Lita Epstein

The authoritative standards and rules that govern financial accounting and reporting by businesses in the United States are called generally accepted accounting principles (GAAP). When you read the financial statements of a business, you’re entitled to assume that the business has fully complied with GAAP in reporting its cash flows, profit-making activities, and financial condition — unless the business makes very clear that it prepared its financial statements by using some other basis of accounting or deviated from GAAP in one or more significant respects.

External financial statements, including the income statement (also called the profit report) comply with well-established rules and conventions. By contrast, the format and content of internal accounting reports to managers are wide open. If you could sneak a peek at the internal financial reports of several businesses, you’d be probably surprised by the diversity among the businesses.

Area charts are just another way of displaying a line chart for stocks. They are commonly used on TV to help the viewer distinguish the price line more clearly. Area charts also offer a unique style that is different from a daily chart with candlesticks. One of the nice parts about charting is creating attractive, colorful charts that you enjoy looking at to review.

Selling stocks for a loss is part of technical trading. Obviously, the preference is to sell stocks when they’re winners. The worst trades are the ones that immediately reverse when you enter into them and take you to a loss position. Taking small losses rather than large losses is akin to paper cuts versus amputations.

Managing your trades is a constant job for a good trader. You can use technical clues to help you make optimal trading decisions. After a stock has drifted sideways to down, a few key technical events happen: The stock touches an important moving average. Some of those are the 10-week moving average, 20-week moving average, and 40-week moving average.

After you’ve determined your portfolio’s goals, you can set up personal scans and alerts to help you monitor your portfolio hourly, daily, or less frequently; the frequency depends on your goals. If you’re actively trading each day or week, you’ll check this information much more frequently than if you’re managing a longer-term portfolio.