As strange as it seems, in all this wild volatility the stock market’s weekly patterns are still playing out normally.

For instance, options expirations take place on the third Friday of each month. The week before the expirations week tends to be negative. The week in which the expirations will expire on Friday tends to be positive. And the week after the expirations tends to be negative.

October has been a wild month in which the market has closed up or down by triple-digits 26 of the last 29 days, the one-day moves for the Dow being as much as 936 points, and averaging 350 points. That is far above normal volatility.

Yet through it all, the weekly patterns have prevailed.

This month’s options expirations took place on Friday, October 17. The week before (the week ended October 10) the Dow closed down 18.2%. The week of the expirations, the week ended October 17, saw the Dow close up 4.7%. I don’t know where the market will close today, but as this is being written mid-day Friday, October 24, the week after the expirations, the Dow is down 5% for the week so far.

It’s almost bizarre that the patterns could overwhelm even these economic and market conditions.

I can’t prove what causes the pattern around the monthly expirations, but for many years I have been expressing my suspicions. Those suspicions are that the huge program-trading firms use the power of their huge automated sell-programs to drive the stock market down the week before the options expirations week. They can then buy the highly leveraged options and futures that will expire the following week for pennies on the dollar. They then use the power of their huge buy-programs to drive the market back up the week of the expirations. They can then sell those about-to-expire options they bought for pennies on the dollar the previous week for huge profits. And the next week they unload the stocks they bought to drive the market up the previous week, adding to any negative activity in the week after the expirations.

Who are the program-trading firms? They are the largest investment banks and brokerage firms short-term trading for their own accounts. The top five for program-trading activity last week were Credit Suisse, Goldman Sachs, Merrill Lynch, Morgan Stanley, RBC Capital (div. of Royal Bank of Canada). The program-trading activity of the top-ten for the week accounted for 37% of the total trading volume on the NYSE. Their potential influence is obvious.

I know, I know. It couldn’t be, since market manipulation is illegal (except for the Fed when it rushes in with a big rate-cut, or a surprise weekend announcement, when it fears the market will tumble the next day).

Nor could it be huge buy-programs in the final hour of the day that often manipulate an ugly market up to a better close. No, that’s just millions of investors suddenly deciding at the same moment that they need to be in the market.

But still, given the market volatility this month it might be interesting to revisit how manipulators in the early 1900s used volatility to keep investors out of the market near important lows.

In the early 1900s there were no market regulations, so market manipulators did not need to hide their activities, and afterward could even openly boast about what they had done.

In his 1930 memoirs, old-time brokerage firm owner Richard D. Wyckoff described how at the market top in 1906 John D. Rockefeller and some of his friends manipulated the market, “to keep public investors buying in a volume that would allow these large operators to successfully unload into the strength to take their profits from the bull market.” Their methods, which I recounted in my 1999 book Riding the Bear – How to Prosper in the Coming Bear Market, were so simple, mostly relying on the media to pass along misleading information to the public.

Later in his memoirs he described what happened at the subsequent bear market low, saying, “Rockefeller ordered a private telegraph wire run into his house, and began socking away bundles of securities in one of the downtown vaults. The Morgans were also now on the buy side, and quietly telling their friends to get aboard again. We tried to interest some of our public clients. They would have none of it. The market was now being manipulated to keep the public fearful and out of it, until the bankers’ portfolios could be loaded up again at the low prices. So when the market moved up too much off the bottom, as the bankers bought, and some of the public ventured in, the advance was promptly knocked on the head by manipulative selling. The result was a narrow whipsawing market in which traders, long or short, could not make any money, but the accumulators could continue to accumulate.  It’s a well known principle of manipulation that more people can be tired out and made disgusted with their holdings, thus induced to sell at the low prices, by the whipsawing at the bottom that grinds them down until they give up.”

But of course, market manipulation is illegal in the modern market, so it is just an interesting observation.

Meanwhile, the market’s next potential weekly pattern is what I call the ‘monthly strength period’, which tends to begin around the last trading day of the month, and runs through the fourth trading day of the next month.

Could the sell-off this week be setting up for that possibility?

Sy Harding publishes the financial website http://www.streetsmartreport.com/ and a free daily Internet blog at http://www.syhardingblog.com/. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beating the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

There are any number of reasons why a trader hesitates before a trade.  The main one is lack of planning.  Without a plan, there is no degree of confidence a trade will be successful, it’s all wishful thinking. Unless they are outright gamblers, traders usually have a strong need to protect their assets and avoid risk. This is especially true for beginning traders. It can take a long time to build up sufficient capital for serious trading. By that I mean sufficient capital to be able to trade for a living. It is quite understandable to fear losing all or part of your initial capital. Beginners tend to seek absolute certainty before taking a risk, and gaining true confidence in you ability to trade successfully can take time. Unscrupulous marketers of mechanical trading systems and methods take advantage of the beginners fears and lack of confidence by advertising “sure-fire” “magic” ways to trade, instead of revealing the truth about the difficulties in becoming a consistently successful trader.

When it comes to short term trading, there isn’t very much time for long deliberations. Market conditions are in continuous flux. Decisions need to be made relatively quickly, and if one waits too long to execute a trade, he or she may miss a significant opportunity. The reasons for hesitation are everywhere, and traders must be aware of them, and create a plan to prevent them.  Let’s look at a few of the things that cause traders to hesitate:

The complex charting software available these days tends to increase hesitation.  Traders think that the more confirmation they can get from indicators, the more certain they can be that a trade will be successful.  However, all indicators lag the market. The notion that an indicator can somehow predict what will happen once a trade is entered is nothing more than wishful thinking. An indicator may give some degree of confidence about entering a trade, but the indicator cannot trade the trade, only the trader can do that. Once a trade is entered, it becomes entirely a process of management. It’s tempting to look at as many indicators and signals as possible. Doing so, however, can be very time consuming. That’s why seasoned traders advise looking at only a few if any key indicators.

Hesitation is often related to a lack of confidence in the trader’s trading strategy or trading ability. There are numerous reasons for such lack of confidence. Some of the reasons are shallow and mostly on the surface, like being distracted by watching financial TV while trading.  Other reasons are more deep-seated, and actually reflect psychological problems dating all the way back to early childhood.  A trader may not believe that his or her trading plan is adequately developed.  Nevertheless, they are determined to trade, so they muster up their courage and finally jump into a trade almost guaranteeing that the outcome will be a matter of pure chance.  Some traders may question their trading plan because they know that they did not spend enough time preparing it. Sometimes hesitation is intuitive, warning the trader to avoid the trade. All too often, traders are not tuned into their own intuitive feelings.  In the case of intuition, hesitation can act as a motivator. If the trader feels the hesitation is because of lack of adequate preparation, then that trader must learn to spend more time preparing for trades. By studying the markets a trader can come to see new higher probability setups, thereby reducing doubt and indecision, and in turn stop the hesitation because of more adequate preparation.

Hesitation sometimes reflects a deep desire to be right and a fear of being wrong. It has been our experience that many of the people who are attracted to trading fit into this category.  Great care must be taken by physicians, engineers, scientific types, and mathematicians, who seem to be the most prone to this type of hesitation. They are often perfectionists afraid to face their inadequacies. By putting off a decision, they don’t have to face their limitations, and can pretend they are better traders than they really are. If I had the time and space, I could give you dozens of examples of this kind of hesitation.  The perfectionist’s reality states that everything must be in order and follow rules.  They think strictly inside the box.  They want everything to be perfect, so they continually second guess and doubt themselves and what they are doing. They believe that they cannot cope with being wrong. This occurs in trading decisions as well as other life decisions. Extreme perfectionists often think that once they make a bad trade, it will be the start of a downward spiral and a complete blowout of their trading account.

Hesitation very often relates to low self-esteem or other deep-rooted psychological issues. We see these more times than we would like to.  Traders with low self-esteem usually lack confidence, not only in trading, but other areas of life. Beneath it all, they doubt their ability to trade, and hesitate making a trade until they the guilt of not doing so overcomes their fear.  At that point in time, they enter a trade out of pure compulsion driven by guilt.  This exposes them to a trade with no real plan to support it.  They become victims of pure chance.  We also find that traders who hesitate may have a conflict regarding their success. They can actually fear success.  They have been told by parents or others that they were no good, that they would never amount to anything, that they were “bad.” These people strive for success at one level of their consciousness, but at a deeper level, they secretly believe they cannot attain it, or do not deserve it.

Identifying, directly facing, and eventually eliminating a problem of hesitation is the only way to truly deal with it. Chronic hesitation will eventually destroy the confidence a trader needs for success. If the problem is not dealt with and the traders continues to hesitate, miss important market moves, and see his or her equity begin to dwindle, that trader runs the risk of becoming a phantom trader, a pretender, becoming convinced that the imaginary trades being made are real. If you are prone to hesitation, it’s vital that you deal with this problem early in your trading endeavors. Identify the reasons for it, confront the problem, and make changes as soon as possible. These are changes you have to make within yourself.  If you will truly engage in self-examination with the object of eliminating hesitation, you can trade become consistent and successful in trading profitably.

To be successful in your stock trading business you can’t control the equity market, all you can do is identify the trend and go with it to profit, that’s not to say that you cant be confident with your trading, but you need to realize early in your career That is perfectly acceptable to be wrong, and as long as you stick to your exits and discipline, you are running a equity business within a large market, you are never truly in control. You can never be reliant on tips or one trade to secure your financial future, nor can you build a trading business using a mechanical autopilot system. You have to continuously work, tweak and evolve with the market, successful traders adapt and maneuver, even after you have developed that strategy, it will require ongoing effort and monitoring.

Successful stock traders know the main part of their trading business is the development of their trading skills. When you have a set of trading rules that suit you and you are happy with what you have, you need only improve your skills to implement them; this will take much of the stress and anxiety out of the equities market. When you begin to remain consistent and disciplined you can then create a dynamic trading business that will help secure your financial future.

Once you have an stock trading strategy that is profitable, try to remain very consistent and subject yourself to the trading opportunities it identifies. Be careful not to over analyze a bad week, make sure when you adapt a strategy there are sound rationales and data that support you change to avoid losing your original hypothesis for which the strategy was original focused. There are many articles out there on the web that you should keep searching for a different  system to improve your trading, and we strongly suggest trying to stick with what you have and see it through, you need to give things a chance to work through variable stock market conditions.

Disciplined Trading

The Equity Scholar Team

http://www.equityscholar.com/

After reading this book and applying some of the lessons taught, I can say that I am a better investor in the stock market now. Before, I was only a rookie. I will explain to you why.

This book teaches both the fundamental aspects of selecting stocks which Adam will show you. The technical aspects to trading is illustrated by Conrad who traded his way out of bankruptcy using very good strategies. He easily makes US$5000-US$7000 a month trading stocks and options. That can replace anybody’s salary anytime, won’t you agree? His record is US$22k++ in a single month.

One of the important concepts mentioned early in the book is to invest in the stock market and use the power of compounding. You can be an automatic millionaire by the time you retire using this technique. All you need is patience and some consistency in investing. This was how Warren Buffet became the richest man by investing in the US market and let his investment returns compound.

The rest of the book explains four strategies to grow your funds in the stock market depending on which level of an investor you are currently at with the returns and time horizon you are looking at.

The first growth strategy is the most basic level for novice investors which teaches you to achieve compounded returns of 10%-12.08% annually by buying the market or buying sectors or industries that are outperforming.

The second growth strategy shows you about value investing which can achieve you an annual return of 15%-25%. This method requires you to buy great companies at huge discount and sell them for a huge profit. Warren Buffet uses value investing to pick his stocks. You will learn the nine criteria of value investing to pick stocks that investors like Warren Buffet or George Soros would.

The third growth strategy explains to you about momentum investing which you can achieve a higher return of more than 25% at a shorter time like 3 to 6 months. This involves picking stocks that are about to increase in price significantly due to market optimism. Adam shows you seven steps to screen for this kind of stocks.

The last growth strategy is the most advanced of all, which allows you to net a handsome 100%-500% returns in one day to 3 months. This strategy involves the buying and selling of stock options which is trading. Trading allows you to make money in any direction, be it up, down or sideways. The authors have dedicated 2 chapters to explain the fundamentals of options and clearly illustrated with examples on a few commonly used strategies for reader.

I enjoyed this book very much as it was clearly written and provided a practical approach to investing and trading. This book has given me a good foundation as a beginner to prepare me for more advance strategies and implementation. I strongly recommend this book to anyone who wants to start investing or trade in any stock market and does not know how to start.

1.Very less initial investment is needed.2.Can be done as a side business because very less time is needed to trade.3.It may let you earn money fast and allow for fast liquidation.4.It is easy to learn the tricks of the trade and how to earn profit from the share market.

Therefore, it is important to have at least a working knowledge of the trading system before you start investing so that you do not waste time and money. Moreover, having basic knowledge helps avoid dependency on brokers. Given below are some of the basic terms related to trading.

* Shares- It is a document issued by a company entitling their holder to be one of the owners of the company.* Investments- They are commitments in terms of either money or capital to buy financial instruments or other assets in the hope of getting profitable returns in the form of interest, salaries, revenues, or enhancement in the value of financial instrument. * Trading- Many people confuse this term with trading. While stocks bought with a motive to sell them are part of trading, the intention to earn income from dividends or holdings for long term may be termed investment. * Bulls And Bears- A bullish market in the trading system is one where the economy is in its best state – people easily find jobs, gross domestic product (GDP) grows, and stocks rise. A bear market is the opposite of a bullish market. It is the condition of recession, falling stock prices, and economy doing really bad. * Initial Public Offering- IPO is an offering or flotation issued by a company issuing its stocks in the market and offering it to the public for the first time.

It is also important to know that there are two ways – on the exchange floor and electronically – to execute a trade.

Online Trading System

Online trading system is a new way of buying and selling stocks. It can be one easy option to invest a small amount, gather information about trading secrets and trading terminology, make an analysis using easy tools, and then make an informed decision. Online trading involves virtually no paperwork, and you can get a statement of the transactions made online anytime. You can invest anytime and anywhere while trading online.

Online trading just demands registration and opening an account with online service providers online. An online trader gets three accounts when he registers online:

* Trading account which enables a person to trade shares trading online. * An Internet-enabled bank account for online money transfers.* A dreamt account where the shares get stored.

After reading this book and applying some of the lessons taught, I can say that I am a better investor in the stock market now. Before, I was only a rookie. I will explain to you why.

This book teaches both the fundamental aspects of selecting stocks which Adam will show you. The technical aspects to trading is illustrated by Conrad who traded his way out of bankruptcy using very good strategies. He easily makes US$5000-US$7000 a month trading stocks and options. That can replace anybody’s salary anytime, won’t you agree? His record is US$22k++ in a single month.

One of the important concepts mentioned early in the book is to invest in the stock market and use the power of compounding. You can be an automatic millionaire by the time you retire using this technique. All you need is patience and some consistency in investing. This was how Warren Buffet became the richest man by investing in the US market and let his investment returns compound.

The rest of the book explains four strategies to grow your funds in the stock market depending on which level of an investor you are currently at with the returns and time horizon you are looking at.

The first growth strategy is the most basic level for novice investors which teaches you to achieve compounded returns of 10%-12.08% annually by buying the market or buying sectors or industries that are outperforming.

The second growth strategy shows you about value investing which can achieve you an annual return of 15%-25%. This method requires you to buy great companies at huge discount and sell them for a huge profit. Warren Buffet uses value investing to pick his stocks. You will learn the nine criteria of value investing to pick stocks that investors like Warren Buffet or George Soros would.

The third growth strategy explains to you about momentum investing which you can achieve a higher return of more than 25% at a shorter time like 3 to 6 months. This involves picking stocks that are about to increase in price significantly due to market optimism. Adam shows you seven steps to screen for this kind of stocks.

The last growth strategy is the most advanced of all, which allows you to net a handsome 100%-500% returns in one day to 3 months. This strategy involves the buying and selling of stock options which is trading. Trading allows you to make money in any direction, be it up, down or sideways. The authors have dedicated 2 chapters to explain the fundamentals of options and clearly illustrated with examples on a few commonly used strategies for reader.

I enjoyed this book very much as it was clearly written and provided a practical approach to investing and trading. This book has given me a good foundation as a beginner to prepare me for more advance strategies and implementation. I strongly recommend this book to anyone who wants to start investing or trade in any stock market and does not know how to start.