Author: Janice Wilson

**Author Bio:**Janice Wilson is a financial expert who enjoys trying to find the best ways to use technology to help her financial life. When she is not trading stocks online, she spends her time trying to find lower car insurance rates online.Over the past several years, a revolution has been taking place in online stock trading. With the continued advancement of computing power and internet speed, high-frequency and algorithmic trading have become very popular methods by which to profit from online trading. Although high-frequency and algorithmic trading are not precisely the same thing, they are generally thought of as two sides of the same coin. High-frequency trading describes the use of computers to make split-second trading decision, often employing strategies that require a position for only minutes or even seconds. Alternatively, algorithmic trading employs the use of sophisticated programming models to profit from market inefficiencies. Both institutions and individual traders have embraced such trading strategies to such an extent that high-frequency trading is now believed to account for three-quarters of all stock trades on the various exchanges. As such, it is very difficult to develop a profitable trading method without the use of high-powered computers with sophisticated programs. Of course, a computer is only a tool; in order to profit from online trading, a trader must develop a strategy in order to exploit profitable opportunities that exist in the market. There are many such possibilities of such strategies. However, two of the most popular strategies are the following:

## Technical Analysis

Technical analysis is a term used to describe a range of trading strategies designed to analyze price movements in an attempt to speculate on future price movements. This is the antithesis of fundamental analysis, which is used to analyze financial statements in order to determine the intrinsic value of a company, often with the use of a discounted cash flow analysis. The most basic of all tools used by technical analysts is the moving average, which is simply the average historical price of some asset over some period of time. A moving average can be constructed for almost any period of time; the choice is often dependent on the time frame of the investor using them. Longer-term investors may use a three-month moving average while high-frequency investors may look at a 15-minute moving average. Moving averages are typically analyzed on graphs in real-time, giving investors a continuous stream of data concerning the pricing action of some asset. Typically, a stock moving above its moving average is considering a bullish sign, indicating positive momentum in the stock. Conversely, a stock moving below its moving average is considered a bearish sign, indicating a sell-off may be occurring. Of course, there are many more technical indicators one could possibly employ in order to profit for particular price movements. Some investors look at relative strength indicators, designed to measure both the size and volume of different price movements. At its most basic, these traders consider upward price movements to be more impressive when they are associated with strong underlying volume. Alternatively, a price increase with light volume may indicate a sucker's rally that will soon stall. It would be impossible to describe all the possible strategies employed by stock technicians in anything less than a reference book:- Cup and Handle Patterns
- Head and Shoulder Patterns
- Support and Resistance Levels