Financial freedom is achieved when you have created enough wealth and/or cash flowing assets to live on and no longer need to depend on a paycheck as an employee. You are then financially free from a job, a boss, and a company. There are many ways to make a living in the 21st century other […]
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What is Positive Expectancy? The closest a trader can hope to come to a “Holy Grail” of profitable trading is a trading system with a positive expectancy. A trader’s focus should not be on predictions, stock picking, opinions, or being right all the time. The best focus is on creating a quantified system with an
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Unusual options activity can provide insight on what smart money, insiders, and big traders are doing with large volume option orders. Unusual options activity can tip a large traders hand and be a sign that a big bet has been placed for a potential move in price for the underlying stock that has a high probability.
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This is a guest post by Jake @TrendSpider. In this weekend blog post, you will find our “Top 5 TrendSpider Charts This Week”, weekend analysis, and the link the this Sunday’s show! Make sure to check out our Sunday Chart Show this weekend at 6 PM EST with Steve Burns, founder of NewTraderU.com.
Current Chart Patterns on SPY QQQ and IWM Read More »
Technical analysis can be both an art or a science based on how you use it. It is very easy to become too rigid in its practice believing it can become a crystal ball or too flexible and see whatever you want to see. Here are ten common mistakes people make in the practice of
Common Mistakes in Technical Analysis Read More »
The uptick rule stops the short selling of a stock in a sharp downtrend by restricting the ability to sell when a stock is going down in price and only allowing new short selling as a stock is going up in price. To follow the rule a new short sell can only occur at a
What is the Uptick Rule? Read More »
Selling short reverses the process of buying and selling higher. When selling short you borrow shares and sell first hoping to buy back later at a lower price for a profit. Selling short goes against the long term trend in the stock market and has to be done when charts create the best chances that
Best Setups for Shorting Read More »
Larry Williams is a legendary trader and the author of approximately 11 books on trading stocks and commodities. He developed several technical market indicators like the Williams %R, Ultimate Oscillator, COT indices, accumulation/distribution indicators and others to measure cycle forecasts, market sentiment, and also for quantifying the values for commodity prices. He is most famous for winning
Top Larry Williams Trading Quotes Read More »
In options trading a credit spread is an options play where a trader buys one option and sales another option contract of the same stock and expiration but at different strike price levels. This type of option play construction attempts to make a net profit when the price spread between the two different options gets
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The MACD is an abbreviation for the moving average convergence/divergence technical trading indicator and is used in technical analysis to filter the trends, swings, and momentum of price action. It is designed to reveal changes in price strength, direction, momentum, and duration for the moves of trends and swings. The MACD is a simple visual momentum indicator. The
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An equity curve is a visual representation of the trend and variation in the value of an investment or trading account shown on a chart over a specified period of time. An equity curve that has an over all uptrend and is near all time highs usually shows that the investing or trading strategy used is profitable
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Theta is the component inside the options pricing model that measures and values the sensitivity of an option contract price in correlation to the passage of time. The theta value embedded in an option depends on the price of a specific option contract in relation to its expiration date, the current price of the underlying
Options Theta Decay Explained Read More »
This is a guest post by Jake @TrendSpider. In this weekend blog post, you will find our “Top 5 TrendSpider Charts This Week”, weekend analysis, and the link the this Sunday’s show! Make sure to check out our Sunday Chart Show this weekend at 6 PM EST with Ben Bennet, founder of patternprofits.net!
Current Stock Chart Patterns on SPY QQQ and IWM Read More »
Here are five ways to effectively manage risk as an option trader: The first step in managing risk as an option trader is position sizing. When buying options the amount of capital you spend buying an option contract long is the most you can lose if your option expires worthless before expiration. The best way
Risk Management For Options Trading Read More »
The efficient market hypothesis or ‘EMH’ for short is the theory in economics that believes all known information is already reflected in current stock prices. The followers of this hypothesis believe that due to this fact it is not possible to beat buy and hold investing over the long term in returns or even in
The Efficient Market Hypothesis Explained Read More »
Order flow is the process of buyers and sellers trading between one another that causes market prices to stay the same or move up and down. Zooming in on order flow it is the volume bars along with the time and sales information of trades. Order flow is where buyers and sellers meet at an agreed
Price Action vs Order Flow Read More »
Mental models are used as frameworks and filters and a way to think about the world and make the right decisions based on principles. Mental models are not always correct but they can raise your probability of having success with how you think and the decisions you make based on robust principles. Jeff Bezos used
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The Wheel Options Strategy or the Triple Income Strategy is an option play where an option trader tries to profit from a trade on a single stock in three different ways. Step 1 is where the trader sells cash secured put options and collects the premiums on a stock that they wanted to buy at a specific price to
The Wheel Trading Technique Read More »
Insider trading is defined as buying or selling stocks on public exchanges using information that is not publicly known or available to other investors or traders. This happens when people with access or connections to confidential or non-public financial information, news, or facts about a publicly traded company trade based on what they know or share
What Is Insider Trading? Read More »
This is a video guest post by Jake @TrendSpider. Chart Courtesy of TrendSpider.com
Finding An Edge During A Stock Market Crash Read More »