Breakout
In this post, we'll take a look at a common trend-following trading idea: channel breakouts (also called Donchian channels). I want to share with you a way of looking at market tendencies, and structuring tests of those tendencies, that I have found to be very useful and powerful.
Chart of the Day
I thought it might be useful to star the week with a look at trends and possible inflections in a number of major markets. Here's a quick look at stocks, biotechs, Treasury futures, and crude oil. Bottom line: * Stocks failed to develop downward momentum. Further consolidation around current
Trend Termination
Let's talk about endings today. If we can better understand the patterns that often occur when trends end, we are better equipped to manage risk, place stops, and, in general, to trade those trends. Crude oil provides a good example of a dangerous ending in a specific kind
Pullback
Effective trading patterns are usually simple. The more complicated an idea is, the more likely it is the result of trying to fit very random data (i.e., the market) into a preconceived mold. I think many of the patterns and ratios of traditional technical analysis are the result of
Trading tools
An in-depth look at the intraday market stats page on this blog, with some ideas for using these stats to enter and manage trades. This is not just a tool for intraday traders, though active traders will find valuable tools here. Longer-term traders can identify good entry spots, analysts can
Trend Termination
A look at current conditions in crude oil, and some general comments on how to fade a trend.
Chart of the Day
[dc]R[/dc]elative strength is an important trading concept, and there are a lot of ways to define, monitor, and trade these relationships. Looking at the sector relative strength within the US stock market gives a deeper understanding of money flows and psychological support for a bigger rally. One