Breakout
What happens if you miss a trade? Newer traders will often make a frustrated FOMO trade, and add a loss to what should have been a non-event. More experienced traders gain the self control to move on—this happens and it’s just part of the game. But sometimes we
Breakout
One of the disconnects for new traders is seeing how patterns play out in the real world. When we learn patterns, we usually start from pristine, idealized examples. But in actual trading, things get messy and simple patterns are not so simple. Breakouts and breakout failures can give us some
Failure Test
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Anti
Recent action in copper futures gives us some market lessons. These can be adapted to other markets and timeframes (so if you just trade stocks or currencies, don’t skip over this because it’s a futures market!) I’ll try to keep this as short as possible, but there
Failure Test
Multiple timeframe analysis is almost a buzzword in technical analysis. I have been involved in markets actively for two decades, and have been an active participant in dialogue about markets for most of that time. It is interesting to see different techniques take the spotlight as groups of traders hold
Breakout
We can simplify many of the problems of technical or tactical trading to one question: assume that a market just made a large move. Do we want to fade (go against) that move, looking for reversal, or do we want to take a position with that move, looking for continuation?
Failure Test
Despite all the good reasons for focusing on with-trend trading, the first pattern I taught in my book was a little countertrend pattern--the failure test. Why? In this case, the reason is that the pattern is clearly defined, and it's easier to make concrete rules for things like
Failure Test
I've focused quite a bit here on quantitative aspects of trading and market analysis, and I've also just scratched the surface of the thorny subject of intuition. Today, I want to look at something slightly different: how we can use some subjective elements in our analysis,
Failure Test
US Stocks stand at an important potential inflection. Structurally, we have seen much support for US stocks to emerge as the global relative strength leader, should stocks break out into another rally leg, and it is important to temper any natural bearishness. Yes, much of 2014 has been confusing, and
Failure Test
[dc]L[/dc]et's take a quick look at some developing market structure in the US stock market. First of all, consider the broad context: we are firmly ensconced in summertime trading conditions. This means low volume and, usually, low volatility. In fact, volatility is extremely low by
Failure Test
[dc]I[/dc] want to write what might be a complicated blog post, but stick with me. I'll try to make it as clear as possible, because there is a good lesson here. Today, I want to look at volatility, how volatility evolves (changes), and how we can
Failure Test
[dc]T[/dc]he chart above is a daily chart of the EURUSD. I've written before about some of the challenges with using technical analysis in currencies—it's not that it can't be done, but it does require, in my opinion, a slightly different