Pricing for Profit

Appropriate pricing will not only increase sales but also increase profits by increasing sales. In practice, there are companies that set prices with the market-oriented to be able to compete effectively, and thus market share. It was only later raise prices to earn a decent profit. Of course with the support of advertising and other promotions either above the line and below the line. Parties are required to be able to produce production-related products with the lowest possible cost.

Sometimes we realize it or not, quality is sacrificed, which can be fatal. In other parts there are companies-oriented only on cost, and prices are set by the mark-up to accommodate the desired profit. Usually one-time price set will be difficult to change any time soon because the current release of products are intimately associated with the first impression in the minds of consumers. Meanwhile, the price of the company’s goal is to get two of them; both unit sales and profits, but with the wrong pricing can actually result in loss of both.

Pricing associated with short-medium term goals or long term. Then courage in taking management decisions determine the selling price is also very involved, things are not rational and logical, but use the gut, feeling, and instinct. There are four approaches to pricing:

1. Lowest cost / lowest price: low production costs pushed to set a selling price of a cheap usually aim to capture market share in a short time,

2. Supply and demand management: demand or high usage, provides an opportunity to set a higher selling price.

3. Supplier-customer balance of power: each supplier requested a contribution to reduce the cost of production so as to provide higher gross profits to be used in competition in the market,

4. Open-book pricing and partnerships: between companies and suppliers have openness in which agreement was reached for a particular product raw materials suppliers lowered prices for other raw materials to raise prices as a whole to achieve the expected level of profit.

While other factors are also looked at external factors beyond the products and prices as well as support for marketing, promotion, technology, innovation, and it usually encourages management to set the selling price, especially when the product was first launched.

Investors are also still get the momentum to hunt for gold due to the crisis in Ireland, although the EU and the IMF had agreed to help the country.

He began trading Tuesday (23/11/2010), the gold price had traded lower as selling pressure in connection with the expiration of the option at a price of U.S. $ 1,370 per ounce.

But then the price of gold surged as brokers saw the emergence of risk due to the crisis in Ireland which is feared could spread to other countries as well as overheating in the North Korean conflict and South Korea. The players aim to predict the target price of $ 1,400 per ounce.

In trading Tuesday (23/11/2010), price of gold futures rose by 1.5% to U.S. $ 1,377.60, with trading volumes higher than average. Meanwhile, gold prices in the spot market increased 0.7% to a level of U.S. $ 1.375 per ounce.

Broker of European banks reported big yag options trading at a price of U.S. $ 1,370 per ounce, which indicate many selling at these levels. The brokerage said the selling pressure after the option expires.

Silver prices also jumped to 1.2% to U.S. $ 27.48 per ounce due to the unusual futures trading that was active. The volume of trading in COMEX silver futures reached 135,000, which is a daily record of the most active.

Throughout the year, silver prices have jumped to record 64%, while gold jumped to 26%. With the surge that is not balanced, then the ratio of gold to silver is now less than 50%, which is the lowest since March 2008.

1. Trade in Pairs, Not with Currencies – It is similar to any relationship in day to day world. You need to know both the sides. Success or failure in this currency market depends on knowledge of both the currencies, not only one.

2. Fx trading secrets: If one is keen to make profits from forex market then they should know the basics of the forex market. Most of the time forex market is influenced by the global news and events. One should know exactly which the authentic news is and which rumors are so accordingly they can take decisions.

3. Avoid “Short Term” Trading – Often, a new trader will find themselves placing tight orders in order to reap a relatively small profit margin. However, “short term” moves can have a drastic effect on your long term success as it is often dificult to bridge the gap between bid and asking price. Make sure you understand the full value of any move before you make it.

4. Fail to Plan, Plan to Fail! (Strategies) – A well defined strategy is one of the greatest “secrets” of the forex trading market. There are hundreds of profit making strategies to choose from. While most traders prefer a fundamental trade analysys, take the time to research a few and find one that you feel most comfortable with.

5. Know Your Emotions – Everyone has a bad day at the office. However, undertaking a forex trade with anything other than a level head can be extremely costly. If you find yourself unable to focus or becoming to emotionally attached to your trading, consider taking the day off.

6. Stats Are Your Friend! (Technical Analysis) – Technical analyses can provide vital clues on when to buy and sell your trades. Is it a long or short market? Is the market over extended? All of this can be discovered via a well-prepared technical analysis.

7. Believe in Yourself! (Confidence) – Forex trading is not a “get rich quick” scheme. It takes studying, planning, and most importantly, confidence. When your software says you are up, but your bank account says otherwise, its easy to get discouraged. Make sure to study the basics and master your skills before entering the market. A steady approach can take all of the magic out of “forex trading”, steel your confidence, and earn your the profits you desire!

Lets start with my definition of what I consider is technical analysis of financial price data. Technical analysis is using graphical charts to identify buy and sell patterns every possible way. With statistics proving that using these patterns gives a better chance for successfully trading the stock market. Let’s have a look at what kind of information we are looking for on the chart.

A first basic pattern is the breaking of a trend line and is a very powerful indication that the trend is reversing. A closing price breaking a downtrend line is generally a confirmation that the last turning point is a trend reversal.

A second basic pattern for making buying or selling decisions is the breaking of a horizontal resistance level, or a price turning at the level of a horizontal support line found at price turning points.

A third possibility is making use of more complex reversal and continuation price patterns like a head and shoulders reversal pattern, a triangle, rectangle or diamond continuation pattern, and so on.

A fourth possibility is using the Eastern candlestick chart instead of the normal Western bar chart. Candlesticks show a number of bottom and top reversal patterns and some continuation patterns that can be used successfully for entering or exiting a trade. These patterns have exotic names like bullish and bearish engulfing patterns, doji, harami, hanging man, evening and morning star and much more.

A fifth possibility is counting Elliott impulse and correction waves. Ideally you can enter an up move just after the start of a medium to longer term impulse wave 3, generally after an ABC correction wave for the creation of correction wave 2. Most of the time a 3-wave has an extension with another impulse wave of a lower degree.

A sixth possibility is using oscillators and indicators looking at overbought and oversold areas and specifically at normal and hidden price/indicator divergences announcing trend reversals or previous trend continuations.

Can you imagine the decision making power you have for buying or selling a stock combining all of these techniques? Most reversals in price are announced by more of the previous mentioned techniques. But there is more than just the technical analysis.

Before we can answer the question, “is trading based on technical analysis profitable?” we have beside the use of technical analysis to define entry and exit points, the need for good money and risk management. First let’s talk about money management. Personally I prefer the method that has proven to be the most profitable with the best results in every test I made. That is using a limited fixed number of stocks where every stock gets an equal part of the capital at the start, but there is no profit or loss sharing between the stocks. It has also the big advantage that it is so much more easy to follow-up just a small number of stocks with detailed technical analysis.

Risk management makes sure that the risk-to-reward ratio is in favor of the reward. Opening a trade you must limit the risk and make sure that the first reward target is better than the risk. Future price projection techniques will give you an estimate as to where price can go. Once an open position, you must also use a trailing stop method to make sure you keep the profit and that you will close the trade if standard technical analysis fails. Future price estimates can be made using Fibonacci projections crossing pitchfork channels and a number of other techniques.

It should be clear by now that the pure technical analyst does not look for fundamental data about the stock he is trading. You could basically leave out the name and even the time period from the chart and the technical trader will still be able to do the job. Because price data moves in a fractal way you can basically trade with the same rules in any time frame, from bar charts using minutes, hours, days or weeks.

So, the big question again, is trading based on technical analysis techniques profitable? YES it is! The easiest way for me to prove this is using an automatic trading system based on technical analysis to buy and sell. The SATS2 auto-trading-system I am using is now about 2 years old, does not use any optimizing and is still giving good results over the last 7 months before today’s date of October 27, 2009. Since the start of the test period on March 13, 2009 and closing on October 23, 2009, or about 7 months, it generates a profit of 156% using my own 38 US stocks selection that I am following-up closely.

Since this is an automated system, it has its limitations and is certainly not as intelligent as you can be, looking at the chart yourself. It is clear that making manual buy and sell decisions should still give an even much better result. But I just wanted to make my point here that trading based on technical analysis is profitable.

In this article I tried to answer the question of what is technical analysis and is trading based on technical analysis profitable. I hope I have convinced you that yes it can be very profitable