Traders who strongly believe the price of an underlying asset will change significantly in the near future but are unsure about the direction of the move can trade combinations of options that have different directional bias and strike prices. A long strangle is an option play designed to bet on a big move in either […]
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The delta of a stock is always 1.00 because delta is the variance of movement of a stock versus an option contract. The delta of an option is the magnitude of the move in the underlier that the option will capture currently based on the odds of the option expiring in-the-money. Delta quantifies the amount
The post is a sample of a chapter from my book The Ultimate Guide to Chart Patterns. Bullish Flag Pattern Chart Facts: The bullish flag is a continuation pattern of the previous uptrend. A bullish flag chart pattern occurs after an uptrend out of a previous price base. The ‘pole’ is represented by the previous
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Trending markets are ones that go in one primary direction for a sustained period of time. Here are the signals for an up trending market: The chart makes higher highs and higher lows. Price is trending above the moving average of the time frame being analyzed. Price is near all-time highs or 52-week highs. The
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Since we all have limited time, energy and resources every decision we make comes with a trade off. Even procrastinating, making no decision and doing nothing is a trade off versus potential action and opportunities. Making any choice changes the course of our life and collapses potential paths to your future. At any one time
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“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes, the ones who see things differently-they’re not fond of rules. You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things. They push
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“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who
The current Charlie Munger new worth in 2021 is $2.2 billion and he currently ranks #1580 on Forbes Billionaires list. Charlie Munger at 97, remains the famed vice chairman of Berkshire-Hathaway and partner of Warren Buffett for their annual shareholder meetings each year. Charlie worked with Warren in Buffet’s grandfather’s grocery store in Omaha, Nebraska
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This is a guest post by @PattensWizard on Twitter. Technical analysis is the study of prices over time and the analysis of chart patterns formed by price movements. So, a relevant question that often traders ponder is “What timeframe should I choose?” Another question that traders also frequently ask is “Why does trading timeframe matter?”
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The law of small numbers is a fallacy that leads people to believe that a small sample size of data will be enough to resemble the normal data of the whole and determine the probabilities of future sample sizes. In trading this error would lead someone to backtest one year’s worth of price action signals
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“A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world.” – Seth Klarman For investors the margin of safety is the variance between the fundamental value of the underlying company of
A list of the current most shorted stocks right now can be a great place to start for potential deep dip value buys. Stocks with the highest short interest across all major U.S. stock exchanges is a good list to watch and stay updated on. The below companies have the highest percentage of their share float
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Ray Dalio designed a portfolio asset allocation that is built to be able to weather economic storms, manage risk exposure, and create positive returns over the long term. It is designed not to just maximize gains but to also diversify risk and create steady returns through all market environments. Dalio calls it the All Weather
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This post is found as chapter 2 in my newest book The Ultimate Guide to Swing Trading available on Amazon. Swing trading can be a good fit for people of all experience levels because it has many benefits over other trading methods. Let’s consider the three major categories of any trading method, psychology, risk management,
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Legendary trader Paul Tudor Jones is one of the best money managers of his generation for both consistent returns and minimal drawdowns. He had no losing years in his primary fund over multiple decades, which is unheard of in the industry. PTJ more than doubled his assets under management during the Black Monday Crash of
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FAAMG is the acronym for what is thought to be the ideal big tech portfolio that contains the best performing stocks in the market. It was first coined by Goldman Sachs but it is a derivative of the FANG portfolio created originally by Jim Cramer consisting of Facebook, Amazon, Netflix, and Google. The FAAMG portfolio
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Sturgeon’s law states “Ninety percent of everything is crap.” The saying came from the science fiction writer Theodore Sturgeon. Sturgeon came to the conclusion that even though science fiction was criticized at the time (1951) for its low quality it was true for all fields. The majority of work in all professions were also low
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What is a covered call ETF? A covered call ETF is actively-managed to buy a stock index or individual stocks to use to write out-of-the-money call options on. They systematically use the covered call-option writing process to create returns through both capital gains on the held assets along with option premium from short call options.
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The Golden Butterfly portfolio is constructed to perform at or above the same high return level of the stock market as a whole with less volatility over the long term. The Golden Butterfly combines the best dynamics of other equity and bond asset allocations into a steady and safe investment strategy for both capital preservation
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The $NYMO ticker is the McClellan Oscillator that is ratio adjusted for the end of the day. The McClellan Oscillator ($NYMO) is a technical market breadth indicator that is calculated based on the variance between the number of advancing and declining stocks on the New York Stock Exchange. This technical indicator is used to show
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