WHY TECHNICAL ANALYSIS?

When it comes to investing in stocks, it is important that investor is able to conduct thorough analysis of his/her choice equity. Beyond analyst recommendations having a personal check on true price pattern is indeed very crucial for any serious investor.

Two major models for following the equities market are the.Fundametal Analysis which bordered more on getting to the main reason behind price movements and the Technical Analysis which deals strictly with price patterns as dictated by traders action on the floor of the exxhange.

You will agree with me that, it is better to tread the path dictated by many investors patronising the market than relying solely on.your own perceived impact of a particular fundamental news. Two heads they say, is better than one, now tell me what happen when you.have free access to the idea of all traders in the market on a daily basis. That is what TA offers its users. At the end.of every trading day, you open your chart, see the general judgement of traders, link it with past trading patterns and take informed investment decision.

Although TA do not guarantee a 100% accuracy just like no model will, it helps investora anticipate the future. Please dont forget that having the idea if future possibilities place anyman at an advantage position above peers.

Are you willing to take several advantage of market fluctuations to enrich your portfolios? What you need is the basic understanding od technical analysis charting tools. It remains your sure guarantee to winning trades.

For short course in Technical Analysis of the equities market plus charting tools fully converted to an end of day Nigerian equities, call Segun on 08098865598, 08037155684. Thank you

[6/7, 09:40] Investdata 2: What is averaging down?

Averaging down refers to the purchase of additional units of stock already held by an investor after the price has dropped. Averaging down results in a decrease of the average price at which the investor purchased the stock.

Averaging down allows investors to lower their cost basis in a stock, thus reducing the amount the stock must rise in order to show a positive return. However, if the stock continues to fall,losses of such an investor will be greater since more shares are now owned.

For the purpose of illustration let us use Wapco as an example 

Suppose an investor holds 100 shares of Wapco stock that was purchased at say #60.00 per share for a total sum of #6000.00. Following a market price drop to #35.00 per share, the investor purchase 100 additional share of Wapco for a total sum of #3500.00. 

This results in an average price of (6000 + 3500)/200 shares = #47.50 per share, lowering the original cost per share by #12.50 i.e (60-35)/2.

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