The Trend

The Easiest Way 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 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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Technical Analysis 101: Chaikin Money Flow

With so many technical tools available, it’s easy to get confused.  But with time, patience and plenty of practice, it gets easier to understand. 

For example, some traders believe that Chaikin Money Flow (CMF) and the Money Flow Index (MFI) are the same thing.  However, the only major similarity between the two is that they are both commonly used momentum indicators.

And that’s pretty much where the similarities end.

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The Ultimate Power Play

If you trade Stocks, Options, Futures or even Forex, it's always nice catching large moves, but it's not always easy to find them. More often than not, day traders scalp small moves on the markets, when it was quite possible for them to catch a move for far greater gains.

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Technical Must-Haves: Bollinger Bands and W%R

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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Technical Patterns 101: Two Essential Candlestick Formations to Know

To a new trader, candlestick patterns are just a confusing bunch of odd crosses and oblong shapes on a chart. Even worse are the names, like the abandoned baby bottom, white soldiers, and doji stars.  But as odd as they may appear and sound, even the oddest ones can help give you the signal you need to be a successful trader.

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How to Spot When a Stock is in Trouble

Ignore a stock clearly in distress, and it’ll cost you.

If you own a stock with negative cash flows, high debt-equity ratios, profit warnings, or even heavy insider selling, the stock is clearly in trouble.

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Bollinger Bands and the Rubber Band Effect

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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The Magic of Moving Average Crossovers

By now, you’re well aware of how to find trends using simple moving averages, such as the 50- and 200-day moving averages.   But you should also know how to potentially spot when a trend could stop dead in its tracks, or birth a new trend.

All we have to do is wait for a crossover to do so.

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The Most Important Concept in Technical Analysis

The trend is the most important concept in technical analysis.

Its strength or weakness can dictate the overall direction of your favorite stock or index.  Potential uptrends can be characterized by a series of higher highs.  Potential downtrends can be characterized by lower lows.

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How to Spot a Breakout Opportunity

Breakouts can trigger incredible opportunity.

Once a stock begins to trend to a new high, or takes our prior resistance points, new buyers begin to emerge, as momentum begins to pick up steam.

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Two of My Favorite Moving Averages

When it comes to technical analysis, one of the necessities for success is the moving average.  In fact, for years, I’ve personally relied on two of them – the 50-day and even the 200-day moving averages.

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Two Powerful Candlesticks Patterns You Can Use Right Now

Over the weekend, I had a family get-together.

They’re always fun.  I get to see relatives I haven’t seen for years. 

Unfortunately, they’re also always full of people you wish you could ignore. My Uncle David is one of those people. The guy who thinks he knows everything about everything, especially about trading stocks and options.

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Kroger: One of the Most Ridiculous Overreactions

Traders overreact.  They do it every day. 

And if you can spot it in time, you could make a fortune.

Look at Kroger Company (KR), for example. 

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Gap Trading Basics

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. 

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Using Fibonacci in Technical Analysis

Nobody ever said trading was easy.

But as long as you’re prepared, the easier it becomes. Especially if you’re trading with technical analysis tools, such as Fibonacci retracements.

 

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How to Spot a Correction (and What to Do about It)

Two of the biggest catalysts in any market are fear and greed.

We’re told to buy excessive fear and sell excessive greed. 

Quite often, though, traders will sell on fear and buy on greed.  But that can be a costly error, one that even Warren Buffett can attest to.  To this day, he still advises that a “climate of fear is your friend when investing; a euphoric world is your enemy.”  And of course, we all remember his advice to “be fearful when others are greedy and greedy when others are fearful.”

 

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