The Trend

Trading the J-Hook Continuation Pattern

Technical analysts attempt to predict direction by studying past price action and charts. And understandably, there are critics. In fact, some see it a pseudo-nonsense. 

Forbes, for example, says it’s fundamentally flawed.

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Five Simple Ways to Protect Your Portfolio from Volatility

For many, it was one of the most exciting times in history to be an investor.

Stocks soared to new highs. Investors poured money into stocks on an improving economy.  

Investors couldn’t lose. 

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How Ransomware Creates Opportunity

We weren’t prepared.

And it’s very likely, we’re won’t be ready for the next one.

In early May 2017, it only took hours before 200,000 companies, hospitals, government agencies, and organization in more than 150 countries found their computer files held for ransom.

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How to Use the Chaikin Oscillator to Analyze Markets

Any time you use technical analysis, confirmation is essential.

If you’re not willing to confirm, you’re doing yourself a great disservice. In fact, at no time will I ever just use Bollinger Bands (2,20), MACD, relative strength, or Williams’ R% alone.

That’s an amateur, foolish move.

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How to Use the Parabolic Stop and Reverse (SAR) Indicator in Your Trading

The Parabolic Stop and Reverse (SAR), commonly known as Parabolic SAR is a trend following indicator that highlights current price direction.

It also provides entry and exit signals as well with dotted lines.

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What Every Smart Investor Should Know about Market Pullbacks

From time to time, markets make major pullbacks. For example, in early October 2018, it was quite painful for the average investor.

The major indices fell out of the sky. The tech-heavy NASDAQ fell from 8,100 to 7,300. The S&P 500 dropped from 2,925 to 2,725.

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How to Spot Options Opportunities

We’re often told to “Never buy a stock hitting a 52-week low.”

“Stocks in downtrends tend to stay in downtrends.”

“Any stock hitting a 52-week low will always be weak.”

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How to Spot Market Reversals with Bollinger Bands

If you pull a rubber band too far, too fast, what happens?

It snaps back, right? The same thing happens with stocks, indexes, and currencies. If they’re pulled too far in one direction, eventually they’ll snap back and revert to back to the mean. In fact, we see it happen all the time.

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How the Kelly Rule Could Save You Thousands

By now, you’ve heard the expression, “don’t put all your eggs in one basket.”

The same holds true with stocks. 

If I risk too much on one trade and it goes against me, I’ve just made a potential mess of my portfolio. Or let’s say you have a $100,000 portfolio, and you decide to risk 10% of that per trade. If your next 10 trades are now losers, you just wiped out your full account. Bad move.

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How to Use Fibonacci for Entries and Exits

One of the best ways to trade stocks is by spotting support and resistance points.

It’s why so many traders use Fibonacci Retracement Lines – which is based on the belief that stocks will retrace prior moves. However, when it comes to Fibonacci, we’re not just looking for double, and triple tops, or bottoms. We’re looking at what happens at key retracement levels set at retracement levels of 23.6%, 38.2%, 50%, 61.8%, and 76.4%.

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Gap Trading Fundamentals

All of a sudden, there’s a gap in the chart of your favorite stock.

Surprise news, earnings, something unexpected caused a bout of extreme optimism or pessimism that resulted in the move.

Look at Palo Alto Networks (PANW), for example.  In early June 2017, shares closed at $118.59.  However, shortly after the close, news of a massive cyber attack began hitting headlines.  Orders come flooding in overnight.  The next day, the stock opens at $140.

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Engulfing Candlesticks: How to Spot Them and What They Mean

To the average trader, candlestick patterns are a bunch of crosses and odd shapes with bizarre names, like the three black crows, or the abandoned baby bottom. 

But as odd as they may sound, they can provide powerful insight into direction.

For example, one of the oddest ones is the doji cross. But if you spot one of these at top or bottom of trend, you may have uncovered an opportunity to trade a trend reversal. The profit stars, more commonly known as dojis, are commanding reversal signals. These are formed when the candlestick opens and closes at the same level, implying indecision in the stock price.

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A Cheaper, Simpler Way to Earn More Money from your Average Stock

You may have heard that Options are scary, dangerous, or even too risky.

Trust me.  I’ve heard so many excuses my head spins from it.

But they’re not difficult at all. In fact, they offer you greater flexibility and leverage than your average stock. In addition, you’re using an option just as you would with a stock to speculate, for aggressive growth, and income. 

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Technical Analysis: RSI Can Lead to 80% Success

Traders are often told to buy excessive fear or greed.

Unfortunately, many aren’t aware of when to actually pull the trigger, or realize when fear or greed have gotten way out of control.

But there’s a simple way to know exactly when to buy and when to sell.

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Always Look for Agreement with These Technical Indicators

I love when traders tell me technical analysis doesn’t work. 

While they’re entitled to be wrong, the fact remains that technical analysis does work, sometimes by up to 80% of the time. Granted, there is no Holy Grail, but if we use the right indicators, we increase our odds of success. Especially if we apply those indicators to well known stocks that may only be down temporarily.

Let’s look at Raytheon (RTN) for example.

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The Importance of the Money Flow Index (MFI)

When it comes to trading, one of the best ways to tell what’s happening is by paying attention to the flow of money in and out of a stock. 

Surely, none of us want to buy a stock if money is flowing out, right? 

Instead, we want to buy if we’re seeing money flow in, or short if we begin to see signs that money is about to start flowing out of a stock.

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These Technical Indicators are Musts for Your Trading Plan

Every time you trade a stock, it’s essential that you understand the psychology of the buyers and seller.  If not, you begin to run the risk of losing money.

That’s the last thing any of us want to do.

So, we need to understand if the bulls have gotten ridiculously, and unsustainably bullish.  And we need to understand if the bears have begun to lose their minds after a sell-off.

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