MACD (Pronounced Mac-Dee) is the short abbreviation for the moving average convergence/divergence technical indicator. The MACD is a trading indicator used in technical analysis to filter and trade the momentum of price action on a chart. It was created by the late Gerald Appel in the late 1970s as a tool for technical analysts. It […]
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. Option delta is represented as the velocity of a price change in an option with a 1 point move in the underlying asset and is usually
What is Delta in Options? Read More »
To be a profitable trader you need three things: A trading system with an edge. Proper position sizing per trade. The right trading mindset. If you don’t have the right mindset for trading then the other two will not work. Here is a trader cheat sheet of the principles you must understand to create the
Trading Mindset Cheat Sheet Read More »
A self-fulfilling prophecy is a process where an original expectation creates the conditions of its own reality. With a self-fulfilling prophecy expectations and behaviors about a future event cause the result that confirm the original prediction. Some speculate that the reason that price support levels and price resistance levels have meaning is because people believe
Is Technical Analysis a Self Fulfilling Prophecy? Read More »
Gaps on a chart show that there were no buyers and sellers connecting at price levels on a chart. Gaps happen mostly when news comes out that instantly changes prices to much higher or lower prices than they were previously trading at. As the news event is instantly priced in by buyers and sellers a
What is a Gap Fill in Stocks? Read More »
Profitable trading is simply making more money on your winning trades than you lose on your unprofitable trades. Profitable trading is not about being perfect and making money on every trade. It is not about predicting the future, making a great call, or any one big trade, it is all about the math. Here is
Profitable Trading Step by Step Read More »
Who was Warren Buffett’s investment mentor? Warren Buffett was not only in a class that Benjamin Graham taught at Columbia Business School, receiving an A+, but also worked for Mr. Graham after graduation. Buffett was so happy to get the job he didn’t know what he would be making until he got his first paycheck.
Benjamin Graham: Intelligent Investor Summary Read More »
This post is an example of one of the chapters in my new book ‘The Ultimate Guide to Chart Patterns‘. Image by Atanas Matov Chart Facts: The bear flag pattern is a continuation pattern of the previous downtrend. A bear flag chart pattern occurs after a downtrend showing that a new price base failed to
Bear Flag Pattern Explained Read More »
Dr. Michael J. Burry is a well known investor and hedge fund manager of Scion Asset Management, LLC Holdings. He became famous when he was played by Christian Bale in the blockbuster movie ‘The Big Short‘ based on the best selling book by author Michael Lewis. Dr. Burry’s trade that made him a legend was
Current Michael Burry Portfolio 2020 Update Read More »
A bearish engulfing candle forms on a chart when a small body candle is inside the range of the next large down candle which can be black or red depending on chart settings. When a two candle bearish engulfing pattern happens near the top of an uptrending chart or when a chart has an overbought
What is a Bearish Engulfing Candle? Read More »
GMMA stands for the Guppy Multiple Moving Average and it is a technical trend and momentum indicator. The Guppy Indicator was created by Daryl Guppy, a trader out of Australia. It combines several moving averages in different timeframes to get a perspective of price in relation to the movement of the two different groupings of
GMMA: The Guppy Indicator Read More »
An inside candle shows price is trading within the previous range of a time period. An outside candle shows price broke out of the previous range of a time period in both directions. These candlestick patterns can show a trader if a chart is currently trading in a range or breaking out trying to swing
Inside Candle and Outside Candlestick Patterns Read More »
The 3 moving average crossover strategy is a technical trading technique that uses three exponential moving averages of different time lengths to create signals on a chart. The three moving averages we will look at are the 10-day EMA, 30-day EMA, and 50 day EMA. 10-day EMA is the momentum indicator. 30-day EMA is the value
3 Moving Average Crossover Strategy Read More »
How do you backtest a trading strategy even if you can’t code? Use backtesting software that doesn’t require coding, just simple inputs of entry and exit signals for markets you want to see the results for. You don’t need to code you just need access to user friendly backtesting software. In 2020 there is plenty
How To Backtest A Trading Strategy Even If You Can’t Code Read More »
The CCI indicator (commodity channel index) is an oscillator originally created in 1980 by Donald Lambert . He developed CCI originally to identify and quantify cyclical moves in commodity charts, but this technical indicator has also been used on stock indexes, exchange traded funds, stocks and charts of other markets. It can be used as
What is the CCI Indicator? Read More »
I believe the best finance documentaries can be both educational and entertaining. Below is a list of my favorites that I’ve found and watched over the past fifteen years. Some are newer and some are older but they are all great at showing financial information in an informative and engaging way. I enjoyed watching these
Best Finance Documentaries Read More »
A good trader should improve with every trade. The focus for any trader should just be to make the next trade a good trade. Profitable trading comes from stringing together a lot of good trades in a row. A good trade is one that has a good risk/reward ratio on entry when you consider the
Improve With Every Trade Read More »
What are the most used moving averages on charts and in technical analysis? The popularity of specific moving averages on different time frames can give them meaning as more people are watching them for signals. They can be self fulfilling prophecies as buyers and sellers take action as price crosses the line. Overall, simple moving
Most Used Moving Averages Read More »
The Commitments of Traders or COT report is a weekly report created by the Commodity Futures Trading Commission (CFTC) quantifying holdings in the U.S. futures and options contracts by different market participants. It is put together by the CFTC from traders disclosures of market positions and covers the futures on grains, cattle, financials, metals, energy,
What is the COT Report? Read More »
Smart money flow index or smart money index (SMI) is a technical analysis indicator that attempts to show the current market sentiment of investors. The index was created and made popular by Don Hays, who was a money manager. The SMI indicator uses intraday price patterns to measure bullish or bearish sentiment. The SMI indicator
Smart Money Flow Index Formula Read More »