This is a guest post by Beatrix Potter. Every Must-Read Psychology Book Every Trader Needs to Read At Least Once Whether you’re just starting out as a trader in the financial world, or you’ve been in the industry for some time, and you’re trying to figure out how to enhance your mindset and keep your […]
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A candlestick is a type of chart used in trading as a visual representation of past and current price action in specified timeframes. Depending on the timeframe of the chart each candlestick consists of each minute, day, week, or month trading range represented in a single candle. A candlestick consists of the ‘body’ with an
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The three white soldiers is a very bullish chart pattern that is created with candlesticks when there are three big candles formed in a row with higher highs and higher lows in a row. This pattern needs three data points across a timeframe to signal momentum and a high probability that a market will shift
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This is a Guest Post by Jake @TrendSpider. In this blog post, make sure to check out the top 5 TrendSpider charts posted this week on social media as well as the weekend video going over the broad markets and case studies from last week! Tune for “Coffee and Charts” Saturday morning at 11:00 AM
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A pivot point is a specific price level calculated and then used as a technical analysis indicator and trend filter in a chart’s time frame. A charts pivot point level is the average of the high prices, low prices, and closing prices from the last trading day. Price trading above a pivot point signals a
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Charts are visual representations of the prices where buyers and sellers agreed to trade over at different periods of time in the past. In markets there is a buyer and seller for every trade execution, a stock quote is the price where the buyer and seller agreed and made a transaction. Buyers and sellers are
A reverse conversion option play is a type of arbitrage trade used to make money from selling the option premium of a put option that is priced too high but is structured in a way that profits regardless of the following price action of the underlying stock. This option play is created by opening three
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A bearish credit spread refers to an option play constructed so the value of the spread position increases if the price of the underlying stock falls. A bearish credit spread is constructed with two call options. A bear call spread or credit call spread is an option play that is one kind of vertical spread. A bear call spread
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In trading Delta hedging is a way to structure an option play to decrease or even eliminate the directional risk exposure of a stock holding or other option contracts. Stocks and options have directional exposure to a move in the market price, this is called Delta which is reflected by how much money a position
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A put option contract gives the buyer of the contract the right to sell the underlying asset at the strike price of the put on the day of expiration and assignment. When writing a put option you create a ‘sell to open’ order with your option broker. This is how you sell put options short
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This is a guest post by Jake @TrendSpider. In this blog post, make sure to check out the top 5 TrendSpider charts posted this week on social media as well as the weekend video going over the broad markets and case studies from last week! Happy Memorial Day!
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The profit factor for a trader or trading system is determined by taking the gross profit of winning trades and dividing it by the gross losses from the trades that lost money for a chosen sample size. This formula considers the cost of slippage, fees, and any commissions paid. The profit factor can be defined
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The VWAP (volume-weighted average price) is the ratio of the value of shares traded to total volume that is traded over a specific time period on a chart. It measures and quantifies the average price a stock is traded at for set period of time to create a technical indicator on a chart. VWAP is
This is a content Guest Post by Forex trader Austin Silver. Here is a Forex cheat sheet on how to count pips, the power of 15 pips, how to count Forex profits, and how to define lot size. You can follow Austin Silver on Twitter and Instagram and check out his website at https://taplink.cc/austinsilverfx.
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Chart courtesy of ChartPattern.com The parabolic curve chart pattern is one of the strongest uptrend patterns a stock can have. This type of pattern goes up the farthest and the fastest as it is under the strongest accumulation and every small pullback is bought by eager traders and investors. The parabolic curve is named after
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Transductive reasoning is a type of flawed logic that is most commonly used by very young children to connect meaning between events where there is no correlation. With adulthood it takes the form of superstition or being fooled by randomness. Transductive reasoning causes people to think there are connections between events that are not accurate
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Here is an Option Greeks cheat sheet you can use as a quick reference guide. For those not familiar with option pricing it can also be an educational guide as well. For more about option Greeks check out my article-> Option Greeks Explained. If you are interested in a deeper dive into options trading my Options 101
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If you are interested in trading options the before you start you need a good understanding of what determines the contract price. Understanding what factors determine an options value and how the contract price moves in correlation with the underlying stock is the first step before you start to trade them. Not understanding what can
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A fiat currency is a type of money that has no intrinsic value and can’t be exchanged for any physical commodity or good. A fiat currency is usually created inside a national economy and is legal tender for the buying and selling of goods and as payment for all debts both public and private inside
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The biggest difference between having a cash account or a margin account with your broker for trading and investing is the ability to leverage your available capital. If you have a cash account, you will be transacting any trades or investments with the cash in that account by the settlement date. Cash accounts simply allow you
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