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Trading Educators Blog

#1 Trading Blog Site
Apr
01

Limit-up! (This article is for futures traders)

Joe! Is it true that selling a market when it is limit up is usually a great strategy? This "brilliant" strategy stems from the idea that selling a market at limit-up, may result in the trader gaining two limit moves in his favor while theoretically not losing any money the day of entry. I think is that this is an absurd idea. I don't advise this high-risk approach as a trading tactic. Keep in min...

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  779 Hits
Mar
25

How Long?

Hi! Can you give me some principles to determine how long I should set an expiry for in a pending order? Should it be a multiple of the time frame (e.g., 12 X 15 minutes)? If so, what multiple would you recommend? Some other method? You sent an interesting question, but no detail as to what you are trading. In any event, I know of no formula regarding how long to wait for an order to be filled. In...

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  810 Hits
Mar
18

Compendium?

Hey Joe! Has anyone that you know put together a compendium of what to look for when you first start out trading? Not that I know of. But consider the following: As a trader, you are in a contest. Your strongest opponent has plenty of capital. He follows a program and he does it without emotion. He is totally aware of the fact that no one knows where the next tick will fall. Whereas he usually has...

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  725 Hits
Mar
10

Look for a Retracement

Once prices have broken out, look for a retracement. Successful retracement trading can lead to very nice short-term profits. When prices finally do overcome resistance or support, penetrate a psychological barrier. or break out of a formation or trading range, it tends to do so boldly at first. But after their initial thrust, prices often seem to need reassurance. It's as if prices need to reconf...

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  926 Hits
Mar
04

Avoiding negative open equity

There is an old saying that when day trading positions have had negative open equity most of the day, and an opportunity arises to exit the market at break-even with less than 30 minutes of trading rises, go ahead and exit the market. Unless the market is moving rapidly in your direction with expanding-in-length bars, and no more than 5 minutes left, exit immediately and consider the opportunity t...

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  839 Hits
Feb
26

Finding Great Investments

I don't write much about investment. I'm a trader. But I did come across something I am happy to share. I'm a long-time subscriber to the Stansberry Alliance, and this comes from an email article. The 10 Ways to Find Your Next Great Investment Opportunity Finding great investment ideas is hard work. They don't just drop from the sky and say, "Here I am!" You have to uncover them. Today, I'd like t...

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  897 Hits
Feb
17

Technical Analysis….

Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysts, who attempt to evaluate a security's intrinsic value, technical analysts focus on patterns of price movements, trading signals and various other analytical chart...

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  797 Hits
Feb
12

Swing Trading

When I began trading, no one had ever heard of such a thing as "swing trading." Swing trading, as I recall, began when more and more people had the ability to day trade from a PC. In this issue of Chart Scan, I'm going to provide you with some swing trading help that you need when just starting out. If you follow these rules you will avoid a great majority of mistakes made by beginners. Swing Trad...

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  871 Hits
Feb
05

Develop a ‘feel’ for what is happening

Hey Joe! How can I get a feel for what's happening in the market? One of the things that has helped me was beginning to use tick charts for my day trading. In a past issue of Chart Scan, I explained that there are two kinds of volume: Contract Volume and Tick Volume. Almost everyone is familiar with contract volume. It's usually shown as a histogram at the bottom of a price chart. For a given time...

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  765 Hits
Jan
28

Dirty Tricks

Hey Joe! You've said that prices are not always moved by supply and demand; That they are heavily manipulated in some cases. We know that they intentionally run the stops, but what else do they do? Besides intentional stop running, those who have the power to move prices often resort to other dirty tricks. This may be more-true of stocks and Forex than of futures, but I believe all of the tricks b...

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  1064 Hits
Jan
20

Gold / Silver Ratio

Hey Joe! Have you ever traded the Gold/Silver Ratio? How do you go about doing it? I think I traded the ratio a couple of times. It's not something I pay a lot of attention to. Here's some background about this ratio: According to a Mocatta Metals Corporation article, as of April 1980, when the price ratio of one ounce of gold to one ounce of sliver approaches 40:1 gold should be sold and silver b...

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  790 Hits
Jan
14

Pyramid

During the years I've been in the markets, I have been trained by two super-disciplinarians. One was my great uncle, Julius, and the other was John Wooden. Both emphasized extreme discipline and both told me to be all I can be, which for me was not a great outlook. Having been dyslexic all my life, I grew up with an inferiority complex. My dyslexia was very much present in the area of numbers and ...

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  862 Hits
Jan
07

Stock Options vs Futures Options

Hi Joe, I've attended some time ago the IIG webinar and it opens my eyes to the advantages of selling options. But I've found a lot of webpages on the internet where are listed the many benefits of selling Commodity options instead of Stock options (higher return, lower margin requirements, more liquidity, more premium far OTM..) In the IIG webpage on your website is written: "In 2007, we began to...

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  778 Hits
Dec
30

Inverted Yield Curve

Lately, we've been hearing a lot about an Inverted Yield Curve. What is it, and what does it mean? Yield curve inversion signals late phases of bull market rally. The market's "melt-up" phase is coming. Some of the best gains lie ahead. Canaccord Genuity's Tony Dwyer is known for being incredibly prescient regarding his market calls. As a result, many Wall Street asset managers listen to whatever ...

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  977 Hits
Dec
15

Insider Buying and Selling

If you are unfamiliar with the term, insider buying refers to when insiders of a company - such as CEOs or directors - purchase shares of company stock on the public market or via private placement. Sometimes, the purchase may be the result of a stock option exercise, but often they are public market transactions. Insider buying typically means that the insider is bullish on the company's stock; t...

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  809 Hits
Dec
11

Options and VIX as Sentiment Indicators

I never knew so much about the VIX until I looked it up and began investigating its value. There are many popular and simple ways that options are used to gauge the sentiment of investors. They are used as contrary indicators. When at extreme levels, VIX calls Market Bottoms. VIX is extremely reliable. The CBOE (Chicago Board Options Exchange) Volatility Index – aka "the VIX" This indicator, known...

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  835 Hits
Dec
03

Oscillators

Oscillators tend to be somewhat misunderstood in the trading industry, despite their close association with the all-important concept of momentum. At its most fundamental level, momentum is actually a means of assessing the relative levels of greed or fear in the market at a given point in time. Markets ebb and flow, surge and retreat—the speed of such movement is measured by oscillators. An oscil...

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  822 Hits
Nov
26

The Break-Even Point

Once a trade is entered, there are two possible outcomes: Win or lose. Between the two is the break-even point, and because it is in-between, it's psychologically significant. Losing is involved with fear and hope. Winning is involved with greed. When on the losing side of a trade, the break-even point is a place that inspires hope. Being human we have a natural tendency to avoid risk and loss. Wh...

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  984 Hits
Nov
26

Short-Term Pullbacks

Short-term Pullbacks provide opportunities to enter trades in the direction of the longer-term trend. Trade set-ups like these occur against short-term momentum (the pullback) but are in alignment with the longer-term trend and typically offer high probability and low risk trade ideas with a 2:1 (or better) reward-to-risk ratio. A great way to trade short-term pullbacks is to use a moving average....

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  812 Hits
Nov
19

Learn One Way to Trade and Stick with it?

Hey Andy! My plan has been to learn one way to trade and then stick with it. I would even prefer to learn to trade in a single market in order to simplify my life. What do you think? I think you won't be trading very often, and if you do, you will end up being a loser. When the market environment is not favorable for longer-term trading techniques, you should consider short-term trading techniques...

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  1091 Hits

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.