Price action trading creates chart patterns in the financial markets through the buying and selling of positions by traders and investors. A chart pattern is a visual record of the votes by bears and bulls around different price levels. There are different types of chart patterns. Continuation chart patterns that confirm a trend is going to […]
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The art of selling a losing position is a key skill in the science of risk management. When you are in a trade that is losing money you have to know when it is time to exit and accept the loss. In theory stop losses and keeping your losses small are simple in concept but
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A risk management process for a trading system is not just math but also includes human psychology. The psychology of execution is just as important to profitability as the trading dynamics of the entries and exits of a trading method. Humans have fear, greed, and egos and these elements can interfere with the process of
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There is some negativity in society about being a trader, in this post I would like to explain the positive side of being a trader and why a trader should be proud of what they do. Some say “A trader doesn’t create or produce anything”. That is wrong. In the history of civilization it was
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Jim Simons was one of the most successful hedge fund managers in history. He was a trained mathematician and quantitative trader and the founder of Renaissance Technologies. His hedge fund specialized in diversified system trading using individual quantitative models derived from statistical analyses of historical price data. His primary models were on pattern recognition. Jim
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Chart patterns are visual representations of the behaviors of buyers and sellers around different price levels. Chart patterns are bullish when a chart is making higher highs and higher lows, they are bearish when they are making lower highs and lower lows, and range bound when they have defined support and resistance levels and no
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A trading journal is the book a trader writes about their own trading. A trading journal records decisions made in the market so you can see any errors in discipline, risk management, or process. If you can measure it, you can change it. If you are mindful of your behavior you can learn from your
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Here is a list of the seven most popular reversal candlestick patterns used in technical analysis to determine a high probability area on a chart for a reversal of a current trend. These patterns show a shifting in power from buyers to sellers or sellers to buyers through the price action of the candle being
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Here is a list of trading strategies used by different types of traders to make money in the markets. Day trading: Day traders open and close their trades inside regular market hours. Day traders avoid the risk of overnight gaps but can only profit from intraday price moves. They close their positions by the end
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Exponential moving average crossover signals are one way to capture trends on a chart by entering a long trade when a shorter term moving average crosses over a longer term one, then exiting as the shorter term moving average crosses back under the longer term one. The inverse of this are moving average cross under
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