Basics of Trading

A Trader or an Investor

What is the difference between an investor and a trader? Some argue that an investment is merely a longer-term trade. Others argue that the difference lies in the intent of whether you purchased the stock primarily for the dividends paid by the company,...

Bar, Line, and Candlestick Charts

Types of ChartsAlthough there are many different types of charts which stock, traders of the stock, futures and forex markets use, the most common, which we will review below, are the line chart, the bar chart, and the candle stick chart.Line...

Bid–ask spread

In most financial markets there are always two prices for a particular financial instrument at any one time which are known as the bid and the ask price. The bid price is the price at which the market maker (the actual entity that is on the other side...

Business Cycle and Fiscal Policy

Fiscal policy can be defined for our purposes very simply as anything relating to government spending and taxation. Before looking at the fiscal policy role of government in trying to influence the economy, one must first have an understanding of the...

Candlestick

I do not trade individual candles/bars. I trade a series, or array, to the general direction of price over time. The single candle or bar doesn't matter at all. While it is true there are instances of pin bars/candles that hold, and perhaps doji's are...

An Introduction to Trading Candlestick

Candlestick charts display the open, high, low, and close of an instrument and shade the "candle" portion white if the close of the period is greater than the open of the period, and black if the close for the period is less than the open. The high and...

Bullish and Bearish Engulfing

The Bullish Engulfing PatternThe Bullish Engulfing pattern is another candlestick formation which represents a potential reversal in the market when seen in a downtrend. The pattern is made up of a white and black candle where the latest candle (the...

Candlestick - Inverted Hammer

As its name implies, the inverted Hammer looks like an upside down version of the Hammer Candlestick Chart Pattern which we learned about several lessons ago. Like the Hammer Pattern, the Inverted Hammer is comprised of one candle and when found in...

Hammer and Hanging Man

Hammer and Hanging Man Candelstick PatternsLike the Spinning Top and Doji which we have studied in previous lessons where we learn to trade chart patterns, the Hammer candlestick pattern is made up of one candle. The candle looks like a hammer...

Morning and Evening Star Candlestick Chart Patterns

The Morning Star Candlestick Pattern is made up of 3 candles normally a long black candle, followed by a short white or black candle, which is then followed by a long white candle. In order to have a valid Morning Start formation most traders will...

Shooting Star Candlestick Pattern

The Shooting Star looks exactly the same as the Inverted Hammer, but instead of being found in a downtrend it is found in an uptrend and thus has different implications. Like the Inverted Hammer it is made up of a candle with a small lower body, little...

Spinning Top and Doji

The Spinning TopWhen a candlestick with a short body in the middle of two long wicks forms in the market this is indicative of a situation where neither the buyers nor the sellers have won for that time period as the market has closed relatively...

Double Top and Double Bottom Chart Pattern

Double Tops:A double top is a reversal chart pattern which is defined by a chart where a financial instrument makes a run up to a particular level, then drops back from that level, then makes a second run at that level, and then finally drops back...

Flag and Pennant

Typically seen after a big move in one direction in a particular financial instrument, flags and pennants represent brief consolidations or pauses in the market before a resumption of the trend in which they occurred. The flag and pennant patterns both...

Harmonic Patterns

Harmonic Trading is a method that uses specific price patterns and the alignment of Fibonacci ratios to determine highly probable reversal points (pull backs and or retracements) in the financial markets.This style of trading and it's traders believe...

One Day reversal

One Day reversal is the starting point for most reversal patterns. After an extended rally the stock gaps higher at the open to trade at a new high on a positive news announcement. As the session proceeds volume expands significantly but by the close th...

The Head and Shoulders Pattern

A Head and Shoulders pattern is defined by one peak, followed by a higher peak, which is then followed by a lower peak, and finally a break below the support level established by the two troughs formed by the pattern.As you can see from the above...

Triangle Chart Patterns

Triangle Patterns can be broken down into three categories: The ascending triangle, the descending triangle, and the symmetrical triangle. While the shape of the triangle is significant of more importance is the direction that the market moves when it...

Charting Tools

When talking about technical analysis charting with such indicators a MACD and Bollinger Bands. While every investor should know the theory and use of technical indicators for "after market" analysis, often, the beginning trader is led to believe that...

Climactic Action

The Law of Supply and DemandThis law states that when demand is greater than supply, prices will rise, and when supply is greater than demand, prices will fall. Here the analyst studies the relationship between supply vs. demand using price and...

Commodity Channel Index (CCI)

The Commodity Channel Index (CCI) is an oscillator originally introduced by Donald Lambert in an article published in the October 1980 issue of Commodities magazine (now known as Futures magazine).Since its introduction, the indicator has grown in...

Consumer Confidence Index

The consumer confidence index measures public sentiment on the economy, jobs, and income. Economists look at consumer confidence to gauge future spending in the economy. If confidence is up, people feel safer and more secure with the economy, and therefore...

Day Trading

The definition of a day trader is a trader who typically completes both the purchase and the sale of a financial instrument within a single trading day. One of the biggest advantages is that since the trade is closed out before the end of the trading...

NASDAQ Level 2

Many beginners ask us to recommend a Level 2 service so that they can start getting in on the inside of the market immediately. Unfortunately, they are asking us how to run like the wind and they don't even know how to walk yet. Please be patient. Learn...

Dow Theory

Most consider the father of technical analysis to be Charles Dow, the founder of Dow Jones and Company which publishes the Wall Street Journal. Around 1900 he wrote a series of papers which looked at the way prices of the Dow Jones Industrial Average...

Dual Moving Average Crossover (DMAC) Trading Strategy

FINANCE 453, GLOBAL ASSET ALLOCATIONCaptain Carnage Asset ManagementDual Moving Average Crossover (DMAC) Trading StrategyMerrill Liechty Lance Stover Murray SpenceTABLE OF CONTENTSPart 1: Dual Moving Average CrossoverPart 2: ...

ECN

ECN stands for Electronic Communications Network, which is basically a computerized system that allows traders to bypass the major stock exchanges , and trade directly with one another. While ECN's are a relatively new phenomenon for the individual...

Fundamentals for Traders

In The Original Turtle Trading Rules, Curtis Faith described their method for adjusting their position size. The Turtles used a normalizing algorithm based on the dollar volitility of the market. This comes from an in-depth understanding of the market...

Get a Demo Account

A demo account is a practice trading account funded with fake money. It operates almost identically to a real trading account; it shows live rates, and the software used to on demo accounts is the same exact software real traders use. The most significant...

Gross Domestic Product

The Gross Domestic Product, or GDP, is the total market value of all goods and services produced in a country within a year, including production of any foreign-owned companies operating inside that country. So, what they do is they take all the goods,...

How an Order is Executed on the New York Stock Exchange

The starting place when buying or selling a stock is the brokerage firm. Before the internet, brokers were what are known today as "full service brokers", which basically means that you get to call and speak to a registered broker when placing your trade....

How Options are Priced

We take our first look at how options are priced.The pricing of options is based on the probabilty of outcome. In other words- the odds. Because one can be an option buyer or an option seller, also called an option writer, options are necessariliy...

How to Buy Stocks?

Generally, traders will trade in 100 share increments when trading stocks which is referred to as a "round lot". It is possible to trade less than 100 shares (referred to as an odd lot) or more than 100 shares that are not in increments of 100, which...

Identifying Breakouts

By Peter Lim Platinum Quality AuthorIf you need help in identifying when a stock has already break out of a trading range and is ready for a rally or move into uptrend, here is a simplified guide.Call up the chart of the stock you are interested...

identifying Trending markets

Trending markets are by far the easiest to trade and thus the most profitable. Also, I really think all beginners need to learn how to trade with the dominant daily trend before they attempt to trade range-bound markets or counter-trend. So, knowing how...

Inflation

Inflation is defined as an overall increase in the price level. Or, in other words, an overall decrease in the purchasing power of the dollar. When inflation occurs, currency buys fewer goods and services.The most effective tool used to gauge the...

Initial and Maintenance Margin

a look at some of the rules surrounding trading on margin.Because the stock market is an exchange traded market, many of the rules and regulations surrounding trading on margin are standardized. This is in contrast to the spot forex market where...

Learning Technical Analysis

There are two basic methods that traders use in determining when to enter the market when trading the stock, forex, and futures markets, which are:Fundamental analysis which seeks to determine the value of a financial instrument by analyzing all...

Market Cycles

The simple idea behind market cycles is that markets move in predictable cycles; certain assets go up, then they come down, then they go back up again, etc. There are two common reasons offered for why this may be the case:1. People’s desires and p...

MARKET IMPACT

MARKET IMPAC TBondsTraders get quite agitated when there’s a strong jobs report, especially if it’s unexpected. The news can portend accelerating inflation and rising interest rates, both of which are anathema to bondholders. Thus, be prepared for...

Market Profile

"Market Profile" is a 'view' of the market which was originally developed by J. Peter Steidlmayer in the 1980s. He developed the system whilst working for the Chicago Board of Trade (CBOT).It is also closely linked with Auction Theory.I think...

Market Wizards Study Notes

Market Wizards Interviews with Top Traders Jack D. Schwager....................................................................... 2 Michael Marcus: Blighting Never Strikes Twice........................................................... 2 Bruce...

Multiple Time Frame Analysis

It is important always to have a big picture overview of what is happening in the market. Although there are exceptions, in general most traders will tell you that if your trade setup or analysis lines up on multiple time frames, then the odds of being...

Penny Stocks

Penny Stocks Are Perfect for Manipulation About OTC:BB http://www.otcbb.com/ The OTC Bulletin Board (OTC:BB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity...

Position Trading

Position Trading, which is also referred to as trend trading, generally involves holding a position for three to six months or longer to capture a fundamental change in the value of the financial instrument that is being traded. As this is the case position...

Practice With a Demo Account

Trading doesn't just require knowledge, it requires practice. While a demo account or day trading simulator can't mimic the psychological pressures of having real money on the line, it's still a valuable tool for honing strategies, developing trading...

Basic Set-ups and Stop Placement

Most price action traders place buy or sell stop orders with a pre-determined stop loss level, and a take profit or target level. The buy or sell stop sets the level that price much reach for the order to be filled; the stop loss level sets the margin...

Candlestick Indicators in Price Action Trading

The basics of reading candles and charts: Since candlestick and bar charts are the fundamental interface of the price action trader, the most basic unit is the candle or bar itself. Candles sum up the price action over a set period of time: on a 5...

confluence

Price is a representation of mass psychology. This is because markets are moved by the activities of people. The psychology of human beings, deeply conditioned in the process of long evolution has not changed very much. It has some patterns and they are...

Introduction to Action Trading

What is Price Action?Okay, to begin with, what is price action? Price action is a particular methodology employed by traders, based on the observation and interpretation of price action, usually through the use of candlestick or bar charts. The price...

Terms and Tips

Basic Terms for Price Behavior:Trend: 2 successively higher tops and bottoms (uptrend) / 2 successively lower tops and bottoms (downtrend) Other names for a positive trend: run up/bull run/rally Other names for a negative trend: run down/bear...

The Wyckoff Wave

Common sense ain't so common.There are myriad opportunities on the lesser time frames and Wyckoff can certainly help with that trading style. But to get to the fullest potential offered by the Wyckoff Method, it takes time for analysis and a lot...

Trading Naked

For those of you who wonder how it is possible to trade without indicators, The basic idea is that a market is governed by buyers and sellers. If you can understand how buyers and sellers operate you can tell where the market is likely to turn. I basically...

Trend Strength

Since we know that "the trend is your friend" we want to ask: how strong should a trend be for one to trade it? This is asuming that we can already identify the trend. So we want to determine how strong the trend is so how do we determine trend strength?I...

Wyckoff's Course

First let me state that I am wondering about Mr. Tom Williams and his book which is commonly referred to as VSA. It appears, as I read more and more of Wyckoff, that Mr. Williams contributed less and less to his own book and methodology. Those who have...

Rules and Regulations for Traders

the basics Rules and Regulations every trader should be aware of before starting their trading business.The first is the Pattern Daytrader Rule (PDR). In summary it says: "An NASD & SEC rule that applies to anyone who buys and sells a particular...

Sentiment

This Sentiment Section has been all about: discovering the background influences which cause a directional bias in the markets. That is, sentiment isn't so much about day-to-day activities, but about the direction and strength behind trends.The more...

sluggish summer trading volume for stocks

Since many people taking summer vacation, the stock market tends to have less activity. This means not much of the demand. Stocks go up when demand is higher than supply.'Sell In May And Go Away': historically stocks are underperformed in May and...

Sentiment - Market Indicators

The basics are that the market rises and falls on expectations. Technical analysis requires investors to identify a trend, position with that trend, and then exit the trade when the trend shows signs of reversing. While many of the technical patterns...

Shorting

Short is for the investor who believes a particular share price will fall, or that an over-priced stock will be brought back to value.Accordingly, an investor can “borrow” the stock from brokers before selling it in the market. The intention is to ...

Stock Exchange Features

Unlike over the counter forex market, most stocks are traded on an exchange. While this may not seem like information that is relevant to the individual trader, an understanding of the role an exchange plays in the market is essential to understanding...

Stock Selection Guide

Researching companies requires many hours of concentrated effort. It can't be done in a few minutes.  Sure you can get a quick glimpse of a company's past performance by looking at it's chart however, if you're intending to invest money into a ...

supply and demand

When the market moves up and then pulls back, the highest point reached before it pulls back is now resistance.As the market continues up again, the lowest point reached before it climbs back is now support.One thing to remember is that horizontal...

Support and Resistance

The first and most important thing to learn about technical analysis is support and resistance lines. Support and resistance lines are lines drawn on a stock’s chart that shows you price points where the stock is likely to reverse. Knowing the fine d...

Swing Trading

Swing trading is generally defined as a style of trading where positions are held for larger gains over multiple days and up to several weeks. Traders who promote this style of trading normally feel that it combines the best of both day trading and position...

Average Directional Index ADX

Average directional Index (ADX), an indicator which helps traders determine when the market is trending, how strong or weak a trend is, and when a trend may be about to start or reverse.Average Directional Index (ADX) do need to know that:...

Average True Range (ATR)

Average True Range (ATR) is a technical analysis indicator developed by J. Welles Wilder, based on trading ranges smoothed by an N-day exponential moving average.The range of a day's trading is simply high − low. The true range extends it to yesterday's c...

Elliot Wave

The Elliott Wave Principle is a form of technical analysis that attempts to forecast trends in the financial markets and other collective activities. It is named after Ralph Nelson Elliott (1871–1948), an accountant who developed the concept in the 1...

Moving Averages

Chart overlays that show the 'average' value over time. Both Simple Moving Averages (SMAs) and Exponential Moving Averages (EMAs). There are several different types of moving averages, which we are going to explore here, all of which are used by traders ...

Parabolic SAR

The Parabolic SAR is an indicator that, like Bollinger Bands is plotted on price, the general idea of which is to buy into up trends when the indicator is below price, and sell into down trends when the indicator is above price. Once traders are in positions...

Stochastic

there are 3 different types of stochastic oscillators: the fast, slow, and full stochastic. All of them operate in a similar manner however when most traders refer to trading using the stochastic indicator they are referring to the slow stochastic which...

Technical Analysis

Technical analysis is a method of forecasting  (a prediction or estimate of future) price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather ...

Williams %R

Williams %R, sometimes referred to as the Williams Percent Range, is a momentum indicator that measures overbought and oversold levels, comparable to a stochastic oscillator. The Williams %R is used to establish entry and exit points in the market.The...

The Basic Principles of Trading

The following is a Commentary found on the Net. The author is unknown at this time however its points are very helpful. It illustrates basic strategy for designing your trading style. On the fundamental side: - it is not too hard to make any stock...

The Four Major Economic Theories Found in the Forex Market

By Justin Stewart When you are studying the currency exchange market, you usually come across a variety of economic theories and methods involved in the Forex market. It is extremely important that the "rookie" investor/trader understand the theories...

The Pattern Day Trader Rule

because so many people lost money daytrading equities during the bubble, the regulators decided that the days of letting anyone who wanted to daytrade the stock market to be able to without restriction were over. The SEC issued regulations which are referred...

The Pitfalls of Market Orders

Have you ever noticed the advertisements from the discount on-line Brokers that say $3.00 or $5.00 per trade? Right! We’ve all seen them and wondered how they can do it. Well, there’s two reasons for this: 1) They sell their order flow to Market Makers or ...

Trading Call Options

We will look at buying a call option for speculation. For this example, I am using SLV, the silver etf. At the time of making this, SLV is $19.42 a share. Let's say that a trader is bullish on silver short term, so he wants to trade 1000 shares of SLV....

Trading Costs and Commissions

When trading more often some strategies like scalping and arbitrage might require more sophisticated, and expensive, trading systems and software. Many day traders use multiple monitors or even multiple computers to execute their orders. Then robotic...

Understanding The Markets

By now, you should have read several books on trading. They describe the Trading Markets and the process of stock exchange between traders. Now, you need to familiarize yourself with the different trading Markets around the world. As a newcomer to the...

Unemployment

Unemployment is defined as people who are willing and able to work, but do not currently have a job. To be counted as employed, a person must be working, even if only part-time, or be absent from work due to illness, vacation, or a labor dispute. Because...

What is a Limit Order?

Unlike a market order, which is sent to be executed at the best price available in the market at the time the order is placed, a limit order is sent to be executed at a specific price or better. The advantage of a limit order, is that you have price certainty,...

What is a Market Order?

A market order is an order that is sent to be executed at the current market price, regardless of what that price is when your order is executed. The advantage of using a market order is you are pretty much guaranteed to be filled on your order, regardless...

What is a Stock?

In order to understand what a stock is, it is first important to understand why a company would issue stock in the first place.As an example, let's say that you own a coin laundry company, and over the last several years you have built your company...

What is a Stop Order?

A stop order is an order placed to sell a stock below the current market price or to buy a stock above the current market price. Once the market hits your stop price, your platform will activate the stop order which will be sent to the exchange as...

What Is The Trend ?

Before we get started, we have to determine what a trend is before we can trade it. A trend, to a trader, is based largely on the timeframe they are trading. As you have learned, the 2 most important timeframes, as far as I’m concerned, is the timeframe y...

Wyckoff's Three Laws

The mechanics of the markets are so complicated that one must break it down into some foundational guidelines that encompass the whole, then build upon that foundation slowly and methodically until it makes sense and becomes a high probability, low risk...

DISCLAIMER

The content on this website is for informational and educational purposes only and is not and should not be construed as professional financial, investment, tax, or legal advice. Trading has large potential rewards but also large potential risk . Do not...

Forex

There are many interesting things that can be pointed out about the foreign exchange market, however there are a few major things that really separate this market from the equities and futures markets.24 Hour Liquidity Probably the biggest...

Advantages of Forex

No commissions No clearing fees, no exchange fees, no government fees, no brokerage fees. Most retail brokers are compensated for their services through something called the “bid-ask spread". No middlemen Spot currency trading eliminates the m...

Central Banks

While the 10 largest banks which make up the forex Interbank market account for over 75% of the daily trading volume, there is actually a level of participants with even more clout in the market. While generally nowhere near as active as the banks just...

Etoro Review

PositivesTraders generally do post comments fairly regularly and you can ask questions in a twitter style format.You can Obviously check on their statistics and what they trade in what quantities, their risk/leveraging tendencies etc, and try...

EURO

EU- European Union EMU- Euro Monetary Union ECB- European Central Bank EU has 15 member countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK All use the EURO as...

Evaluating Customer Service

the retail forex market is a relatively new market, which means that many traders who have experience trading other markets do not have much experience with forex. When you add to this the fact that much of the market has yet to be standardized, you can...

Exchange Traded and Over the Counter Markets

we are going to look at Exchange Traded vs. Over the Counter Markets and how the fact that currencies trade over the counter affects us as traders.When trading stocks or futures you normally do so via a centralized exchange such as the New York Stock...

Forex - The Structure

we are going to look at the structure of the forex market so we can learn who exactly controls the market and how the forex broker and individual trader fit into this picture.The forex market is an over the counter market meaning that there is no...

forex 3 Major Trading sessions

we are going to look at the major sessions  where foreign exchange is traded and the characteristics of each of the 8 hour trading sessions that make up the 24 hour trading day.Unlike the futures and equities markets, the forex market trades actively ...

Forex Market Analysis Methods

Traders analyze any financial market including the forex market in one of 3 ways:1. Through Fundamental Analysis2. Through Technical Analysis3. Through a Combination of fundamental and technical analysisPeople trash technical analysis,...

Forex Market Participants : Banks, Hedge Funds, and Corporations

Behind central banks in terms of size and ability to move the foreign exchange market are the banks which make up the Interbank market. It is important to understand here that in addition to executing trades on behalf of their clients, the bank's traders...

FXCM Turmoil

7/02/2017, FXCM to Sell US Accounts to GAIN Capital The US retail FX accounts of FXCM have been transferred to Forex.com, the retail FX division of GAIN Capital. Both FXCM and GAIN Capital have confirmed the successful transfer of 47,000 accounts.The...

How Capital Flows Move the Forex Market

Capital flows encompass all of the money moving between countries as a result of investment flows into and out of countries around the world. Here instead of money flowing between countries to buy each others goods and services, we are talking about money...

Important Things to Consider When Choosing a Broker

1. Security The first and foremost characteristic that a good broker must have is a high level of security. After all, you’re not going to hand over thousands of dollars to a person who simply claims he’s legit, right?Fortunately, checking the cre...

Kathy Lien On Forex Market

 Kathy got her start in forex trading in 1999. She started at JP Morgan in a rotational program that gave her introduction to many markets, which is how she realized currencies is something she wanted to focus on. Kathy identifies herself...

Looking at Probability and Trading Success

Below is an exchange on Forex Factory, a forum for forex traders.Originally Posted* Without meaning to brew up more controversy, how do you guys measure probability objectively when starting out with a new system? * Is probability really just...

Margin in Forex

Most forex trading firms will offer leverage of up to 100 to 1 or more, which requires traders to put up only $1000 in margin for every $100,000 in positions traded. If fully used this would take a 1% move in a currency pair and turn that move into a...

Pips and Fractional Pips

Traditionally a 1 pip move in the market was the smallest move that a currency could make. Another way of looking at this is that a 1 pip move in the market is a move up or down by 1 of the number sitting the furthest to the right of the decimal point...

Rollover

What you are actually trading in the forex market is a contract which requires one currency to be exchanged for another and delivered in two business days. For example, if I buy 1 contract of EUR/JPY then I am buying 100,000 worth of Euros and selling...

The Three Economic Models of the Forex Market

By Justin StewartWe have already seen the explanation of the 4 major economic theories that exist within the Forex market. These theories were labeled as follows:1. Balance of Payments2. Interest Rate Parity3. International Fisher Effect4....

Trade Flows

As most of you are aware, when the market for something is allowed to operate in an unrestricted manner, price is set by the intersection of supply and demand. This means that if there is more demand than supply for something then price should rise. Conversely...

trading system sample

The strategy: Indicators: 20EMA. Donchian Channel 20. Slow Stochastic 5,3,3.  ATR 5. Set up your indicators on the daily chart time frame.This strategy seeks to catch price moves that develop into trends. Like many good strategies it seeks to ...

Transaction Costs

As when trading any market, the transaction costs one pays can have a significant affect on returns, especially for the active trader. Unlike other markets however, where transaction costs outside of commissions are fairly standard, because the forex...

US Dollar is the King

The US Dollar is involved in approximately 89% of all forex transactions, so the fate of the US Dollar has huge implications not only on the US Dollar, but on the forex market as a whole. While currently the US Dollar is still king of the currency world,...

What is Forex?

If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet (if you’re a dude) or purse (if you’re a lady) or man purse (if you’re a metrosexual) into th...

World's Main Currencies

Although there has been much press recently about the US Dollar loosing its status, there is no doubt that as of this time and most likely for the foreseeable future, the US Dollar still reigns supreme over all other currencies of the world. The price ...

Learn To Trade

The process of trading is not to be taken lightly.  Should you decide to venture upon this journey, you must know that you run the risk of losing every friend you have, your sanity, your dignity, all your worldly possessions, and most of all every ...

Analyzing a Pullback System

It is important for the trader to have multiple techniques in his toolbox, since different techniques are favored in different market conditions. I run over a dozen different scans every evening and select the ones best suited to the current market environment....

Automated Robots and Systems

What is a robot? A “robot” is a program that strictly uses technical signals to enter in trades and lets the human sleep in a hammock on a beach while he “makes” money.With a push of a button, the robot runs continuously, making trades signaled by math...

beginners guide how to analyze the stock market

Analyze the Stock Market For Dummies There are two schools of thought in stock market analysis. Some investors believe the best way to analyze markets through fundamental analysis. While others believe technical analysis is the way to go .it's probably...

Call Option

Let's say that a trader is bullish on silver short term, so he wants to trade 1000 shares of SLV. Instead of buying 1000 shares of SLV, the trader buys 10 Febuary SLV Call Options that expire in about 6 weeks.A Call Option locks in a pre-set buy price...

Carry Trade

On the surface it a simple arbitrage between interest rates. Underneath, it determines the viability of a currency and, therefore, a nation and can rock the world. Again, the carry trade is an investment strategy involving basic arbitrage between interest...

Dark Secrets: Internalization and Payment for Order Flow

Many of these retail orders are internalized. In simple terms, that means the opposite party to your executed order was your broker/dealer themselves. These retail orders never leave the brokerage house. Other times your broker will ship your order to...

Economic Releases

how the market reacts to economic releases is generally determined by two factors:1. How important the market considers a particular release to be.2. How close to market estimates the number comes in at. Remember that markets anticipate news,...

Elliot Wave

The Elliott Wave Principle is a type of technical analysis that utilizes past cycles or repetitive patterns to identify predictable market behaviour. It was developed by Ralph Nelson Elliott, who published his theory of market behaviour in the book, “The W...

Follow and trade the trend

Now that we have determined that there is a trend happening, we are going to finally start to trade it. There are a few different ways to take advantage of a trend, let’s look at them…- Support and ResistanceThe first and most basic method for...

Forex

The foreign exchange market is the "place" where currencies are traded. You'll see the terms: FX, forex, foreign-exchange market and currency market. These terms are synonymous and all refer to the forex market. There are many interesting things that ...

Futures

Prior to the invention of modern day futures exchanges, farmers and purchasers of agricultural products such as grains were subject to wild fluctuations in market prices. During the harvest season when farmers were bringing their grains to market, there...

Futures Trading Transaction Costs

When trading futures there are 3 primary transaction fees that traders need to be aware of which are:1. Spread2. Slippage2. Commissions3. Exchange FeesFirst lets take a look at the spread. Like when trading any other financial market,...

Get With The Strength

All traders, at one time or another, try to find the secret to success - the trading Holy Grail. There is no Holy Grail, of course, but I can share with you a secret that comes close: If you want to make consistently large trading profits, trade strongly...

Hedging Using Futures Contracts

This is designed for the person who is seeking to profit from price fluctuations in the futures markets, who are also known as speculators. It is important for speculators to understand however, that like the primary purpose of the stock market is to...

How to be a successful trader !

1. You have to have Discipline.Discipline is at the top of the list for a reason. Discipline makes it all work. Discipline keeps you on track and focused. There will be temptations along the way that will entice you to trade in a manner not in accordance...

How To Gauge Momentum

we have couple of our chart analysis strategy with risk control using the same price chart tools. the idea is to keep this simple. a simple price chart using price intervals that allows us to perform quick analysis in order to achieve our goals the next...

How To Identify The Trend

actually this is the simplest part of the entire method. Albert Einstein once said “Make things as simple as possible, but not simpler”, and to that end, here is a good way to identifying if a market is in a trend.Use two Exponential Moving Averages: ...

Jack Schwager - advice for newbies

What advice would you give to newbies?Jack Schwager: I would advise rookie traders not to assume any particular trading strategy is right or better for them.The process is first, read.That’s a challenge in itself. However you do it, just pi...

Market Adaptive Trading

Using the same trading technique and exit strategy in all market conditions is likely to give you lots of practice at taking drawdowns. There is no single technique that magically works in all markets, no matter what those slick brochures we all get in...

Market Maker

Ways of a MM (Market Maker)For the most part MM don't have a clue nor do they care to learn, about the fundamentals of the stocks they trade.They just try to make orderly markets. When dealing with BB stocks it is very easy for a MM to get trapped...

Online Stock Brokers

TD Ameritrade - Rated #1 Online Broker Overall in our 2017 Review, TD Ameritrade offers one of the largest varieties of trade tools through its desktop based Thinkorswim and web based Trade Architect platforms, Best in Class ratings for numerous categories...

Put Option

Put options are basically the right (but not the obligation) to sell an asset. If an investor owns an asset, they can thus buy put options to hedge against short-term downwards movements.Here is an example from the video: Trader is long 100 shares...

Review of Van Tharp's - Trade your way to financial freedom

Chapter One - The legend of the Holy GrailAs promised I start my review of this book with an open mind and hope to keep your interest along the way!!Now if you are like me the title might lead you to immediately think of the Monty Python film...

Stock

A stock is very simply representative of a small piece of ownership in the company whose stock you are buying.A “public” company is one that has issued shares by selling them to the general public. Once those shares have been sold, investors can tra...

Stock Option

An option is simply a contract that provides the buyer the right -- but not the obligation -- to buy or sell a given asset at a specified price within an fixed amount of time.For instance, one might buy an option to buy 100 shares of AMZN at $750...

The VIX

Investorwords.com defines the VIX as:Quote:"Market Volatility Index. An index designed to track market volatility as an independent entity. The Market Volatility Index is calculated based on option activity and is used as an indicator of investor...

trading indicators – a beginner guide

Support and Resistance The markets bounce around every day as investors enter and exit, finding the equilibrium price where buyers and sellers are content. When new information becomes available, an exchange will quickly move to a new equilibrium level....

Trading psychology

If you choose a simulation strategy that has a defined number of setups, a fairly specific strategy for limiting losses, and you stick to that strategy like glue, never deviating from it – then simulated trading is a logical way of testing your method i...

Weinstein Basic Rules for Trading Success

Mark Weinstein 7 Trading Basic Rules for Trading SuccessWork hard on the basics and know all the important details about the instrument you are trading.Most successful traders are humble not arrogant. If you are arrogant you are likely...

Biases

Imagine you're in a supplement store shopping for some fish oil or whatever your supplement of choice is. you find the bottle and it's $25 a bottle. before you buy it someone else in the store taps you on the shoulder and says hey if you walk 20 minutes ...

Money Management : A New Approach

Have you come across a trader who reported a large amount of profit from a relatively small account? Such stories are wide spread and often attract inexperienced trader’s attention.Was it a Fluke? Perhaps just a stroke of luck. Anyone claiming outstanding g...

Probability Neglect

This topic is probability neglect, the dangers of small probabilities. Another about how small probabilities are pushed down in the mind of the trader to become even smaller than they actually are. They are literally neglected in many cases. But there's...

Strategies for Trading Stops

IntroductionEver wonder what day traders do when they go on vacation? Do they dial into their net every hour with their laptop to check their trades? Do they call their on-line broker’s telephone response service? Nope, they have a great time and e...

Trading Simulators

Well...By now you must think you're hot stuff and can out trade the pros.LOL...Ok hot stuff.  Now's the time to test your skill.  Many Brokerages have trading contest or free on-line simulation trials where you are able to work with live data while o...

Trailing Stops

A trailing stop is an order to buy or sell a security if it moves in an unfavorable direction. Trailing stops automatically adjust to the current market price of a stock, providing the investor with greater flexibility to profit, or limit a loss. The ...

Psychology

Trading is 10 % knowledge and the application of that knowledge, the rest of trading really is psychological.Why do 90 % of new wannabe traders fail? Because they have not developed themselves psychologically; Trading is a skill that can be learned,...

Are traders preprogrammed to fail?

Trader Todd Brown explores the psychological inner workings of traders and shines a spotlight on the obstacles between unsuccessful traders and their profit goals.    

becoming a trader

I was burned out and had analysis paralysis badly. I had taken in so much info I was overwhelmed; step away from the markets for a while to gather thoughts and re-focus.38 steps to becoming a trader by Mike McmahonThey are as follows:1. We...

Belief In Yourself

Belief is the one single thing which one needs to master anything . Legendary cyclist LanceArmstrong was told that his chance of surviving was almost negligible as he was suffering fromtestical cancer , brain tumour and lungs cancer . Yet he firmly believed...

big players

You don’t have to be a big player to understand their motives and actions. You just need to put yourself in their shoes.The big players consist of an exclusive club of wealthy individuals who are born rich or self-made billionaires, major banks, i...

Destroy Your Trading Account With These Mistakes

One of the most common mistakes is sticking in a trade where you know your trading strategy is correct, but the market continues to move against you. As the famous economist John Maynard Keynes once said: “The markets can remain irrational longer than yo...

emotion

Efficient financial theory assumes that all investors are rational. However, in reality, emotions often leads investment decisions, creating exuberant and panics. Behavioral finance offers clear explanations where current financial theory often fails...

Failures

Thomas Edison's teachers said he was "too stupid to learn anything." He was fired from his first two jobs. quote by Edison: "I speak without exaggeration when I say that I have constructed three thousand different theories in connection with the...

Following the Sheep to Slaughter

DEFINITION of 'Sheep' An investor who lacks a focused trading strategy and trades on emotion and the suggestions of others, including friends, family and financial gurus. This type of investor often makes rash investments without first determining whether...

Graeme's Trading Blog - Review of Van Tharp

Review : Trade your way to financial freedom Chapter One - The legend of the Holy GrailVan Tharp makes some great opening remarks and reminds us that:Quote: Life starts out in the neutral position between profits and losses - it neither...

I deal with mine Trading psychology

According to Mark Doulgas ( trading in the zone ) our actions or judgments are based on our beliefs. So in order to achieve my conquer over them I have to take the energy from those beliefs. How, well I have to protect my self from getting into their...

January Effect

Facing January, most investors have come to expect a surge of buying often termed the "January effect." To be sure, it is usually a strong market month. The most feared month is October. Many remember severe intermediate declines in October come to be...

Keeping Your Focus and Don't Gamble

Introduction Ever have one of those days that starts out just great then, goes in the dumper real fast and you’re powerless to do anything about it? Well, that can happen real easily in the stock market if you fail to keep your focus on the facts a...

Limit your risk to what you can afford to lose

When I first joined a well known stock picker's group I had about 20K seed money to invest. While I am an experienced Mid-Cap Corporate COO, Private business owner, and have many excellent long term investments, a large 401-K, paid-off home, etc. and...

Mark Weinstein

Mark Weinstein interview with Schwager:You mentioned earlier that one of the reasons you split with your former trading partner was that your own trading style was geared to extremely low risk. Since 1980, what was the worst percentage drawdown you...

Martingale and Anti-Martingale Approaches

A position sizing strategy which incorporates the martingale technique is basically any strategy which increases the trade size as a trade moves against the trader or after a losing trade. On the flip side a position sizing strategy which incorporates...

Money management and Discipline

 I personally do not see how one could get ‘edge’ with trading system in markets. But I believe this is a matter of definition. My opinion is that all edges come from money management and self-control/discipline. You cannot control the markets, but...

Never gamble

Most traders, as Steven A. Cohen wrote "are indecisive, lack conviction, and are afraid of taking risks and making mistakes;" moreover, they are "unaware of the personal demons that are holding them back from true success." Trading Like Gambling - Signs...

News Events

News comes from journalists who could be reporting from a biased source: a "Smart Money" manipulative liar or an analyst who is trying to get the public involved in a scheme to manipulate a market. Even taking a contrarian view doesn't help because we...

Overcoming Losing

1. Accept The Inevitability of Losing -- For active traders, losses are a part of the cost of doing business. Like any entrepreneur you should work to reduce your costs as much as possible, but expecting costs to be zero is unlikely.2. Know Your Edge...

Perseverance

Perseverance=to maintain in spite of  difficulty, obstacles, or discouragement and continue  steadfastly.I'm willing to make it happen, no excuse. it's possible.success is a lonely road that I have to walk alone.too delicate everything to...

Protecting Your Trading Capital

Learn to Protect Capital FirstMore than 90% of people trading the market lose money and the major reason is because the majority do not use correct Money & Risk Management principles: Money Management, Position or Trade Sizing…One of the m...

psychology, how I deal with mine!

Which are my weaknesses?1. I am too impulsive2. I have hard time to keep my patient3. I loose easy concentration4. Pretty often I loose my self in the charts5. Seeing the both sides of the coin. In some cases this can be helpful, but...

Sanity Always Prevails

Neil A Costa We have had a stock market shakeout. Did it really come out of the mist? Did it creep up on traders like a thief in the night, stealing their profits before they knew what had happened? NO! There were warning signs. There were warning...

Simulators VS real trading

In general no matter what market people trade they will almost always do better in paper trading than they will in real trading.The first is that slippage, or the difference in the price where you click to enter a trade and the price where you are...

Stages of Development of a Trader

When you read about expert traders in books such as Market Wizards you must be amazed with the ease and poise with which they conduct their business. Why are they experts, and how did they get there?Expert traders are in complete control of themselves...

Stop Taking Profits Too Soon

The Beauty is : Big Profits and Small Losses You can design a great trading strategy with profits size two times  or more the size of losses, as well as you can design a great trading strategy with profits size half the size of losses. Base the distance ...

Straits make you sucessfull

1. Dont quit, never give up. U have to get to the finish line.2. Drive: what drive u? What make u go extra mile when u have no energy left? What make u do it better? Is it ur desire to beat ur competitors? Is it ur pain? Is it ur love for it? Things...

Stressed Men Take More Risks

Stressed men take more risks, while stressed women play it safe, according to research published in the Journal PLoS One this week. ©Nichole Lighthall, from the University of Southern California Davis School of Gerontology, asked volunteers to play a ...

Successful Trading Journal

A major factor that separates the successful from the unsuccessful is those who are successful look at each experience as a chance to learn and grow where those who are not move from one experience to another without learning much at all. With this in...

The Singing Trader

Garnett ZnidaricMany people know me as Mr Trading Plan. There are some with damaged hearing that refer to me as The Singing Trader. I earned that title when I sung / murdered a verse of a classic Sinatra song at the start of a presentation on applied...

The Temple of Boom

Part A - Speculative Mania Neil A Costa Introduction One of the fundamental weaknesses of human beings is our desire to 'get rich quick'. On the one hand, our head tells us to be cautious. We know that there are few genuine rewards to be gained...

The Temple of Boom

Part B - Surviving and Prospering Neil A Costa Introduction The trading and investment industry is made up of, on the whole, fine honest and ethical people. As with any industry, however, there are those who try to prey on people using get-rich-quick...

The Traders' Four Letter Word

Chris Shea As a coach of individuals at all levels of the trading spectrum from beginner to seasoned supertrader, I am often asked what the biggest hurdle is to overcome to become consistently successful. There are numerous barriers to success...

Things Your Trading Journal Should Tell You

Simply writing the days activity down in your trading journal is the first step. The next and equally important step is to review your journal on a regular basis to see what is working and what is not. This way you can leverage your journal to help you...

Trading is a business

Trading is a business and a performance activity that must be measured over the long-term, but managed on a trade by trade level. For example, your main goal should be to come out net profitable over a period of trades, days, weeks, or months. It doesn't...

Trading is hard

I had no idea what trading was. One night i saw an infomercial on TV. People made tons of money trading stocks, party with hot chicks. They made it ez. I bet they made a ton of money. It was better than selling porn.Trading is very hard. It's the ...

Trading schools

my experience : they dont make it as traders, they make it as educators.after watching hours of youtube, videos, that is my conclusion.teachers teach from text books. We r not kids, we can read books urselves.the smarts learn from their own...

What's Your Edge?

1. In order to consistently win, you need an edge ( an advantage that others don’t have. ) 2. On some level, you need to be contrarian -- meaning you need to be willing to go against the crowd of people you’re competing with.Contrarian : If you ...

Why people lose money in the stock market?

By John Hwang The reasons for losses are simple. In fact, there are only two root causes for investing losses :Over estimation of one's ability to invest Letting emotions, not processes, guide decisions. These two reasons account...

Why Speculators Win

Chris Shea There is a common belief that only 10% of people who set out to become traders actually achieve their initial desire for consistent high returns over the long haul. Objective data to verify this belief would be extremely difficult to obtain...

Why Traders Lose Money

You will lose money in trading. I guarantee it.Smart people who have been intelligent enough to accumulate large sums of money in their non trading careers open a trading account and loose huge sums of money making what you would think are easily...

Why We Hold Losing Positions

Humans in general grow up being taught by their environment of the importance of always being right. Those who are right are envied as the winners in society and those who are wrong are cast aside as losers. A fear of being wrong and the need to always...

WILLIAM D. GANN

by: Ticker and Investment Digest, Vol 5, December 1909 WILLIAM D. GANN An Operator Whose Science and Ability Place Him in the Front Rank His Remarkable Predictions and Trading Record Sometime ago the attention of this magazine was attracted to...

Win Some You Lose Some

calculating right trade size is a relatively simple process. Even so most traders don’t bother doing it until they suffer large losses and then decide to learn more about money management. New traders concentrate on the result or the outcome of the t...

you must keep your emotions out of investing

stock investing beginners guide  Why you must keep your emotions out of investing? Investing your money is a personal thing. It’s your money; you work hard for it so of course you have an emotional attachment to it, which can lead to problems. St...

Rules for Rookie Traders

Only trade with money you can afford to lose (because you will loose money. That I can guarantee) Never risk too much capital on one trade. Be patient: Plan your trades, then trade your plan. Be disciplined: Have a trading plan and stick t...

99% Of OTCBB, Pink Sheet Stocks Are Scams, Schemes & Frauds

Yes, 99% Of OTCBB, Pink Sheet Stocks Are Scams, Schemes & Frauds This one, which plays on greed, is one of the oldest digital rip-offs on the books. You get an email If you are able to buy shares now, you’ll receive a sizable fortune as a...

Basic Principles

On the fundamental side:- it is not too hard to make any stock sound good. If they have some kind of opportunity, a good promoter or publicist can probably convince an investor that the stock deserves consideration. Listen to the story, but don't...

Classic Rules of Trading by Linda Bradford Rascke

Time Tested Classic Trading Rules for the Modern Trader to Live By. They obviously withstand the age-old test of time. I'm sure most everybody knows these truisms in their hearts.1. Plan your trades. Trade your plan.2. Keep records of your trading r...

Demo Your Way to Success

YOU SHOULD DEMO TRADE UNTIL YOU DEVELOP A SOLID, PROFITABLE SYSTEM BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.WE REPEAT – YOU SHOULD DEMO TRADE UNTIL YOU DEVELOP A SOLID, PROFITABLE SYSTEM BEFORE YOU EVEN THINK ABOUT PUTTING REAL M...

Donchian Trading Guides

General Rules:Beware of acting immediately on widespread public opinion. Even if it is correct, it will usually delay the move. From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume...

Gaps

A gap is a change in price levels between the close and open of two consecutive days. Although most technical analysis manuals define the four types of gap patterns as Common, Breakaway, Continuation and Exhaustion.A Gap Up occurs when the opening...

guaranteed to lose money

If you trade without the proper preparation you’d be better off to Vegas. You are guaranteed to lose money in front of your computer screens. It's better to have fun and loosing money in Vegas.I blew through my accounts. You need to be very caut...

Identifying Trend

Up trend : A series of successive higher highs and higher lows .Down trend: A series of successive lower highs and lower lows .The simplest method is : look at the 2-3 year daily chart. If it's up, the trend is up. If it's down, the trend i...

Protect Your Self from You

All Traders, and we do mean ALL traders, LOSE money on trades. Ninety percent of traders lose money, largely due to lack of planning, training, discipline, and having poor money management rules.If you hate to lose or are a super perfectionist, you’ll a...

Road Map

AFTER you have:Developed your Trade Plan Determined when and where you will trade Learned your System Tested, refined, retested, and practiced on a Demo Account UNTIL CONSISTANTLY PROFITABLE Identified how much Capital you can afford...

Step 1, Rule #1

Rule #1:   Never, never, never ever trade with real money until you have successfully "paper traded"   at least 75% of the time.Glossary Term: Paper Trading - Simulated trading on paper. Glossary Term: Cost Basis - The IRS defines the cost ba...

Step 2

A great General once said, "In order to do battle with an enemy, you must know him first.  Never go into battle against a stranger for surely you will lose." Such words also hold true for trading in the markets. If you don't know what you're doing ...

The Gentle Art of Forecasting

Neil A Costa If there ever were a holy grail of trading and investing, it would have to be the ability to calculate the date and price of every intermediate or cyclic market top and bottom. Our trading would then be simple and easy - we would buy the...

Trading for Beginners

So you want to learn to trade? This site will not teach you how to trade.  It will provide you information and information that will explain the trading process.  The process of trading is not to be taken lightly.  Should you decide to venture upon th...

Trading Journal

You must be insane if you are not keeping a Trading Journal. One of everyone’s favorite definitions of insanity is "doing the same thing over and over, but expecting different results."A Trading Journal is not about simply tracking your numbers a...

trading rules

1. be a sheep and f ollow the trends . This is probably some of the hardest advice for a trader to follow because the personality of the typical trader is not "one of the crowd." Traders are highly individualistic; the markets seem to attract those...

Trading Rules example

The mantra for successful trading: “Let your winners run and cut your losses.”It’s about personal discipline and managing your capital account with the goal of minimizing losses. With the Trading Plan you think in terms of probabilities. With your ...

WD Gann's 28 Trading Rules

Never risk more than 10% of your trading capital in a single trade. Always use stop-loss orders. Never overtrade. Never let a profit run into a loss. Don 't enter a trade if you are unsure of the trend. Never buck the trend. When in doubt, get out,...

Trading Plan

Trading is no different from any other business in this sense and it is my opinion that those who fail to plan out their trading like a business are doomed to failure as well. With this in mind it is important to have a written business plan for your...

experimental Trading Plan

This is a step-by-step Trading Plan for short to medium term swing trading in the Equities markets. This will be an ongoing project starting as a demo account. Every aspect of this will be experimental. This will start focused on trading the Wyckoff Method....

Finding an Edge

Traders will look for set-ups, patterns, or situations that give them 'an edge' for predicting what price will do next. In other words, the trader is looking for something that helps improve their ability or chances. An edge is not something that always...

follow a plan

I started trading with the attitude as most new traders. I thought I could double my money in no time and gain financial freedom that we all seek, after all it’s easy right buy low sell high ‘wrong’. As I was dreaming about my financial freedom my ac...

Paper Trading

Yea..I know, you're anxious to get started. You've got money to burn and its burning a hole in your pocket. You see great action going on and a lot of people are making money. Right? Ah...well...what you don't see are all of those people not making money,...

Review - The Original Turtle System

Looking for a Trading Plan?Remember the movie "Trading Places"? (1983) Well a similar experiment was actually carried out by legendary commodity traders Richard Dennis and William Eckhardt. This is the original Turtle Trading System rules. (37 pages)It...