Anti
Note the weekly bear flag on the S&P 500 index. You may call it by a number of different names (wedge, pullback, anti, flag, etc.), but the concept is the same: A period of contracting volatility with an upward bias following a sharp selloff. This pattern could be
General Comments
[dc]T[/dc]his, my first reader question, comes from John in Seattle: I often see and hear people talking about good risk management being a good part of trading. What does this mean exactly? Limiting the size of your losses? Something else? Thank you. John is right. I have
Breakout
Watch DFS in a breakout above resistance (roughly 34.45 – 34.75.) Resistance levels are usually not clear lines, but rather rough "zones" where selling pressure has previously been able to overcome buying pressure. Multiple tests of a level can often set up a good run above resistance,
General Comments
[dc]J[/dc]ust an open invitation here to my readers: If you have topics for discussion, ideas for posts or series of posts, questions on the book, questions on the market or trading in general, please ask. You may either ask in the comments here or email (adamhgrimes at
Breakout
A few lessons here from the daily continuous chart of Corn futures (it's worthwhile looking at the Sept contact along and considering the difference in patterns the roll creates, but that's another story): * The continuous contract has defined a clear range. The potential resistance area (always
General Comments
I thought I'd share a few thoughts today, kind of a "what I've learned in the past 10 years" post. This list was refined and crystallized by the process of writing the book, but this list was also a major reason why I wrote
General Comments
First, take a look at the weekly chart, which shows a classic Anti pattern. (Essentially a consolidation (think bear flag) following a potential trend change.) Now, look at the daily chart, and note two days of tight consolidation—this is an example of using a small technical trigger as an
General Comments
Though I am leaning pretty short on the overall market, any time you have a large one-sided bet on the market, it's always good to have a "go to" list for if those setups fail. VZ is interesting to the long side: * Market leader on our
General Comments
I’ve been absent from twitter, blogging, and social media in general for a while. This was by choice, as I wanted to turn inward and focus on my trading, building my business and finishing the book. For those of you who don’t know me (I’m sure there
Climax
Trends end in one of two ways [dc]T[/dc]he last lecture looked at the power of an intact trend. Of course, trends do not go one forever. They do end, and they tend to end in one of two predictable ways. Consider an established uptrend that has shown
General Comments
2: Trends are more likely to continue than to end [dc]T[/dc]he previous post in this series considered the first principle of price behavior: that markets tend to alternate between periods of trends and trading ranges. This post will dig a little deeper into the power of an
General Comments
[dc]T[/dc]his chart of Natural Gas futures shows a classic pattern: parabolic acceleration outside the Keltner Channel and the parallel trendline. It is difficult to play a move like this as a fade (i.e., buying for a long) due to potentially unmanageable volatility, but it is always