Lesson 3 - The concepts and basic tools used in technical analysis process

The chart types present on the stock market analysts use many different kinds of diagrams for analysis, including 3 types of charts are used in a way that is most popular: the chart (Line chart), then chart ...
Currently on stock market analysis professionals use many different kinds of diagrams for analysis, including 3 types of charts are used in a way that is most common: line chart (line chart) , then definitely chart (bar chart), tube chart (Candlestick chart).
Line chart (line chart)
This chart ever commonly used on the stock market, and also the type of chart used in a common way of Sciences used to simulate the phenomenon of economic and social ... and it is also the type of chart used by people in the longest time. But now the stock market by developing science and technology, evolution of the stock market is increasingly complex, so this type of chart less and less is used most on the modern stock market. Currently it is mainly used on the new stock market went into operation in a short time, matching the periodic order matching method for each session or more times in one session but the level of transactions can not reach be used as stock market tuc.Uu order matching method of this type of chart is easy to use, the main reason is because it is used on all stock markets around the world ever today. Currently this chart types are rarely used for analysis on the modern stock market because the stock market today is often quite complex changes, the variations in short time with relatively deviation high, if this type of chart used for analysis is often less effective in the analysis.
Examples of the types of charts (line chart):

Dynamics of the VNIndex(As of 18/01/2007)

Then definitely chart (bar chart)
Examples of chart types then definitely (Bar chart):

Chart tube (Candlestick chart)
Examples of chart tube (Candlestick chart):

This is schematically improvement of certain key chart (bar chart), it is the Japanese discover and apply on their stock market first. Now it is slowly gaining popularity on the most modern stock market worldwide. This chart reflects most clearly about the volatility of stock prices on the stock market in the form of matching the periodic order matching.

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Lesson 2 - The assumptions and the basis of discussion around the application of technical analysis in stock market

The analysis assumes the technical basis is the study of market volatility, primarily through the use of graphs aims to predict the trend of price volatility in the future. The term "market volatility" refers to three variables ...

 The base assumptionsTechnical analysis is the study of market volatility, primarily through the use of graphs aims to predict the trend of price volatility in the future.
The term "market volatility" refers to three main variables to provide information for the Technical analysis is the price, trading volume and number of contracts not settle.
There are three assumptions as the basis for access to Technical Analysis:- Movements in the market reflect all;- Move with world prices;- History will repeat itself.
Market volatility reflects all:
This may be considered on the basis of Technical Analysis. Any theories, other analysts want to be accepted, you must first understand and accept this assumption. The technical analysis for any factors that can affect the price such as psychology, political or financial factors of the business or organization. . . are reflected in market prices. Thus some have argued that the study of price movements is all what we need and can not really oppose the idea.
On the basis of common understanding about the price reflects the fluctuations in supply and demand. The technical analysis shows that when prices rise even though, for whatever reason, then demand to exceed supply and market prices. We all know and agree that the main driving force of supply and demand are the basic economic factors, they do shape up Bull Market or Bear Market, but the graph itself does not make markets move up or down. Graphs can only reflect market conditions only.
Price movement in the trend:
The concept of trend is extremely important concept in technical analysis techniques therefore need to understand about this assumes that you want to learn more about it deeply. The purpose of the establishment of a graph depicting the changes in the market price is to identify trends early reviews, which will enter into transactions on the basis of these trends. Actually here is technology that automate repetitive trends from the previous price is the purpose of technical analysis is to identify the repetition of these types of price volatility in the past appeared to can leverage the experience and make decisions accordingly.
From this assumption we also have a result as "a business trend in motion will continue the trend of it and rarely reversible." This result derived from the law of one of the movements of Newton, so it is a statement as follows: "a trend in motion will continue the trend until it its reversal." Look common to all research-based approach to the trend were to follow the current trend of prices until signs of reversal.
History will repeat itself:
Most of the content of technical analysis and the study of market volatility must be aimed at the study of human psychology. Such as pricing models, these models have been identified and demonstrated for over 100 years, they like the picture of the price movement chart. These pictures shows the psychology of the market is going up or down. The application of this model has worked effectively in the past and assume that will continue to be effective in the future because they are based on analysis of studies of human psychology that human psychology is often not changed. Thus this assumption can be stated that: "The key to capture the future lies in the study of the past" or "the future is just a repetition of the past"
The debate surrounding the application of technical analysis in stock market
Prediction of fundamental analysis as opposed to in the Technical Analysis
While Technical analysis focuses on the study of market volatility, the analysis focuses on the basic economic forces of supply and demand - the cause of price movements. Fundamental analysis approach toward analysis of the relevant elements affecting the market price in order to determine the real value of a stock - the value is determined by supply and demand and ultimately to determine the point of sale market on the actual value (overprice) and points sold under market value (underprice). Both approaches the fundamental analysis and technical analysis are to identify trends that prices may move but the approach is different: the fundamental analyst studies the causes of the variable while the home market analysis techniques to study the impact of the changes it.
Some investors consider themselves followers fundamental analysis or technical analysis but there are a lot of repetition: Many analysts have applied the basic principles of technical analysis in their work while his most technical analysis much less have time to follow the basic analysis.
Often in the beginning stages of a number of important changes in the home market Fundamental analysis does not explain and do not support what the market prepared place. It was at the time of this sensitivity analysis are two schools that showed the most different. These two schools returning to the same at some point but if the investor wants to rely on those points to make sure the basis for its decision, it will be too late.
One explanation for this contradiction is "the role the market price guide for the analysis of basic research" or you can say the market price as an indicator for leading the fundamental analysts. Those studies of technical analysis can be found that price changes have an impact on the market, or that they have the rhythm of the market, and those who follow fundamental analysis to be affected that fluctuations. The time market prices surged and serious discounts are recorded in history are often due not aware or less aware of the changes and market fluctuations until it is widely acknowledged then redirect itself and move in another direction then.
And timing analysis are opposed to each other?
Return to Technical analysis, decision-making process can be divided into two phases and timing analysis. With the market "leverage" such as major futures markets (markets with the derivative instruments such as futures - futures and option contracts - Options), the determination of the time involved in a very important role by fully analyze your case and in accordance with market conditions but you can still lose money. Whether the deposit level for the future market is small (only about 10%), then even a very small price movement in the wrong direction can influence investors pushed out of the market and take the entire amount deposit it. Contrast in trading on the stock market, when an investor discovered he was deviating from the market for a certain class of shares, he just simply hold that stock and wait until back stock market trends. Those who invest in the futures market will not have that privilege. Strategy "buy and hold" does not apply to investment profits on the futures market.
When the analysis can be applied in accordance with fundamental or technical, but to answer the question of timing entry and exit from the market, the answer lies entirely in Technical Analysis. The timing is very important to buy or sell decisions. Thus when considering the steps taken by investors before making a final decision can be seen the application of the principles of technical analysis is not to be missed at some point of the process decide whether in the first part of this process when conducting investment analysis can be applied as fundamental analysis.

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Lesson 1 - History of Technical Analysis

History of Technical Analysis from more than 100 years ago, from a man named Charles H. Dow. He is founded on the Wall Street Journal (The Wall Street Journal). After years of research, in 1884 he gave only the average of closing prices ...

 History of Technical Analysis from more than 100 years ago, from a man named Charles H. Dow. He is founded on the Wall Street Journal (The Wall Street Journal). After years of research, in 1884 he gave only the average of closing prices of 11 stocks most important U.S. market at that time. William Peter Hamilton is really brought life to the study of the Dow by continuing research and published the book "The Stock Market barometer" (Barometer stock market) in 1922. Throughout the 1920s and 1930s, Richard W. Schabacker who went deep into the study of Dow and Hamilton, Schabacker, who introduced the concept first on Technical Analysis. Schabacker served as editor of Forbes magazine fame. He pointed out that the Dow theory signals that come up with an average market index remains valid and important when applied to graphs of each individual stock. This was his show and prove in his book "Stock Market Theory and Practice, Technical Market Analysis and Stock Market Profit." Thus the first basis of technical analysis appeared in the Dow theory, but not until Schabacker - the father of modern analysis techniques followed by Edward and Magee to "Technical Analysis of Stock Trend" ( book was reprinted eight times) and today is John Murphy, Jack Schwager, Martin Pring, ... then the real birth name "Technical Analysis" and is improving, summarized into a theoretical system important in investment analysis on the stock market in particular and financial markets in general.
Perspectives on Technical Analysis
The principle of success in investment securities is based on the assumption that in future people will continue to repeat the mistakes that they have acquired in the past.
The stock market or any market which are never reflect the real value of a commodity that is exchanged within which it reflects the value that investors are aware that it's worth and as world.
The price of any securities which are not spent for the actual relationship between supply and demand which is reflected expectations of future supply and demand.
So "Technical analysis" is what? Many observers considered Technical analysis is a collection of tricks and need to exercise really serious. Those who apply after the results of that exercise is also known as "wizards". Many people know about the correctness of this work but they still raises questions about the accuracy in predicting the trend of the stock market and the markets of other goods. Itself in those who use technical analysis does not have a consensus of opinion on the nature of technical analysis because technical analysis can be understood purely as a science that can also be understood is an art.
Understood by the widest Technical analysis tries to study the status of "current health of the overall market or of each stock with the aim to predict future price movements based on the business by experience has been with the technical model (or model techniques) market has emerged in the past and apply again when the same model appears. Fundamental assumption of technical analysis is the knowledge we have about the price and chart patterns in the past will be used "reference" to determine the price trend in the future how to market to particular field.
Some definitions have been made about Technical Analysis
Nick and Barbara Apostolous definition:Technical analysis is "the process of forecasting stock price movements in the future based on analysis of past fluctuations in prices and the pressures of supply and demand affect prices." However, this definition makes technical analysis seems more nearly equivalent to fundamental analysis - is the process of estimating the value of securities or commodities by analyzing the financial and economic conditions underlying each company, every industry, ... "
Norman Fosback, in his book "Stock Market Logic":"If the nature of fundamental analysis is the valuation and identification to buy or sell stocks when the market price deviations from real values, the Technical Analysis is based on two fundamentally different theories completely. First, the subjective estimate is too vague and irrelevant and the second is price fluctuation in the future can be predicted by analyzing past price movements, analyzing the supply relationship - demand and other factors have a direct impact to the market price. "
Clifford Pistolese made quite adequate definition as follows:"Technical analysis is the use of price charts and trading volume as a basis for investment decisions. Fundamental basis for this approach is that the information on price and volume charts reflect on all that took place about buying or selling a stock. Because stock chart summarizes and reflects the results of the transactions made to Technical Analysis is the only basis for making investment decisions. "
R. W. Schabacker, the father of modern analysis techniques have been described:Technical analysis as "a new science." Schabacker explained that all the basic factor analysis are reasonable to bring down mobile market situation and they are evaluated, and stored automatically included in the balance carried on the stock chart. He further describes the characteristics of the stock chart or diagram other commodities as a perfect memory of the market and confirm that the main value of a price chart beyond the mind the fact that a picture recording transactions in the past.
Schabacker specific definition of the following:"The technical analysis of market volatility is an aspect of the analysis, based on the phenomena arising from the market, ignoring the effects of the elements of fundamental analysis and the weak other factors. Actually Technical analysis can be explained simply as a way to speak again with the consideration by the school's basic analysis. Fundamental aspect of market analysis aimed specifically concerns on factors such as issuing corporate stock, business enterprises, potential, past activities, current income and future , balance sheet accounting, financial strength, quality of business leadership team, ... The technical factor is what can be considered as overall factors affecting the ability to price fluctuations shares after ignoring the elements of fundamental analysis and the factors that have not really affected. "
But according to Edward and Magee are:"Technical analysis is the science of the record, usually in the form of graphs, the trading activity takes place in the past cause price changes, trading volume, of a security ... any general or with the entire market and then will be based on the "picture of the past" to infer that the trend may occur in the future. "
It is no coincidence that the book "Technical Analysis of Stock Trend" by Edward and Magee is replicated back to 8 times, this is the book offers the most complete and most basic understanding of technical analysis, so to be able to understand it is very necessary to study this book carefully. Here will add some quotes to help the reader understand a bit more "... technical analysts always told the full reason is the amount of information, analyze data that is basically obsolete and research no use value. Because sentiment is not interested in the past and even now, the market is always forward, trying to reflect the growth in the future, consider measuring and to balance all these estimates, predictions of hundreds of investors - those who look into the future together, but under completely different angle and with colored glasses. In summary, the market price is made up by the market itself, including all of the basic information that people want to statistical analysis to find out along with many other sources of information as important as or larger than many ... "
Edward and Magee also offers the following four basic points of technical analysis:- Market value of securities is determined only through interaction between supply and demand.- Supply and demand is influenced, at any time, by hundreds of factors that influence some reasonable, some almost absurd. Information, opinions, psychology, prediction, ... (may be true, could be wrong, ...) on the future mix and mingle with each other and with other elements necessary to form the overall balance of the whole market. No one person can grasp and quantify these things that the market will perform.- Ignoring the small fluctuations will generally exercise price under the general trend of market prices, the trend is stable over a relatively long period.- Changes in market trends shown by the shift of equilibrium of supply and demand, whether for any cause can be identified earlier or later than the volatile markets.
Finally we will consider the definition of Steven B. Achelis, author of the book "Technical Analysis from A to Z":"Technical analysis is the study of prices, the basic tool is a diagram, in order to improve the efficiency of investment activities ..."
After the definition of technical analysis is just so simple but specific nature, how performance will be studied in the next section. I invite to see the next part of Dow theory.

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A number of indicators and criteria for investment opportunities - Part 2

ROE Rating How investors evaluate the profitability of the equity shareholders to be able to see a possibility of capital create as many words and the percentage of its profits to decide investment company X this without investing in another company Y has the same industry? ....ROE RatingHow do investors assess the profitability of shareholders' equity to be able to see a possibility of capital create as many words and the percentage of its profits to the company investment decisions X without investing in another company Y has the same industry?.We looked at EPS, which is closely related to the determination of the profitability of the company on a stock that investors buy into. This index does not reflect accurately the profitability of the entire equity capital outside shareholders but shareholders as capital stock may also include retained earnings of the business development fund , differences in release ... Quite accurately reflect the possibility that's ROE (return on equity) value expressed as a percentage (%).The value of ROE is calculated as net profit (net income) in the accounting year (from January 1 to December 31) after paying dividends to preferred shares receive dividends but before payment of stock News to common stock divided by total capital owners, ie the net assets (see all NAV index is?) at the balance sheet.This index is the most accurate measure do you evaluate a shareholder's capital and accrued leave (possibly retained earnings) creates much the same words. Since then, investors have the basis of reference when deciding to buy company X or company Y has the same industry together.The higher ROE companies demonstrate effective use of shareholder capital, this means a company balance harmoniously with the same equity loans (because if the borrower shall pay interest reduce profits) to exploit its competitive advantage in the market to increase sales, increase profits.This ratio helps investors evaluate companies in the following angles:* When the company ROE rate equivalent to interest on bank loans (about 10% / year), the level of relative evaluation, please review the profitability of this company because if the company does well only profitable at this level there will be no borrowing companies profit from bank loan sufficient to pay interest on bank loans. Of course in this case just put the company has bank loans.* The company achieved higher ROE interest rate on bank loans, you should find out if the company had bank loans and fully exploit the competitive advantage not to market the company can evaluate the potential increase this practice or not in the future. If there is expanding market share need more capital, loan capital and the company can still be profitable after paying interest on these loans range.However, in addition to loans to pay principal interest was so greatly affected the liquidity factor in the company, so the balance of debt and equity is also the problem of corporate management.* In addition, this ratio also helps investors evaluate companies in the same industry for the investment decision to select one of the same company that occupation, mode selection is of course ROE ratio is high, as noted above, the higher the company's ROE is likely to increase competitive advantage, the stronger, then the competitive advantage of other companies will be reduced.Analysis Yield index for securities investmentCurrent Index Yield (Rate of return on their stock price) is a tool for investors to decide for themselves should choose to invest in enterprise? ...Current Yield Index (Hay Yield is often called) is what? This is the index used to reflect the relationship between the investor dividends received from companies with stock prices that investors buy into it is the ratio of dividends to shareholders receive securities on shareholder wealth purchases- Analysis of the relationship between the investor dividends received from companies and prices investors buy shares, we find the following two cases+ Case 1: If investors buy the stock finished up the stock price and wait to enjoy the difference is called capital gain (capital gain), then investors will not care that much to Yield. Yield at this time had no idea what's really important to them compared to the P / E, EPS as mentioned in the previousIn this case, investors have analyzed the relationship between Yield and EPS. If Yield low, high pressure, they expect the company to use the profits to reinvest profits to increase next year to help P / E decreases. Now they can easily sell stocks with high P / E for capital gains+ Case 2: If investors buy the stock to long-term investment (such as to make your purchase) then of course they are interested in profit annually, quarterly. Now, only dividends they earn. When the Yield is the main target for their interest.When high dividend companies think is no need to use retained earnings may be due to: loan companies use the company has no plans to expand production or market saturation company. When it does not profit is expected to increase much in coming years means P / E does not lead to much reduced investors do not expect to increase their stock price in the future.Usually the profits earned from the company to pay lower dividends than the profits earned from the sale of stock. For example, companies Refrigeration Electrical Engineering (REE) from the date of equitization far dividend investors get only 283% of par value shares (one hundred thousand dollars) while increasing the share price is 1350% mean increase 4.7 times. So for investors on the stock market is that their only concern is that capital gains in Congress every year to winter c drive dividend decisions, they usually vote no dividend more.In short when investing you should understand and evaluate all kinds of index analysis to have a more holistic look at the relationship of these indicators of laying out the investment decision is correct. States after we will help you to drill further analysis of the relationship between company assets and property to your shareholders do not confuse the external surface and that the true nature of assets within the company.Index NAV (Net Asset value) is what? NAV calculation and evaluation of an objective indexNAV index is closely related to the valuation of assets and property company shareholders. Since then, investors will not be confused between the surface and the outside world in the true nature within the company.Normally capital by companies constitute the main source of shareholder equity and loans. The funds now generated for the company assets such as machinery, factories ... and other current assets khacphuc for daily business operations of the company. So have at equity companies (also called charter capital) expressed low external assets may not be large, which is formed from assets contributed equity which may in part from loans . Sources of shareholders equity is called net asset value of the company, this value is an indicator of NAV (Net Asset Value).Net Asset Value NAV including Equity (capital) capital formation from retained earnings. Capital gap by issuing shares to the public higher denominations (Share Premlum) business losses in reserves and reserve development.People often use the indicator NAV / Share (net value of each share issued) to evaluate the book value of stocks and buying shares in this index is calculated by dividing the total equity value (total assets less any intangible assets all debts except bonds and securities is entitled to priority) divided by total shares issued.This index helps investors evaluate companies to invest in some aspects as follows:- Assume that the company has a face value of 100,000 which is 120,000 such NAV, it means that companies have to produce and accumulate capital could profit from the difference to the release ... Thus, investors buy shares for $ 120,000, they would still buy the same true of real value on its books.- If the NAV is 120,000 but the company profits high gain, the investor can buy shares at NAV higher than expected profits to increase as it will have a cumulative dividend and NAV will continue increased again in the future.- If the NAV is 120,000 VND but companies are still holes that will further reduce the NAV, you have to buy with no VND 120,000 or higher. This is a difficult decision and it risks depend on the assessment of investment analysis of companies in many aspects of accurate information about the company to decide the future. here only a simple rule that investors accept that investment is "high-profit high risk".In summary NAV is the most conservative measure for investors to decide to buy shares of a company's real value of the company. In fact the most attention is a matter of "profit" is always top priority because it is the main basis for assessing the profitability of using the company's capital.

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A number of indicators and criteria for investment opportunities - Part 1

P / E is only reflecting the relationship between the market price (current market shares) shares with a net profit of the company for one year ....
P / EThese indicators reflect the relationship between the market price (current market shares) shares with a net profit of the company for one year.
For example, from the financial statements of Bank A '(ACB). Profit after tax in 1999 of the ACB is 51 564 million, divided by the total number of shares: 151.025 VND. Price stock purchase agreement ACB (unofficial market) recently was 1.7 million, so P / E of the ACB with 1.7 million: 151.025 = 11.25 times.
This index is commonly used as a tool for investors to look through the stock cheap or expensive. P / E higher mean higher stock purchase and vice versa. On the other hand, investors can buy with P / E value for hope in the future company profits high P / E is low at that time as the following example: profit in 1999 of a confectionery company 12.7 billion, P / E of 3.4 and profit in 2000 is 14.5 billion, P / E of 2.9.
Investors buy stocks with P / E of 3.4 times compared with profit of 12.7 billion by 1999. If 2000 is 14.5 billion profit, the investor purchased the P / E of only 2.9 times the company's profits have increased and if the profit increase again in 2001, then this P / E will decrease Also, when the investor wants to sell out to other investors and looking at it to see why investors before purchasing P / E is 3.4 times 3.4 times their purchase also okay. The deal is done! Previous investors sold P / E of 3.4 times (or higher if buyers accept) than the profit in 2000, it means that they sell higher than the price at which they bought in 1999.
The problem is that P / E is formed many times this game, here are two cases occur:
- If the investor accepts high P / E, the risk may be higher due to higher purchase price than the company achieved profitability.
- On the other hand buy high P / E can also be low risk, because then the company may buy valuable companies as Coca Cola or Vietnam Airlines, for example, the company is growing steadily regulations.
Since then form a new amplitude P / E for each company, each industry and each of the market environment. Following the trend on the stock market world, the following areas tend to accept the P / E high (not including powerful corporations): banking, securities finance, information technology telecommunications, biotechnology, manufacturing high-tech industries.
Currently, Vietnam's financial experts receive the P / E market in Vietnam from 8-15 times, which means the financial sector banks or other reputable company, the P / E in the market Vietnam from 10-15 times and other areas may be under 10.
However, you just think, if not profitable company means that negative profit, the market share price divided by earnings in a year which is a negative number, how that have P / E be.
Therefore, the P / E is just a relative number, investors also need further evaluation and other financial indicators related more technical in nature.
EPS Analysis
EPS can be understood simply as an indicator to evaluate the company itself generate profitability from capital contribution by shareholders worth. These indicators directly reflect fully the company's intrinsic ability to generate net income (profit can pay to its shareholders) on a share that shareholders, not from capital contributions up or down the stock price on the stock market. EPS higher profit companies create greater shareholder and vice versa. For example, if reached 5,000 dong per share, then it means that companies make a profit of 5% on shareholders capital (assuming the face value of each share is 100,000).
Thus, if a company EPS was only about 8-9% a year, only the interest rate on bank deposits, you should not buy, that's what you must consider before deciding to invest. If you buy the two cases occurs:
- One that you know and hopefully the next time the company can increase profits due to many reasons such as the company is expanding the market, bringing to market new products, upgrading the effective management more ... This decision reflects a real company.
- Second, you find that the stock market, the psychology of other investors more interested in buying shares of this company may have reasons to be favorite company, business is "trendy "such as the rush of dot com companies (Internet companies) in the world so

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Pick Stock by the method of CANSLIM

Many experts consider CANSLIM is one of the most effective methods from a variety of analytical tools currently stock. "CAN SLIM reflecting the harmony between the basic methods of analysis with technical analysis method investment securities" - John Neff, one of Wall Street's trees, said ....Many experts consider CANSLIM is one of the most effective methods from a variety of analytical tools currently stock. "CAN SLIM reflecting the harmony between the basic methods of analysis with technical analysis method investment securities" - John Neff, one of Wall Street's trees, said.
 CAN SLIM is a collection of seven letters of the first seven factors which William is very effective when value stocks:C: Current Quaterly Earnings Per Share (net income per share of the latest quarter)William noted that most of the good stocks are increasing profits over the same quarter a year earlier and higher rate of increase of stocks proved more promising. According to him, before investors purchase the shares should consider the drastic increase of stock returns, namely the growth of net income per share in last 3 months.But to find out the increase in profit where and how? William said that investors can research the financial statement audit of the company are listed, along with the exploration of other information channels such as newspapers, acquaintances ... It is important for investors to appreciate the reliability and consistency of information, makes it possible something is not right, if the company's revenue increased 20%, while net profit increased by only 5 %.A: Annual Earnings Increases (increase in annual net profit)According ONeil, good stocks are stocks with a steady increase in profits over the previous 5 years. Investors should pay special attention to the stock increases annual earnings stability and achieve over 25%, but should be sensitive to business cycles of each sector and company. According ONeil, this criteria can help you eliminate about 80% of bad stock.To get the exact increase profits, investors should study all relevant information to companies that want to invest. This information includes the history and characteristics of companies, financial situation, the details of the issuance of shares and underwriting organizations share. Investors can find this information in a statement released in the financial statements of the company or from companies investment advisory services. The investment decision should only be given when you've got enough information about base stocks as well as growth in annual net profit.N: New Products, New Management, New Highs (new products, new management, new ceiling price)William's studies indicate that stock prices will be derived from a certain internal factors. These factors are usually the company's new products, new management, new management methods or new ceiling price of the shares on the stock market.Therefore, never redundant if investors interested in this internal factors. Considering that these factors are the stability, no expression of mutations for the worse, then that would be a lot of stocks with growth prospects in the stock market.S: Supply and Demand (supply and demand)In business, the law of supply and demand are influenced greatly to production costs, and investment securities is not an exception. Stock prices are also affected by supply and demand rules. William said that stocks of public companies, large scale, product quality is not always worth buying, because the demand of large stocks, while the supply and prices are usually less was pushed up artificially, does not reflect the actual value of the stock as well as difficult large profit.The number of stocks with low circulating new market has great potential and is likely to increase prices than other stocks with large circulation numbers. It follows that, the shares are held top management with a large percentage of common shares that are highly secure. William particular attention to the company shares and stock acquisition of companies with long-term debt over equity moderate, because he is by the higher rate how many companies will increasingly have to cope with stress much interest in the future much. Investors should compare this ratio in his company plans to invest with the average debt ratio in the company in the same industry, and further analysis is likely to pay more authentic assessment of the the company's debt.L: Leader and Laggard (stocks and shares top lag)According ONeil, market investors should only buy 2 or 3 best stocks in the top group of existing shares, the rest should spend money on stocks with profitability in the future. In particular, investors should avoid buying stocks with high growth but unsustainable, such as share prices follow the trend, according to highlights ... because this stock is considered stocks lag, not sooner or later lose value.I: Institutional Sponsorship (the support of the financial institutions and investment)Financial institutions often invest here is the competent authorities, the government agency specializing in financial investment. These agencies may hold a certain number of shares of certain companies, so that the company will have the support and strong support from these agencies, a very favorable conditions for businesses, causing stock prices soared. However, a large number of financial institutions, investors holding shares becomes unfavorable factors, because it means that supply will be limited by the agencies rarely ever want to sell the stock their votes, pushing the liquidity of the stock is low.M: Market Direction (market orientation)Whether you exactly when comments on the six criteria listed above, but to market-oriented criteria for the mistake you will have to 5 out of 7 stocks you buy will lose value and can make you lose hole. Market factors is important because it strongly influences the stock price. When a batch of the same industry share a depreciating market, the stock price of the company you choose will definitely drop by. Conversely, if the stock price of these companies increased by the development of the stock market, you are also buying into a "following" there are positive indications. Thus, William emphasized the importance of the study of graph stock prices fluctuate daily, weekly and monthly before each stock investment decisions.One of the biggest successes of William is to invest in shares of pharmaceutical company Syntex. This is bold action and daring, in the judgment of the professional investors at the time, by Syntex is a pill maker in the world first. But the results have demonstrated William's decision is correct. Only a short time later, Syntex announced quarterly revenue growth of over 300% and shares of Syntex from where also "anonymous" with $ 100 / share has become growth stocks with price 550 USD / share in less than six months. Thanks to enormous profits from Syntex that William had founded the company money to William J. ONeil & Company itself.George Soros, one of the largest investors on Wall Street, to conclude that: "There is no field which offers fast and large profits by investment securities." There are plenty of people see stock investing is a game hoping to improvise a lot of money quickly. However, the field of this exciting investment seems to be no room for the emotional decision. For William ONeil, like many "trees" others on Wall Street, the stock selection decision should be based on the analysis and coordination between the elements of quantitative and qualitative terms. The key analysis in stocks is to find stocks with the biggest growth potential in the moment you buy them. In other words, you must have the judgment skills, review and analyze problems with the formulation of an appropriate investment plan to determine time of purchase in the stock up and sell weak stocks.

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What is Fundamental Analysis?

Fundamental analysis is the analysis of financial condition and business situation of the investment company relying on the balance sheet accounts and income statement of the company to review the company's quality as the company's development over time, which predict changes in stock prices. The value is the primary goal of fundamental analysis. ...
Fundamental analysis is the analysis of financial condition and business situation of the investment company relying on the balance sheet accounts and income statement of the company to review the company's quality as the company's development over time, which predict changes in stock prices. The value is the primary goal of fundamental analysis.Some analysts often use discounted cash flow method to determine the value of the company, while some people use the price earnings ratio (P / E) ... Thus, if the distribution closely integrated into the technical rules of supply and demand of securities on the market, fundamental analysis goes deep into the internal affairs of the company issuing the securities. The basic analysis will evaluate a stock as value or the current value, and this will confirm the real value of a company with an intimate relationship like with the financial characteristics : capacity development, the risks that companies may encounter; cash flow ... Any deviation versus any real value is also indication that the stock is below or exceeds the value real. Therefore, analysts often see it as a guide for investment decisions in the future. For example, a long-term investment strategy should always cover all the elements of fundamental analysis as:
* The relationship between the current share price and financial factors that can be measured.* This relationship is stable over a long enough period.* The deviation of the relationship has been revised at the appropriate time.
Also a lot of investors are using the basic analytical methods to choose the stock has good prospects but are undervalued market, ie a way of value investing.
If you have decided to play the stock, the investor make an intelligent and prudent. Make decisions based on information drawn not only from technical analysis (supply and demand), which mainly had to fundamental analysis (the capacity and operation of companies). Fundamental analysis to calculate market sales, the index of financial and legal situation and the system of corporate governance in order to find worthy business investment. Technical analysis to find the time to conduct a timely transaction. To pour money into a profitable place, investors need to know all about fundamental analysis and technical analysis can be calculated because the value of shares that do not exactly know where to choose the right time investment, the analysis also becomes meaningless. There are now many investors do not need to know the tools but still investing style is very dangerous chance. In the worst case, it is they who make the market collapse. To market the healthy development can investors need to have knowledge and experience on the stock market collective investment by small amounts prior to the stock liquid before and monitor marketing school carefully before investing large sums.
When fundamental analysis became common knowledge of all investors, the stock market work more effectively: continuous participation of institutional investors makes stock prices more reasonable listing; information from the listed companies have started creating immediate response to the stock price; investors more interested in production and business activities of enterprises and information daily on the market. And when fundamental analysis was the main basis for the price development is "playing" the stock will become the investment of the real financial investment.

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