Trend lines are the identifiers and connectors of resistance and support in chart patterns. Trend lines are ways to measure and quantify the path of least resistance for a chart in your time frame. Trend lines are identifiers of the trend in your trading time frame. Vertical trend lines must be drawn from left to […]
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In trading as in life there are both risks and rewards to consider before you start any journey. You have to ask yourself are the risks of loss worth the possibility of the gains from the rewards. In trading your risk is created on entry by a combination of your position sizing and stop loss if
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The goal of a trend following system is to capture trends for big profits and cut losses short. A trend follower needs a diversified list of assets to trade in different markets to always have the opportunity to capture a trend where ever it happens. A good trend following system will have backtested signals on
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The 50 day moving average is the current resistance on the $SPY chart. The $295 price level has also acted as strong resistance. Current support is the $282.50 price level. RSI is neutral but slightly bullish at 52.19. MACD currently has a bullish crossover. The Average True Range declined late last week to 4.19. The
The Support and Resistance Levels on the $SPY Chart: 9/1/19 Read More »
This is a Guest Post by Jake @TrendSpider. In this weekend’s analysis, we take a look at the broad market ETF’s SPY, QQQ, and Bitcoin. In this update, we take a look at how the monthly candles closed for August and what the month of September will start with. Make sure to set your alerts on
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“ I always laugh at people who say “I’ve never met a rich technician” I love that! Its such an arrogant, nonsensical response. I used fundamentals for 9 years and got rich as a technician.” – Marty Schwartz Many people believe technical analysis is complete silliness. How can someone make money on lines and patterns
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“Predictive technical analysis is chart/pattern reading. Trend following, on the other hand, is reactive technical analysis – a diversified portfolio perspective of markets using momentum indicators.” – Michael Covel Trend following is a trading strategy which attempts to profit from long-term or short-term moves in price action that happen at times in financial markets. Trend
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What is the best back tested trading strategies with moving averages? What is the best specific moving average signal for capturing stock market trends? After trading and backtesting data for years over the past 20 years of data I have an answer. I discovered one moving average crossover on the daily chart that backtested the
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I have primarily used candlesticks on my own charts for over a decade. I like them for how they visually represent prices and quickly show the contrast of the open, close and daily range. I studied how best to use them inside a trading system as confirmation of my existing signals. I was very happy when a
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Bollinger Bands are a technical indicator created by John Bollinger in the 1980s. They were created to form a quantified visual trading range that was adaptive to dynamic volatility expansion and contraction. “Bollinger Bands are use a measure of central tendency as a base such as a moving average. They curves drawn in and around
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Here is an example of a simple moving average crossover strategy that beats buy and hold investing. This strategy combines two winning strategies, the golden cross 50/200 day and the stand alone price over the 200 day moving average system. These are both end of day signals based on the daily chart. Entry conditions: You go
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The current chart is currently driven by headline risk but does have technical levels to watch. $SPY price remains over the 200 day moving average. This moving average is a long term bullish trend signal. The 10 day moving average crossed under the 50 day moving average this is a bearish signal in the short
Two Signals to Watch on the $SPY Chart: 8/25/19 Read More »
This is a Guest Post by Jake @TrendSpider. In this weekend’s analysis, we take a look at the broad market ETFs, SPY and QQQ, as well as Bitcoin. In this update, we take a look at how the longer term areas of support are still in play into next week. Make sure to set your alerts
The Key Trading Ranges on the $SPY and $QQQ Charts Read More »
Moving averages are the best indicators for the direction of a trend because of their power and simplicity to smooth out price direction in trend trading. They create lines on your charts to filter out the daily trading ranges and show the true direction a market is going in for a specific time frame. When
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In trading more action and time spent watching screens is not necessarily rewarded with more profits. The majority of the time trading every day and watching every tick in price is not rewarded by making more money the odds are greater that emotional errors of over activity will be made. Ed Seykota had some of the best annual
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“Trend followers use reactive technical analysis. Instead of trying to predict a market direction, their strategy is to react to the market’s movements whenever they occur. This enables them to focus on the market’s actual moves and not get emotionally involved with trying to predict direction or duration.” -Michael Covel Trading a trend in price
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Chart Courtesy of StockCharts.com Breakouts can be signals based on price breaking and closing above a declining trend line, horizontal trend line, or a close above previous price range resistance. Once a breakout is entered a stop loss can be placed at the low of the bar of the day of the breakout. If it
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Market Wizard Richard Dennis known as the ‘Prince of the Pit’ turned $1,600 into $200 million in 10 years trend trading commodities. What happened when legendary trader Richard Dennis put a want ad in the paper to hire traders? What kind of results would ordinary people have if they were given a winning system and
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No trading strategy works all the time because the market doesn’t stay the same. Markets change from range bound, to trending, and at times become very volatile but go nowhere. Quantified trading signals can be based on different types of price action patterns created in different types of market environments. Trend traders buy high in
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This is a Guest Post by Chuck McCleary @optionsappetite. When the Volatility Index (or VIX) gets above 20, most traders take their foot off the gas due to heightened uncertainty in the markets. But to options traders that sell premium, higher volatility equals more opportunity. Let me explain why. Historically, implied volatility (IV) is always greater
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