Candlestick chart: Doji Introduction

Doji is formed by Open and Close trading price virtually equal.
Upper and lower shadows length can be differ depending the buying and selling activities. This will result in candlestick forming cross, inverted cross or plus sign. If interpreted as only Doji pattern, it carries neutral pattern. However, by looking at the preceding price action future confirmation, doji may carries bullish or bearish bias information.

In ideal case, the open and close of trading should be equal. Doji suggest a sense of indecision between buyers and sellers. Presense of Upper and Lower shadow indicates price move above and below the opening level during trading session, but closes at or near opening level., resulting in standoff. This means that, neither buyer or seller were able to gain control, which means it could be a developing turning point.

Ideally, but not necessarily, the open and close should be equal. While a doji with an equal open and close would be considered more robust, it is more important to capture the essence of the candlestick. Doji convey a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level. The result is a standoff. Neither bulls nor bears were able to gain control and a turning point could be developing.

To determine robustness, it is suggested that comparison with previous candlestick body is necessary. A doji should have a small body that looks like a thin line in comparison to previous candlestick. A doji that forms among other candlesticks with small real bodies, would be considered insignificant. Conversely, a doji that forms among long real bodies candlesticks is considered significant.

The World's Richest Men 2008 (1-10)

The latest ranking of the world's richest men in 2008 saw Bill Gates dethroned from the top position after occupying the spot for more than 10 years in a row, thanks to an unsolicited bid for Yahoo! in the recent run.
His position now is taken over by his long time friend, Warren Buffett. Buffett's current position may not long last though, as he has promised to contribute a big chunk of his fortune to charity soon.
Four of the wealthiest people are Indian citizens, with two of them siblings. As among the world's strongest economy, the Japanese, Chinese and British do not have representative in the top 10. The ranking is as published by Forbes on February 2008.

1. Warren Buffett (US). $62 billion
For many years, Warren Buffett has been overshadowed by Bill Gates who finally dropped his place to third this year. Buffett is often noted with his uncanny ability and talent to identify company stocks that are deemed to soar in the market. Being the richest person does not change his frugal lifestyle as he still lives in the $30,000 house he bought in the 50s, which now worth merely about $700,000.

2. Carlos Slim Helu ( Mexico ). $60 billion
Carlos Slim Helu is a Mexican tycoon with business interest in telecommunication industry and sector, and is the man behind America Movil, the 5th largest mobile network company in the world, together with a few other mobile operators such as Telmex (Mexican Telecom) and Telnor (Northwest Telephones). Carlos belongs to a classic story of a poor immigrant moving from Lebanon at the age of 15, whose family made fortune in a foreign soil.

3. Bill Gates (US). $58 billion
Despite no longer the wealthiest person, Bill Gates, or William Henry Gates III, still retired a happy man this year, even though his passing over to successor Steve Balmer has been a day full of tears. The Microsoft he founded more than 30 years ago has long been benchmarked as the turning point of technology and life, and with this, he surely does not regret dropping out from Harvard University and getting the scolding from his parents, a lawyer and a businesswoman.

4. Lakshmi Mittal ( India ). $45 billion
Lakshmi Mittal was born and raised in India , but created most of his fortune from his London base. The company he inherits, ArcelorMittal, the world's largest steel company, accounts for about 10% of the world's steel production. Mittal is also the richest resident in Europe today. He is now living in Kensington Palace Gardens , the property he bought from Formula One honcho Bernie Ecclestone for about $130 million.

5. Mukesh Ambani ( India ). $43 billion
Receiving an MBA from prestigious Stanford University and being valued at $43 billion make Mukesh Ambani both rich and smart. Rumor has it that he never completed his Stanford studies but he would care little about it now. Mukesh now heads India 's most valuable company, Reliance Industries, founded by his late father, and is also a Fortune 500 company. He is also the first ever Indian citizen to have reached a trillion mark in terms of net worth (In Indian currency of course).

6. Anil Ambani ( India ). $42 billion
The younger brother of Mukesh. If Mukesh went to Stanford, Anil did not want to be overshadowed and pursued his MBA in Wharton Business school. And the rivalry does not seem to end as both of them are now battling each other in court over a business deal. It is true they say fortune can break a family apart. Anil made sudden entry to the top ten list in 2008 after almost doubling his wealth within a year period. Married to a Bollywood actress Tina Munim.

7. Ingvar Kamprad ( Sweden ). $31 billion
Ingvar Kamprad is most likely less popular than the company he founded, IKEA. Born dyslexic did not stop Kampard from bringing up one of the most successful companies in the world. He once admitted that the Swedish-sounding names of the IKEA furniture were chosen because of his difficulty remembering stock numbers. Interestingly enough, despite his wealth, Kamprad still keeps the habit of eating in cheap restaurants, flying economy class and avoiding himself from wearing the suit.

8. KP Singh ( India ). $30 billion
The property businessman was not anywhere in the top 10 list last year but the successful listing of his company, DLF Limited tripled his fortune and jumped him to 8th place this year. The company now is the largest estate developer in India . Singh graduated in engineering, before recruited by the Indian Army soon after his graduation, and later turned to corporate world. Now practically retired, the running of the company is left to his children..

9. Oleg Deripaska ( Russia ). $28 billion
If for the past few years it is always Roman Abramovich who always made headlines as both Chelsea owner and Russia 's richest man, it's now Oled Deripaska's turn. Oleg is the Chairman of RUSAL, the world's largest aluminium company, which employs a massive 100,000 people across a number of countries and continents. Like Roman, Oleg also has a home based in London , and as a matter of fact, was once rumored to have interest in taking over Chelsea 's great rival, Arsenal.

10. Karl Albrecht ( Germany ). $27 billion
With little formal education, the Germany 's richest man started a small grocery store with his mother and brother, Aldi, after the end of the World War II, which soon grew into a large discount supermarket. It did not stop there as the family opened up more and more supermarket and today the company can be proud with themselves with over 8,000 stores worldwide. Albrecht is a man very much elusive of publicity. His hobby? Raising orchards.

Defining Your Circle of Competence

Recently, i've been reading up books on investment and i would like to particularly highlight a topic which i came across from book: The Winning Investment Habits of Warren Buffett & George Soros. I will not highlight content of the book, though, as some of the topics takes more than my knowledge to apprehend. In future, i hope to share the points that i picked up from it to all.

However, there is one particular topic inside the book which i truely agree with and hope to share.

Topic: Defining Your Circle of Competence
- Master Investor is uninterested in investment he don't understand because he knows his own limitations.
- This makes MI always define his circle of competence.
- MI makes money easily when he stay within that circle of competence.
- He is not inerested investing in something that is outside that circle although grass may be greener somewhere outside his circle.

To MI, his investment style is a fit to his personality. Doing something else is equivalent to wearing a suit that doesn't fit. An Armani suit that's too big or too small is worse that a cheap suit that's exact you size.

To Buffett and Soros, they built their circle of competence by answering 3 questions:-
1. What am i interested in?
2. What do i know now?
3. What do i like to know about, and be willing to learn?

Another important point that the author (Mark Tier), highlights is to consider whether if it's possible to make money in an area that interest you? One example of industry which he highlighted is the airline industry, which always fascinated him. However, he mention that airline industry is an investment blackhole requiring enless amount of capital which usually ends up going to pilots' union.

Conclusion:-
By answering the questions above, only then will you be able to zoom into your own investment niche and be very clear about your own limitations. This will also help you stay away from so called "investment opportunities" that fail to meet your criteria.

In other words, for a beginner investor like myself, it is important to find my own investment niche, in the field that i truly have interest in. From there, i will have to gather as much information as possible (A - Z ) about that industry, so that when i start investing in that particular investment niche, i know what is going on within that circle of competence. I know when is the right time to start buying and most importantly, when to sell it and make profit from it. In my opinion, this is one method that beginner or even advance investor should adopt to reduce risk of investment.

"if you dont understand it, don't do it," - Warren Buffett

Candlestick chart: Spinning Tops

Spinning Tops

Another type of candlestick chart, known as spinning top possess both long upper and long lower shadow. Spinning tops characteristics:-
- The short body shows small movement from open to close.
- Long shadows on the upper and lower side indicates buyer and seller were active during the trading session.
- The open and close maybe short (small), however, price move significantly higher and lower during the trading session.

Spinning tops indicates indecision trading. Neither party managed to dominate buying or selling actions, thus resulting in Standoff.

Indication:-
After Long Hollow (White) candlestick, a spinning top signify weakness among uptrend and a potential reverse or interruption in trend.
Conversely, after Long (Filled) candlestick, a spinning top signify weakness among downtrend and a potential reverse or interruption in trend.

News: Asian stock may soar 43% this year

Candlestick chart: Short and Long Shadow

Short vs Long Bodies

The shadow both on the upper and lower side of bodies indicates important information on the trading the session. Upper shadow shows session high while lower shadow indicates session low. Short shadow candlestick indicates that trading action is limited near to Open and Close. Long shadow candlestick means that trading action advance well past open and close. Long Upper Shadow and Short Lower Shadow :-
Buyer controlled the trading session, and bid prices higher. Later on, sellers forced the price down and this is followed by a weak close, thus forming long upper shadow.

Long Lower shadow and Short Upper shadow:-
Seller controlled the trading session, and push the price lower. Later on, buyer force the price up and this is followed by strong close, thus forming long lower shadow.

Candlestick chart: Marubozu

Diagram above indicates both black and white bodies without upper and lower shadow. This is known as Marubozu, and its characteristics:-

- The high and low are represented by open and close, in this case.
- White Marubozu, is represented by Open equals to Low and Close equals to High. This means that buyer control the price action from the start of trading to the last trade.
- Black Marubozu, is represented by Open equals to High and Close equals to Low. This means the seller control the price action from start of trading to the last trade.