Trading tools
One of the tools I’ve come to rely on over the last 10 years is an indicator I call Sigma Spikes. (Read about it and how to calculate here.) This is a volatility-adjusted measure of closes, meaning that it tells us if any single move on a chart is
Trader Development
Consistency in trading results requires consistency of process. If you are doing something different every time you trade, it’s hard to evaluate your results. A simple pre-trade checklist can help to shape what you do and to guide you toward that oft-elusive consistency. My checklist is not your checklist.
Trading tools
I change slowly. The last major change I made to my trading was in 2005, and the smaller changes I've made since then are tiny, incremental changes. Often, they're just time-saving tools that have grown out of my coding work. I also am very consistent: I
Trading tools
I received a good question from J last week: Today I had the other problem: I missed an entry entirely because my Stop Limit order wasn’t filled as price moved through it - I had set the stop at 90.33 and the limit at 90:35. [and the
Climax
A quick lesson on trendlines and what they can tell us about market dynamics. Take a look at a fairly long-term chart of the Dow Jones Industrial Average (below) with trendlines doing back to the low in early 2016. First, notice the light little trendline that ends in late 2016.
Trading tools
I've shared these screens for a while, and they will eventually be part of the new MarketLife project. Until we're live there, I'll keep sharing them here. Here is a link to today's screens: ML_Screens081017 And here is a "how
Trading tools
Trading tools
I’ve looked deeply into ratios, levels, and their application to market data. I won’t rehash all of that work here, but, after literally years of research, the bottom line is that I cannot find a shred of evidence that any of the common ratios or levels (Fibonacci, pivots,
Trading tools
We have limited time and attention. This is one of the realities that developing traders soon face—no matter how hard you work or how well-intentioned you are, there’s a limit to what you can look at, analyze, and understand. It’s important to filter out the noise so
Trading tools
One of the keys to discretionary trading success is knowing when not to trade. Here's a simple chart pattern that can help filter out some of the good times from the bad, and it works on pretty much any market or any timeframe. Take a look at the
Market Math
It can difficult to dig into someone else's work and research. I wrote a post a few years ago about why using the slope of a moving average, moving average crosses, or trend indicators based on multiple moving averages might be a very bad idea. (Answer: because it
General Comments
I thought it might be useful, since most markets are about as exciting as drying paint right now, to take a few steps back and consider some basic tools that most technical traders use. Today, I'm drawing from an early draft of my book, and sharing a few