The hammer is the name used for a single candlestick chart pattern that is a bullish reversal signal. Its name comes from the fact that it visually looks like a hammer. As the short body of the candle is on top of a long wick (shadow). Many traders believe for it to be valid the […]
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Backtesting is the process of applying entry and exit signals to time periods of past historical price data to quantify through an equity curve whether the system would have lead to overall profits in the past. A backtest is a look back at how a quantified trading system would have performed in the past. While
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In options trading, a debit spread or net debit spread play is created when a trader both buys an option with a higher premium and sells an option with a premium that is lower in price at the same time. The debit spread option play is when the value of options bought is greater than
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A hanging man is one kind of bearish reversal candlestick pattern. The hanging man is the name of a signal candle that is located inside an uptrend of higher highs and higher lows in price on a chart. The hanging man candle has a lower wick (shadow) that is longer than the body which is
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The fear and greed index was created by CNNMoney as an indicator to quantify the degree of emotions that investors are feeling about buying stocks in the current moment. This index tries to give a measurement of the market sentiment on a scale of fear and greed. Fear generally takes place during downtrends and market
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A trailing stop loss is a risk management tool for locking in profits on a winning trade. While a trade may start out with a stop loss after the initial entry to exit if the trade does not go in the right direction but instead goes low enough to show that a trade is wrong.
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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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