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With an increase in the number of people who own smartphones social media has come to be one of the fastest growing markets. This makes social media stocks a great investment that is likely to be beneficial to the investor. There are however some social media stocks that are doing better than others. Most have actually failed in being good investment options as shown by progress from the last 10 years. So, which social media stocks should you buy? Only those that perform well will be profitable to you. If you have been thinking of looking at the trend before you invest here are 4 social media stocks to keep an eye on.Wall street sign

Facebook (NASDAQ:FB)

Facebook is undoubtedly the world’s largest social media site. It receives over 1.84 billion users every month. The company also owns Whatsapp and Instagram which only adds to its number of users even more. These have 1.2 billion and 600 million users respectively. The facebook Messenger app has more than a billion users. With so many users, Facebook is able to reach very many people all over the world. This is why many advertisers choose Facebook as their preferred medium of advertisement. It is actually the second largest display ad company. With this revenue from advertising comes money into the pockets of investors.

In 2016, the number of monthy active users increased by 17% while the $8.8 billion revenue was 51% higher than the years before.

In 2017, the Zuckerberg led team is introducing new ad products, making video ads better and the number of users rising. These strategies combined with the existing ones are expected to improve the revenue by 37% and the earnings by 28%. This gives it very good prospects for the future and should definitely be watched.

The best part about Facebook stocks is that they are not expensive. Its trailing P/E is 21 and while the forward P/E is 40.

Weibo (NASDAQ:WB)

This is a Chinese microblogging platform that is at times referred to as the Twitter of China. It mixes the best of Twitter with the best of Facebook and Reddit. There are many celebrity powered account but users still get to have threaded conversations and create groups based on their interests.nasdaqcity

Weibo’s largest shareholder is Sina while the second largest is Alibaba. Other people can buy shares of this social media platform as well. Why should you invest in Weibo?

The company is growing very fast. In 2016 its total revenues grew by 43% to $212 million from the previous year. The GAAP net income increased by 125% to $43 million while non-GAAP earnings increased by 134% to $77 million. This made Weibo one of the fastest growing social media platforms.

This year, Wall Street expects Weibo to grow its revenue and non-GAAP earnings by 51% and 62% respectively.

How much does the stock currently cost? The forward P/E is 39 which though expensive, it is worth a try if its growth is anything to go by.

The Meet Group (NASDAQ:MEET)

This company was also known as MeetMe. It has many social media apps like Skout, hi5, Tagged and MeetMe all of which are integrated. In the first quarter of 2017, the company registered an increase in Mobile daily active users by 75% while the total users increased by 87%. There are a total of 8 million users with 2 billion accessing the apps daily. Users spend on average 40 minutes online and each watches about 23 minutes of video content a day.

On first glance you may want to compare this smalls social media company with the likes of Facebook. However, this one is smaller but the growth that is has shown and what is expected is tremendous.

The first quarter of 2017 brought in $20.1 million in total revenue with the mobile revenue growing by 61%. The management of the company predicts that the revenue will grow to over $30 million in the second quarter and $128 million for the whole year.

With the company saying that it will spend 20% of this year’s revenue on marketing the number of users is likely to grow more and the revenue as well. The future is bright for this social media stock.

nyseMatch Group (NASDAQ:MTCH)

This company is the owner of many popular dating sites and apps like PlentyOfFish, OKCupid, Match.com and Tinder. Tinder is the biggest among all these with over 50 million users. Last year it accounted for 92% of the company’s revenue.

In the last quarter, the number of paid member plans per month rose to 5.7 million and the total revenues increased by 20%. Experts predict that in 2017, Match Group will see a rise of 8% and 11% in revenue and earnings respectively. That growth may seem a bit slow but it is because the company is selling everything they own that id not for dating. When they concentrate on the dating apps and sites, you can expect a revenue that will grow by over 20% in 2018.

As for giving you value, Match Group is one of the best choices with a forward P/E of 15 and trailing P/E of 25.

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Day-Traders

Day trading is transacting in a financial instrument single or multiple times within a day sometime u to five or six time as with the pattern day trader rule. It is a very risky involvement as the price of a tool is very volatile in the short term. If practiced with a degree of caution and temperance day trading can be very profitable and give you the big bucks. The secret is arming yourself with tons of information, a mindset willing to take the risk and a platform to do so. This part is especially risky for newbies if they don’t exercise restraint and stick to a plan. It is imperative to know when to enter the market and know when to take the money.

Trade entries are the determinants of success of a day trade. It is not an easy monkey see monkey do affair but a lot of thinking has to be put into coming up with a trading strategy. The best time to come up with a plan is after the close of business when the daily chart has more information than an M5, M15 or H4 chart. It is imperative to understand that a bad strategy will affect the ability of a trade to generate any meaningful profit.

The following tips should come in handy when you choose to day trade.

Choose the perfect moving average.

To Perform the pattern day trader rule, do the necessary homework. Knowledge is power, and no amount of knowledge is wrong unless it is for insider trading. It will give you the continuous feedback on short-term price action, and you can be able to make decisions much easier. Intra-day bars together with moving averages tell you when the right time is to enter or exit the market. It adds one more parameter to judge technically biased day trading policies.trading-cartoon

Do enough research

At the back of your mind, you should know that you are going up against algorithms that millions were poured to develop and very experienced traders. It is of critical importance to be armed with not only the information about the company but also with information about the socio-political environment of the enterprise in question. Read journal, newsletters and watch the news and be in the know of any minute detail that might affect the price of the stock. Make your research extensive and make a list of those companies related or not that you want to perform a day trade in. The aim of a day trade is to capitalize on the smallest changes in the price of the stock, so every detail counts.

Make use of limit orders and other trade tools to maximize profit and reduce risk.

Limit orders in the pattern day trader rule are placed above or under the current market price to minimize loss. The decision of under or above is dependent on the position you take. In the long position, for instance, a limit order shall be placed below the prevailing market price and vice versa. If the price goes down below the market price your order is placed as long, the converse is also true. Features such as stop loss and risk allowance should help you stay within manageable limits of risk and losses. You should understand high risk is good but can also be of detriment to a trading strategy.

Practice using a demo simulator.

Most demo simulators provide real time information on markets, but you trade using virtual currency. You can put the pattern day trader rule strategy through the paces and analyze defects in it and fix it without using real cash. This will not only boost your confidence but will also give you the exposure to the volatility of the markets. You get to analyze the market by actively participating through a screen. It will also help you build discipline.

Have a plan and stick to it religiously.

The market has a very bitter way of keeping people in check. It is of utmost importance to pre-plan your trades. Write down a list of companies interest you. Be true to self about the levels of profits you expect and know that the market is not a zero-sum entity and that it is your plan that is key to unlock benefits.

Trade in only the best opportunities.

There is no rule anywhere that says you must trade on a particular day. Trade in what you’re sure about. When the market is unsettled and not favorable relax and focus on learning. Do not follow alerts by other people head on without knowing what they mean. Take the strategies of very reputable traders and use them if possible. After you getting enough exposure is when you can be bold enough and modify or introduce your techniques.daytrader-desk

Stay level headed and avoid jerky judgment.

The fluctuations in a market can cause even an experienced trader to lose it. Stay grounded and stick to the plan. In this circles, it is important to plan your trades and sell your ideas. Do not withdraw or buy into the market because it’s what everyone else is doing. Having your own identity is also important.

Stick to your budget

Have a limit as to what amount you are going to trade, know how much your risk limit is and set a surplus for the margins. Do not put all your saving into the market with the hope of making a quick score.

Choose the right financial instrument

Avoid illiquid and penny stocks. Make deals in stocks that move large amounts of share as you’re sure when you want to withdraw someone will always buy your shares.

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Businessman-hand-touching-Candlestick-ChartCandlestick charts are a technical analysis tool that packs data for multiple time frames into individual price bars. There are many significant benefits of candlesticks. While a line chart gives you only one data point for a stock at any point in time, candlesticks actually give you five: open, close, low, high and direction of movement. This is a major advantage when your trading decisions are based entirely on price action.

Completed candlestick charts are used in stocks, equity, foreign exchange and commodities trading to predict price direction. Proper color coding adds depth to candlesticks.
Today, candlestick charts are used internationally by day traders, swing traders, investors, and premier financial institutions. Candlesticks can be used in all time frames, whether you are a long term investor or a day trader.

What are some of the benefits of candlestick charts?

Easy to understand

Whether you are an amateur with regard to technical analysis or professional stock exchange trader, you can easily understand candlestick charts.

Give unique and more detailed market insights

Unlike bar charts which show only the trend of the move, candlestick charts additionally show the force that has brought about the move.candlestick

Provide early indications of market turning points

Candlestick charts can send reversal signals in a few sessions , rather than the several weeks needed for a bar chart reversal signal. This helps a trader to enter and exit the market with better timing.

Ideal for all markets

Candlestick charts can be used in the stock market, forex market, commodity market and can be a powerful trading tool for option trading.

Different parts of a candlestick chart

A candlestick chart has various parts with each of them having a different meaning.

Upper shadow – This is the top of a candlestick chart and shows the highest price.hand-drawing-a-market-bar-chart The body – A candlestick chart can have a green or red body. A green body signifies a bullish trend while a red body signifies a bearish movement. The shape of a candlestick body can either be short or long. A green , long body suggests that buyers are the ones controlling the market and the price is increasing. On the other hand, a red, long body suggests that sellers are controlling the market and the price is decreasing.

If a candlestick has a short body, it means that the market is uncertain. The shorter the body, the harder it becomes to predict the direction of the market.
When a candlestick lacks a body, its termed as Doji, meaning the trend is neutral. Neither the buyers nor the sellers are in control.

Lower shadow – This is the bottom of a candlestick chart and it shows the lowest price.

Basic candlestick patterns

Long black candle

It represents a bearish period in the market. During a trading session, the price of the stock was high and low in a wide range and it opened near the high and closed near the low of the day.

Long black candle

It represents bullish period, meaning prices were all over the map during the day, but the stock opened near the low of the day and closed near the high.

Spinning tops

These are small , black or white bodies. This pattern signifies a very tight trading range between the open and the close, and its considered somewhat neutral.

Doji lines

These ones show periods in which the opening and closing prices for the period are very close or exactly the same.

There you have it. These are the major things you need to know about candlestick charts. Overall, these charts help stock traders to predict emotions surrounding a stock hence helping them to make better predictions about where that stock might be headed.

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Day-Trading
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Day trading refers to the practice of buying and selling financial instruments such as stocks, bonds, currencies, futures, options, and commodities, during the day with the aim of making profit from the volatility on the market. Day traders may deal with thousands of shares in a single day, often with leverage, and seek small-percentage profits from their trades. A trader takes a specific position depending on their analysis of a stock’s probable price direction within the trading period.

day-trading-computers

In order to succeed in day trading, you are expected to be knowledgeable, disciplined, and patient to wait for the right trade.

There is a difference between day traders and investors in that day traders hold their securities for only one day. Day traders close out their positions at the end of the day and then start over again the next day. Conversely, swing traders hold their securities for a couple of days, sometimes it can be even months, while investors may hold their securities for several years.
Originally, day trading was done by financial companies only as they had access to the exchanges and market data. But with the swift advancement of technology, today individual traders can directly access to the same exchanges and market data, and can make the same trades at very low cost.

What are some of the benefits of day trading?

The major advantage of day trading is the potential to earn huge profits. There are many other benefits you can reap from day trading if you can effectively manage your emotions and cope with the inherent pressures.

Be your own boss

A day trader is simply self-employed, working by themselves and answerable to no one. Being professional day trader means you are a true entrepreneur living by your wits to reap the benefits of your own decisions.

Day-Trading

Expensive education is not a requirement in day trading

Unlike jobs in the corporate market, day trading doesn’t require an expensive education. Basically, there are no formal educational requirements for becoming a day trader.
Another good thing about day trading is that you can do it from anywhere provided you have access to a computer and a reliable internet connection.

Day trading requirements

Knowledge

Knowledge and experience in the marketplace is essential for one to succeed in the stock market. The latest stock market news and events that affect stocks will help you reap huge profits. Attempting to day trade without an understanding of the market fundamentals is a ticket to losing your money.

Sufficient Capital

A substantial amount of capital is required to capitalize effectively on intra-day price movements.

Infrastructure

A modern day trader must rely on a combination of computers, routers, internet connection, and specialized software in order to keep track of the market all day round. Besides, an active day trader needs to use an electronic communication network to avoid paying a commission to a broker for each trade.

Discipline

A profitable strategy may not yield good results if you are not disciplined. Many traders end up losing their hard earned money because they fail to stick to their trading plan. Therefore, you need to develop a set of strict rules that take the emotion out of a trade.

Day trading is very prevalent especially in this digital era. Day trading, both institutional and individual, play a vital role in the marketplace by keeping the markets efficient and liquid. Day trading takes time to master. With proper techniques and guidelines, one can make huge profit from day trading.

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What is a stock broker?

According to the Business Dictionary, a stock broker is a licensed individual or body with the following qualifications. He or she has passed a certain test and is certified to offer investment advice. He can counsel customers on if to hold or sell securities. He or she can execute the selling or buying of investment orders by his or her clients. He or she also charges a percentage of the transaction to cover his or her fee (Downes, J., & Goodman, J. 2014).looking-at-the-statistics-of-stock-exchange

Qualifications and Licensing of stock brokers

You can become a stock broker with as little as a high school diploma in a business related field. This is, however, a field where once qualification and past successes dictate one’s future. Bearing this in mind, having extra qualifications is an added advantage. These extra qualifications can come in form of, a bachelor’s degree. According to the Bureau of Labor Statistics, a bachelor’s degree is the least requirement for a career as an entry-level stock broker. The common stock broker degrees include economics, finance business, and accounting. For you to work in an investment firm or bank a bachelor’s degree is also mandatory (Bodie, Z. 2013). There is, however, no specific majoring needed but one in a business related field is recommended. Extra classes in statistics or mathematics can allow you to stand out among a pool of stock brokerage candidates.

Duties of a stock broker

Similar to other occupations stock brokers have duties and responsibilities. Among these duties include the duty of fair dealing. The security industry demands fair dealing from all of its employees. Fairness and honesty must be exercised in all the dealings with customers. There are even bodies like the Financial Industry Regulatory Authority (FINRA), put in place to ensure that these virtues are practiced. These bodies also ensure that these laws are legally enforceable.

broker-showing-some-ascending-to-his-colleague

Stock brokers are also expected to be loyal. Due to the fact that stock brokers earn their money through a commission, there is a chance of a conflict of interest to take place. Stock brokers can focus on their interests and increase their own income or focus on the customer’s needs and increase their interests. Duty and loyalty ensure that the needs of the customers are always put first.

As a stock broker, you are expected to disclose all the relevant information to an investment to your customers. For a customer to make a decision that is most profitable, he or she needs reliable information (Prentice, R. A. 2011). Stock brokers are expected to provide their customers with this information regardless of their other investments or possible personal loss. Brokers are also obligated to inform their customers of any risks that may affect their investments. No stock broker should perform any activity in the customer’s account without their approval. The only way a broker can do this is if the customer has given a broker power of attorney to make trading decisions.

Conclusion

In conclusion, a stock broker is anyone or anybody that is licensed to offer financial investment advice. To become a stock broker is possible with as little as a high school Diploma. Additional qualifications in a business related field are an added advantage. Among the duties of any stock, broker includes loyalty to their customer, fair dealing in their operations, a full disclosure of information to their clients and fair.

References
Bodie, Z. (2013). Investments. McGraw-Hill.
Prentice, R. A. (2011). Moral Equilibrium: Stock Brokers and the Limits of Disclosure. Wis. L. Rev., 1059.
Downes, J., & Goodman, J. (2014). Dictionary of finance and investment terms. Barron’s educational series.

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Support-and-Resistance-in-the-Stock-Market
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Support and resistance have long been vital trading indicators. With their roots in the supply and demand theory, these concepts represent key junctures where the forces of demand and supply meet.

Support and resistance are undoubtedly the most important attributes of technical analysis. Usually, they are used by traders to refer to price levels on charts which might act as barriers which control the movement of the price of a stock or a security. They are the levels from where the movement of this price tends to stop or reverse back. They represent the levels where quite a few traders might be willing to buy or sell the stock on various platforms.Support-and-Resistance-in-the-Stock-Market

What is support?

Support is defined as the price level at which demand is thought to be strong enough to prevent the stock price from falling any further. Whenever the price reaches the support level, it has difficulty going past that level. The logic dictates that as the price declines and approaches support, buyers become more inclined to buy a sellers become less willing to sell. By the time the price reaches the support level, demand will tend to overcome supply and stop the price from falling below support.

What is resistance?

Resistance is the opposite of support. It is the price level at which supply is strong enough to prevent the stock from increasing any further. The rationale is that as the price approaches resistance, sellers (supply) becomes more inclined to sell and buyers (demand) become less inclined to buy. By the time the price reaches the resistance level, the supply will overcome demand and prevent the price from rising above resistance.

Support and resistance levels are important points in time where the forces of supply and demand meet. These support and resistance levels are seen by technical analysts as crucial when determining market psychology, supply and demand. When these support or resistance levels are broken, the supply and demand forces that created these levels are assumed to have moved, in which case new levels of support and resistance will likely be established.Support-and-Resistance-in-the-Stock-Market

Some characteristics of support and resistance figures:

  • They help stock traders to arrive at entry or exit prices.
  • They are a useful aspect of trends as they help traders to make trading decisions and identify when the trend starts to reverse.
  • Round numbers are important in support and resistance levels. The increased selling and buying pressure at round numbers lends them psychological importance.

The importance of support and resistance

Support and resistance is a crucial part of trends as it can be used to make trading decisions and identify when a trend is reversing. Besides, these barriers form the basis of many successful trading strategies an almost all market stocks, bonds, forex, options, futures, commodities, and many more.

Moreover, support and resistance are determinant forces in the market. They represent price levels where traders can make financial decisions about profit and loss.

Identifying support and resistance

There are many indicators that have been developed to help identify these two barriers. However, using them effectively takes some practice and experience. Support and resistance can be easily identified with the help of moving averages. Besides, the Fibonacci retracement tool can be used to determine these levels.
Generally, support and resistance play an important role in technical analysis. Furthermore, they are key tools used by research firms, stock advisories, and broking firms which provide stock tips based on their technical analysis.

 

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