Understanding Technical Analysis Part One

Charts are important tools used in making a technical analysis of the stock market. Though the fluctuations are marked daily on the charts, for an untrained eye it could be a bit of time before it would be able to fully understand the implications of the variations in the charts from one day to another. Candlestick charts could be very confusing at the outset, mostly because the number of indicator shapes in use is about twenty in number. However, once the person is well-familiarized with the charts, he/she would be in a better position to predict the price movements precisely.

Patterns are something that a technical analyst needs to understand fully well. These go a long way in helping to predict market trends. The analyst will often encounter the Cup and Handle pattern, in which the prices would begin at a high, reach a low level and then begin to rise again, forming a pattern much like a cup. If the cup levels out for a while before rising, then that region is known as a handle on the pattern. Those investors who buy at the handle are buying at the time when the prices are predicted to break out higher. So they stand making very good profits.

One more interesting pattern is the Head and Shoulders. This pattern consists of three peaks � the first is a tiny bump-like peak, followed by a big peak and then another tiny peak. It looks like a head surrounded by two shoulders. This pattern is not a good pattern to invest in. It is indicative of a bearish pattern, which is likely to dip more after the second peak.

Apart from the patterns there are several indicators that an analyst must be aware of. The four most important kinds of indicators are the moving average indicator, relative strength index, money flow index and the Bollinger bands.

1. Moving Average Indicator � This is the most commonly used indicator which shows the average price of a stock over a period of time. It works like an average. Suppose the moving average indicator is for thirty days, then the closing prices of the thirty days must be added and then divided by thirty. Commonly used periods are twenty, thirty, fifty, hundred and two hundred days. More the number of days considered, more stable is the index. Representation of the moving average indicator is done with a line graph. When the price falls below the line, it tends to keep on falling; but if it rises above the graph, then it tends to keep on rising.

2. Relative Strength Index � This index compares the number of days the prices are up with the number of days the prices are down. The average of the number of up days is divided with the average of the number of down days. 1 is added to the number obtained, and then it is divided from 100, and then 100 is subtracted from it. The number so obtained is the relative strength index. The relative strength index is calculated from smaller time spans, such as for 9 or 15 days. Relative strength indices range from 0 to 100. If this index goes below 30, then it may be a good time to buy as the stocks could be overbought. Bullish or bearish nature of markets has a strong influence on whether this index would be of any use or not.

3. Money Flow Index � This index is calculation from the number of shares that are traded as well as the prices they are traded for. Again this is a number from 0 to 100, with 70 being the point above which the stock must be sold, and 30 being the point below which the stock must be bought.

4. Bollinger Bands � The very popular Bollinger bands are actually a set of three horizontal lines. Actually only the upper and lower lines are of relevance. If these lines are far apart, it means that the market is volatile and prices could change with rapidity. But if the bands are closer, then the market is stable. If the prices are moving closer to the lower band, then the stock is oversold and the prices will rise. The opposite case happens if the prices are moving closer to the upper band. Bollinger bands are not often used as independent indicators. They are used in conjunction with other indicators as a sort of confirmation.

Personal Finance - Investing In Your Futurew

Investing to a lot of people is comparable to going to the doctor, you know you should but it's kind of scary, so you put it off. Does that sound familiar at all? Well, the thought that should be even more scary is what may happen if you don't start investing.

One of the biggest misconceptions about investing, whether it be the stock market, bonds, real estate, or even a 401k plan, is that you have to have a lot of money to do it, and you only do it so you can get rich.

The truth is, investing is something you do to secure your financial future and also build a retirement fund. Suppose you were downsized out of your job? Suppose your retirement is up in 10 years? By investing, you will be prepared to meet these new challenges.

That's the real meaning behind investing, planning your retirement, not becoming a millionaire. Did you know that at age 65 only 2% of the people are self sustaining? The other 98% depend on the government, social security, charity, or family for their monthly needs. This is why investing now is so important.

I've found the three biggest reasons why many people fail to get started investing in their financial future as follows:

1. Investing is just too difficult

Since most people don't use investment terminology in their everyday life, they don't understand what it all means, and they are scared off. Yes, trying to make heads or tails on blue chip stocks, index funds, etc., can seem overwhelming until you learn their meaning. Once you take the time to learn, it becomes easy.

2. There is too much risk in investing.

This is another misconception that keeps people from building their financial future. The truth of the matter is that you can decide your own level of risk in any type of investment. It can be something very low risk like bonds or even mutual funds. If you want safety in your investments you can easily have it.

3. Investing takes a lot of money.

You often hear people say they just can't afford to invest. It requires too much money. Again, can you really afford not to? Are you going to leave your future up to social security? Or your family? You can start with as little as $25 if that's where you're at. As time goes by, and your investments start growing, you'll be amazed at how fast it can build. The key is getting started. Don't wait, or put it off. By investing today you're securing a better tomorrow.

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Making a Strategy in the FOREX

It is not necessary to justify the importance of having a good strategy if you want to become a successful FOREX trader. At the same time it must be said that there is no common strategy that does not work for everyone. An individual approach is what is best for every investor. In order to build a strategy, an investor needs to make an analysis. Analyses are of two kinds in the stock market � fundamental and technical. Either one of them could be used. However, enterprising investors would use a combination of both the analyses to get a better standpoint of the market trends and plot the entry and exit points.

In technical analysis, the market trends are the deciding factors. The fluctuations in the prices are based on the trends. Investment gurus have developed their own studies of patterns of the market fluctuations over several years. This is how they can arrive at a good trading strategy.

For those who find understanding the market movements difficult, there are many tools available. However, an initial study of these tools is in order. Only then can one begin applying them to the market. Even if a single one of these tools is understood to a workable level, then it can be used; and the others could be studied further. Every tool helps to reinforce the other tools.

In making FOREX trading strategies, there are both support and resistance levels that are used. The support is actually the price level that is at the bottom. When this price reaches this level, then only any upswing can occur. While resistance levels are the upper limit prices. These are the prices beyond which the trading rarely takes place. Hence, support and resistance prices are the limits that are set for trading within a specified period of time.

In case the prices break the support or the resistance levels, then the prices would continue to move in that direction. So if the price reaches the previous support level, then it would be seen as bearish; i.e. the price should continue to fall.

In order to estimate the support and resistance levels, the price charts should be analyzed. Support and resistance levels are decided on the market trends over a period of time. Hence the longer timeframe of the charts analyzed; the better it is to determine the price and support levels. Once the support and resistance levels are determined, the traders could use this to find out when to exit or to enter a transaction.

Investors use moving averages as another tool to make their trading strategies. The simple moving average (SMA) is an indicator of the average price in a given period of time over a specific period of time. These can be plotted on a graph and used by the investors to determine whether the prices have a tendency to rise or to fall. If the prices cross above the SMA, then they keep on rising.

Trading strategies can be used individually as well as in combination. It is better if the investor has several trading tools at his/her disposal, so that an effective use of those can be made. Using many tools in conjunction would help the investor to make better decisions than if only a single tool was to be used.

Each analysis helps to supplement the other. Technical analysis can make fundamental analysis more complete, and vice-versa. A trading strategy would be built up taking several analysis factors into consideration.

The trading strategy would tell when a trader should enter the trade, how many profits to expect and when to exit the trade. This could be very helpful guidelines to the amateur trader, as well as make the decision-making process easier for the professional trader.

Investing in Mutual Funds

Because of the high risks associated with investing in the stock market, many investors are looking for a way of investing their money in a lower risk form although one that still rewards you with pretty good returns over time.

Quite simply, a mutual fund is a way of sharing the risk of your investment with a group of other people. Your resources are pooled together, and put into the hands of a fund manager who will invest on your behalf to get the best returns for you.

There are many different flavours of mutual funds to choose from, with different risks attached to them, and you can choose the best one for your aims. Some invest in higher risk stocks with the aim of making quick returns, while others will stick to more stable industries, where the gains are made steadily over a longer period of time.

Many funds will invest in non-market schemes too, including property. There are options to choose ethical investment, and investment in environmentally sound companies, so whatever your personal taste, you are sure to be able to find a fund to suit you and your needs.

Instead of investing directly in the stocks, you buy into the fund, and become a shareholder in it. The fund manager then controls how the investment is spread across the markets that

When compared to direct investment in stocks and shares, investment in a mutual fund is a cost effective and simple option. Rather than having to pay close attention to the day to day price of a particular stock, and change your strategy constantly to get the most out of your stake, the fund manager will spread the value of the fund over a larger area of the markets, and make decisions on your behalf.

This diversification across a spectrum of investments will allow him to substantially lower the risk, and thanks to the expertise of your fund manager, you can still do very well in both the long and short term

In summary, investing in a mutual fund is a way of sharing the risks associated with investment in the markets. It offers a method of hands off diversification that is managed by an expert, who controls where the money goes. The portfolio of the fund will be monitored and controlled by someone who know the market, and is keen to make a good return on your part. It offers a way of increasing the rewards that you might expect from many investment schemes, whilst also reducing the risk of direct investment in volatile shares.

Human Capital White Paper

Human Capital White Paper

Version 1.1

What is Human Capital?
Human capital is just one of an organisation's intangible assets. It is basically all of the competencies and commitment of the people within an organisation i.e. their skills, experience, potential and capacity. Other examples of intangible assets include: brand, software, design, working methods and customer relationships. The human capital asset captures all the people oriented capabilities we need for a business to be successful.

It's important to remember, however, that individuals are only an asset insofar as they choose to invest their human capital in an organisation.

Some people find the term Human Capital somewhat mechanistic, but human capital is not about describing people as economic units, rather it is a way of viewing people as critical contributors to an organisation's success. This then throws the spotlight on how businesses invest in their human capital asset, in order for it to add value. For any commercial organisation, this is an important component to understand. If a company understands how its human capital contributes to their business success, it can then be measured and managed more effectively.

Human capital management is a reciprocal relationship between supply and demand: employees, contractors and consultants invest their own human capital into business enterprises and the business enterprises need to manage the supplier. Any organisation interested in its performance will naturally ask how well they are managing this asset toensure maximum return on their investment. In the same way, all employees, contractors, consultants and providers of human capital want to ensure they are getting the appropriate return for their own human capital investing through salary, bonuses, benefits, and so on.
Understanding how and why people add value or not to an organisation is an important, and difficult, management skill for the 21st century.

Why is Human Capital an increasingly important issue?
Human capital has never been more critical to competitiveness, because the world has changed. Over the last 15 years we have witnessed a revolution in the workforce, as well as in the workplace.

The Workplace
Increasingly the developed world has evolved into a service and information economy. In an information economy, people are the critical asset and in a service economy many more outputs are intangible, as much as 80 per cent of a company's worth is now tied to its people. Access to financial capital is no longer a source of competitive advantage; our competitiveness increasingly derives from know-how, or people's abilities, skills and competence. People, the human capital asset, with the right profile and capability provide an advantage, which is not easily replicated by competitors.

The Workforce
At the same time, the labour force has also changed dramatically. Organisations know they need people to deliver value in new and different ways, and that those people they depend on have changed. For example, we see an aging, more diverse population, with more women entering the workforce, more dual-earner couples. However businesses can still struggle with a general shortage of the skills required in a service and information economy.

The war for talent in the human capital market place means businesses can't take for granted that individuals will want to invest their own human capital in an organisation. Elements, other than traditional pay and job security, need to be put in place to attract and retain top talent.

These changes have culminated to ensure that human capital is becoming a major driver for organisational performance. Forty-six per cent of Chief Executives say that finding good people and keeping them is their single biggest worry and most fear their employees are ill-equipped in terms of skills. The investment community is now probing human capital issues, yet most Chief Finance Officers say they have only a moderate understanding of the returns they get from what is often their largest single investment � people. Human capital then is a critical contributor to competitive advantage.

What is the challenge for organisations?
Human capital may well now be the most critical source of competitive advantage, but it is also the most difficult to measure. If people are a company's greatest asset, how do we quantify the value of this asset?

The phrase �our people are our greatest asset' has become a tired clich� around which real cynicism has justifiably been created. The cynicism is based on the gap between what a business says and what it does. If an organisation can't prove that its people are its greatest asset, then it isn't being measured and it can't really be managed. The quantifiable evaluation of human capital is a challenge and there is currently no accepted way of doing this. There is no single measure, independent of context, which can describe the impact of employee competencies and commitment on business performance. There are reliable methods for measuring the return on investment on physical capital, but not for human capital; it's a new and evolving science.

Causality is the issue; it is very difficult to prove links between �cause' and �effect' in a complex working and social environment. Assigning causality is a challenge because a business context is a very different social environment, e.g. is customer satisfaction really improved because employee retention has improved, or is it because that business invested in better technology and improved their product? Is an organisation getting discretionary effort from its people because they have been allowed flexible working, or because they are being paid more than competitors' offers, or even a mixture of both? Correlations are not the same as causality either. The challenge for most organisations is that if the value of human capital can't be quantified, where and how do they make the best investment in their asset, and how do they know what the return on that investment will be?

What does this mean for HR?
The pressure on HR functions to perform is greater than ever because of the critical role human capital plays in an organisation's wealth, success and competitiveness today. If the role of HR is to optimise �people performance' then businesses need to ask what �good' HR looks like for their organisation.

Increasingly it's understood that a good HR function can add significant value and make a real contribution to an organisation's performance, however looking at HR through a human capital lens puts further demands on the function. HR needs to make causal connections clear between their practices and business value. This means moving from describing good HR practice to proving it.
For decades HR has wanted greater legitimacy for their role; often without a seat at the top table. With human capital now being such a source of competitive advantage, the door is open for HR to bring to the table the value they have for many years been espousing.
But how do they do this?
The HR paradigm shift
If we accept human capital is one of the key assets driving creation of value, then HR is not a cost centre but an asset provider. It is a function that enables businesses to manage people better than other companies, but to prove this, HR needs to change its approach quite fundamentally.

Most HR functions are on this route, in some form or other, already:

� Moving from efficiency to effectiveness
� Moving from cost to value-add
� Moving from inputs to outputs
� Moving from data collection to data analysis
� Moving from traditional HR data to linking it to operational performance

Having this intelligence informs our answer to the question of what HR should be doing in order to deliver business impact.

Linking HR practice and individual or organisational performance is therefore at the heart of what HR needs to do so it can identify how HR policies translate into performance. As a minimum, HR should have reliable data in conventional areas, such as churn, absence, labour costs, time and costs of recruiting, etc but they must also have access to performance measures, such as production figures, sales targets, service level agreements and be able to make links between the two.

Increasing the capability of HR to deliver more commercially will be the key to demonstrating how HR can really add value to an organisation.

What does this mean for Finance Directors and the CEO?
The gap between a company's tangible assets and its stock market value is growing. For many businesses the tangible assets on the balance sheet represent a small part of their stock market valuation or the value to a potential acquirer. In most organisations, reporting and evaluation of human capital is non-existent. As the world has changed and human capital has become more critical to competitiveness, it has exposed the limitations of traditional accounting practices in being able to identify the real value-adding components of an organisation. The issue is, if we don't know how to measure intangible assets, how do we know whether to invest, or how much?

How do we link investment in the following areas to business performance?

� Induction
� Skills and technical training
� Management training
� Organisational roles
� Process design
� Workforce planning
� Reward management
� Retention management
� Employee feedback
� Performance management, etc

We know the evaluation and measurement of human capital is difficult and that it's an evolving science, but for most Finance Directors, understanding the performance of their human capital investments is extremely weak compared to their understanding of any other asset in their business.

Many finance professionals see people as an operating cost, not as a source of value creation. They also then treat all expenditure on human capital as a cost to be minimised, as opposed to a cost that can be optimised. Without the measures and links, however, it is hard to know how to do the latter and who in the business is responsible for that: HR; Finance; or both?

There is also a difference between internal and external reporting. Increasingly, externally a company will be assessed on the basis of the amount of information it can provide about its internal labour market and how well that market serves its business objectives. External human capital reporting required of organisations today is still limited and is largely narrative, but this may well change.

The real challenge is how to move along the continuum, using HR analytics, to deliver a picture of how human capital investments create business value. To move from generating HR information, to reporting human capital and then measuring that asset, so it can be managed.

What does this mean to Ceridian clients?
Our Vision is that "Everything we do is focused on increasing the value of an organisation's human capital and enabling HR to deliver real business impact."

The scenarios outlined previously represent a real opportunity and a real challenge for Ceridian. As an HR service provider we are dealing with HR and Finance professionals who are struggling with the issue of human capital in their own organisations. We therefore have an opportunity to create a value-add proposition that moves us out of the�efficiency' box of a classic outsourcer, i.e. just being cheaper, and into the effectiveness box, i.e. that we add value to our clients' business.To do this we need to create tools for HR and Finance in order to allow them to understand their human capital strengths and weaknesses, and then develop solutions to increase the value of their human capital.Ceridian has therefore engaged a human capital partner to create the tool that will establish the links between HR practice and business value. This will be linked to our overarching market proposition, but will be founded in sound research and development.

Ceridian will create a simple, pragmatic tool that is also academically robust to demonstrate our capability, credentials and leadership in this field. The model will be innovative and a differentiator that positions us as human capital specialists, helping HR become more commercial.

This also means that Ceridian will be �practising what we preach', opening our doors with pride to clients and prospects in terms of our own human capital reporting, analysis and management. It will also be imperative that we work with foundation clients to build compelling case studies of the evidential links between human capital and business value. It also means that for every one of our solutions, human capital management and interventions will be linked to ROI.

Why tracking your investments is must?

First thing first, planning your investments is must. Financial planning involves various steps. First you need to define your aim. And than you need to act to achieve your aim. S electing the correct investment, allocating assets to the short-listed avenues based on the final aim. Now if you think that this is what is only required to be done than you are mistaken and you are on your way to loose money and control over your investments. Its is must that you track your investments on a regular basis. Tracking investments on regular basis does not mean that you change your portfolio every now and than. Also remember the golden rule of investment i.e., investment is always successful in long run. Tracking means keeping a close watch on your investments, understating the way they move upward or downward. An intelligent investor always tries to be more composed and don't get panic with daily fluctuations and takes the corrective action at the right time. There are a number of reasons why you need to keep a track of your investments. One of the main reasons in change in sensex or stock market over a period of time. Here, you must understand that the change is due to change on time period. Another reason could change in market factors. One more very important reason is change in political status of the state. Least but not the last factor is the environment. We have always restated that investors should hold manifold of investment portfolios, each catering to a particular need or objective. This again highlights the significance of tracking investments as it has a direct bearing on your future aims. For you, keeping a usual track of their investments provides you with the opportunity of identifying washout in their portfolio. As a result you can avoid failures and non performing investments.

Not Worth The Gamble

As a rookie stock market trader, I visited a place called Loss Vegas on a regular basis. It was teeming with would be investors and traders with aspirations of becoming the next stock market millionaire. Some were fully aware of the chances of success being less than ideal but pressed on regardless. I could be counted among the ignorant masses.

Why is it that 9 out 10 stock traders will fail? The reason is simple. 9 out of 10 people who enter the market are gamblers masquerading as traders. I, in fact, was a gambler and didn't even know it until I nearly faced financial ruin in the stock market.

In order to become a successful trader, you must have a winning strategy. In contrast, most beginning traders systematically make the same mistake over and over again. A flawed trading strategy will eventually wipe you out of the markets. This article will help you formulate a winning strategy.

Many principles of running a successful business can be applied to stock trading. Having a trading plan is essential to the success of your new venture. Consider this trading plan to be your road map that guides you to stock trading mastery. Skipping this step will ensure your permanent residency in Loss Vegas.

The trading plan must outline why you are trading the markets. Here's a heads up. It's not to make money, initially! The number one objective of a stock trader is to trade well. Profits are a by-product of trading well. Counting profits while practicing your trade is counter-productive to your success. You certainly wouldn't want a firefighter thinking about how much his paycheck will be while your house is on fire, would you? Focus on your trade. The money will come.

The next step in the process is execution of the plan. This includes:

1. Performing Market Research-weighing the risk/reward ratio

2. Pinpointing Entry Points

3. Money Management- where to place protective stops

4. Exit Points

5. Plan Execution Review- Did you trade your plan?

Above is the exact process I use when trading stocks and options. Deviating from your trading plan can be detrimental to your progress in two ways. First, the effectiveness of a trading strategy cannot be accurately measured when a trader is inconsistent in the execution of a trading plan. And secondly, changing your strategy in the middle of a trade is hazardous to your wealth. An example of this is moving your protective stop in the opposite direction of your trade. This allows for a wider, potentially costly stop loss cushion.

Implementing and executing a proper trade plan will certainly tip the scales in your favor of becoming a successful trader. Fewer, less frequent visits to Loss Vegas are a very good thing. Happy trading.