Moving averages are the best indicators for the direction of a trend because of their power and simplicity to smooth out price direction in trend trading. They create lines on your charts to filter out the daily trading ranges and show the true direction a market is going in for a specific time frame. When […]
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In trading more action and time spent watching screens is not necessarily rewarded with more profits. The majority of the time trading every day and watching every tick in price is not rewarded by making more money the odds are greater that emotional errors of over activity will be made. Ed Seykota had some of the best annual
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“Trend followers use reactive technical analysis. Instead of trying to predict a market direction, their strategy is to react to the market’s movements whenever they occur. This enables them to focus on the market’s actual moves and not get emotionally involved with trying to predict direction or duration.” -Michael Covel Trading a trend in price
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Chart Courtesy of StockCharts.com Breakouts can be signals based on price breaking and closing above a declining trend line, horizontal trend line, or a close above previous price range resistance. Once a breakout is entered a stop loss can be placed at the low of the bar of the day of the breakout. If it
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Market Wizard Richard Dennis known as the ‘Prince of the Pit’ turned $1,600 into $200 million in 10 years trend trading commodities. What happened when legendary trader Richard Dennis put a want ad in the paper to hire traders? What kind of results would ordinary people have if they were given a winning system and
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No trading strategy works all the time because the market doesn’t stay the same. Markets change from range bound, to trending, and at times become very volatile but go nowhere. Quantified trading signals can be based on different types of price action patterns created in different types of market environments. Trend traders buy high in
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This is a Guest Post by Chuck McCleary @optionsappetite. When the Volatility Index (or VIX) gets above 20, most traders take their foot off the gas due to heightened uncertainty in the markets. But to options traders that sell premium, higher volatility equals more opportunity. Let me explain why. Historically, implied volatility (IV) is always greater
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This is a Guest Post by Jake @TrendSpider. In this weekend’s analysis, we take a look at the continued volatility during the month of August. The markets were anything but stable with huge moves to the downside and upside but SPY managed to hold above it’s weekly EMA (50) which has been a crucial level in
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The Donchian channel is a technical indicator used by traders as a tool for trading price ranges. It was created by the father of trend following Richard Donchian. A Donchian Channel on a chart is created by using the highest high and the lowest low of the last periods of the timeframe on the chart. The space between the
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Technical analysis is a process for evaluating the historical price action on charts to identify the current trend or chart pattern to establish the possible probability of price action in the future. Technical analysts analyze past price action trading activity and the pattern of price changes in a market to project possible future price movements. Technical analysis
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