Educational articles

Major market indexes and how they are comprised

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Australian share investors are aware that the major indexes locally are the S&P/ASX200, and the All Ordinaries. Investors are also aware of overseas indexes such as the Dow Jones and the FTSE. But many may not be aware of how the indexes are comprised and what they represent. Here we list the major indexes that traders use to evaluate each global market and how each index is calculated. Dow Jones This is an index which tracks the stock price movements …

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7 Indicators Showing Economic Growth

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The state of the economy plays an important part in the stock market.  Analysts evaluate the economy is great detail as it affects the decisions they make on what sectors or stock to recommend. A strong economy would instigate a different trading strategy compared to a weak economy. These are the seven signs which show that the economy is recovering and gaining strength. 1.Strong employment numbers To see economic growth there needs to be an increase in Gross Domestic Product …

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6 Different Investment Approaches for Your Risk Level

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There are many different trading approaches available to investors. The selection of the trading approaches should take into account the level of risk the investor is willing to take on, the investment time horizon and the life circumstances of the investors. For instance an investor who is retired will need income to fund their living expenses where as an young investor who is still working can engage in more risk as retirement is still a long way off. See below …

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11 Consequences of Trump’s Tariffs

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US President Donald Trump recently announced a 25 per cent tariff on steel imports and 10 per on aluminium. These tariffs are likely to have drastic repercussions, affecting the economies of many countries. These are the 11 different consequences resulting from President Trump’s import tariffs. Steel makers are winners as they can essentially charge more for their products. Bluescope Steel (ASX:BSL) has a US arm which could charge more for their products. Aluminium companies in the US can charge higher …

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Using Bollinger Bands in Trading

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What are Bollinger Bands: Bollinger bands were devised by a technical trader named John Bollinger. They represent volatility indicators. We wrote about volatility in our previous article. Bollinger bands consist of a moving average, an upper band and a lower band. The middle band represents the 20 period moving average. The upper band is two standard deviation of price plus the 20-day (Simple Moving Average) SMA. The lower band is the middle band minus two standard deviations of price. The …

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