General Comments
[dc]I[/dc] have written a lot this week, much of what I wrote calling for critical attention to traditional technical analysis. I thought it might make sense to end the week by stepping back, putting things together, and showing some tools and ideas on charts that do work. So,
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
Breakout
[dc]I[/dc] wanted to follow up on my recent post about trading the rally in India. I ended that post with a question: We were planning to enter EPI (an earnings-weighted India ETF) on a breakout above a long daily consolidation. However, the market gapped open far above our
General Comments
[dc]R[/dc]ichard asks: "I saw a trade setup, but also saw reasons not to take it. [MACD divergence] A news release was also scheduled soon, and a large move before the report set up the trade again. I didn't take the trade, but the report
General Comments
A list of rules for traders and risk managers.
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
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
A look at one reason why daytraders may struggle...
General Comments
Gap openings can present both danger and opportunity to swing traders. You need a plan for handling these volatile and potentially dangerous events.
General Comments
[dc]S[/dc]ome of the most persistent myths about trading revolve around the idea of low-risk trades. You will often hear traders say that they took a trade because the risk was "only a few pennies" or they could use a "very tight stop" on
Individual Traders
A casual understanding of mathematical concepts can often lead to incorrect conclusions. This post shows that the direction of markets on charts does not necessarily reveal anything about the correlation between those two markets.
Individual Traders
[dc]"F[/dc]irst, know your risk." Every trader has heard this, and for good reason: It truly is one of the most important elements of successful trading. Amateur traders get into a trade thinking about all the money they stand to make, while professionals always define the