at first. For some it is the RSI. Others like the Stochastic or the MACD . Or one of the literally hundreds of other indicators that are available. Well, I love the MACD. And the Stochastic is also a favorite. But there is one indicator that I refer to more often than any other. However, before I tell you what it is, it is important that this discussion is placed in context....

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When an individual investor wants to roll up his sleeves and do some research in the pursuit of the next big winner in the stock market, the place many start is in the small cap sector. As with the other capitulation sizes (capitalization is a stock's market value), no one can completely agree on a precise definition, but corporations under $2 billion are often considered small caps. It should be pointed out that there are two asset classes below small caps. Micro caps are companies between $50- 300 million and Nano caps are below $50 million....

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Being wrong is OK, but let's not carry it to extremes. That applies to everything, but let's limit our discussion here to the stock market. I have been trading for several decades and was an exchange memebr and floor trader for 17 years. You learn fast there or you go broke in a hurry. As you can see I managed to hold my own for a few years until I found the secret and started to become a successful trader. Every professional trader I know knows the one great secret and that is to keep your losses small....

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We are already in it, but you can't see it. It doesn't look like the one we had in '99. Like the magician who has you watching what he wants you to and with the other hand he is doing something else that is what is happening in the stock market today. The magician is the Dow Jones Industrial Average, the Nasdaq or the S&P500 Index. These have John Q. Public mesmerized. The Nasdaq has given back 63% of the rally high since September 17 low while the DJI has only sold off about 18%. As you see these averages going almost sideways or down and your own stock and mutual fund portfolio is doing the same so you come to the conclusion that the market isn't going anywhere right now....

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Over the past few months, several investment professionals have brought up the topic of the down-and-out company of the day and whether to buy now as a speculation. Last year, K-Mart was the big news, and everyone wanted to know whether this was a good stock play. Today the news is focused on WorldCom and its downfall. Thus, some people are pondering this stock for quick profit potential. Here's the scoop: Don't buy WorldCom. I know! It's impossible for MCI to disappear: they're too big, they're too popular, their service is excellent, etc....

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Do you have a financial planner? Does one ofyour friends have a financial planner? Maybe youtake your advice from your broker. As I havesaid countless times before a broker will makeyou broker. And a financial planner won't do anybetter. I know. You thought they would. It is not that he is a liar. (I hope.) It isthat all financial planners and brokers aretaught the Wall Street method of "making money".Unfortunately it doesn't work. The basic things that have been pounded intotheir heads are false....

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Systems traders know that if they are following a "good" system that gives them a winning edge, in order to "cash in" on what that system has to offer, they must have a strong commitment to following each and every trade recommendation, even if the system is currently experiencing a drawdown. They are emotionally and financially prepared to do so because they already know the historical maximum drawdown that the system has incurred before making new stock trading highs. They also know that the worst time to abandon a system is just after a drawdown and just before, it surges to new highs....

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For some "long term" would mean holding a stock position over the weekend. For others, it may mean holding a security for at least 1 year for the purpose of declaring a long-term capital gain, thus saving on taxes. The rigid definition of a long-term investment in the stock market would be holding a security for a minimum of 5 years, to as long as 30 years. I'm going to tell you my definition of a long-term investment in a security by telling you a story. A true story! My Mother worked as a teller in a small bank in Dover, New Jersey....

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After finding the price of a particular stock, usually the next number everyone looks at is the P/E ratio. P/E is the ratio of a company's share price to its per-share earnings. A P/E ratio of 10 means that the company has 1 of annual, per-share earnings for every 10 in share price. (Earnings by definition are after all taxes etc.) A company's P/E ratio is computed by dividing the current market price of one share of a company's stock by that company's per-share earnings. A company's per-share earnings are simply the company's after-tax profit divided by number of outstanding shares....

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