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John Murphy's Ten Laws of Technical Trading
Which way is the market moving? How far up or down will it go? And when will it go the other way? These are the basic concerns of the technical analyst. Behind the charts and graphs and mathematical formulas used to analyze market trends are some basic concepts that apply to most of the theories employed by today's technical analysts.
Arthur Hill on Goals, Style and Strategy
Before investing or trading, it is important to develop a strategy or game plan that is consistent with your goals and style. The ultimate goal is to make money (win), but there are many different methods to go about it.
Why Watch Market Indicators?
A common and effective way to gain perspective on stock price fluctuations is to compare the movement of your stocks to that of indices or market indicators. About 100 years ago, as the number of individual stocks grew, the need to measure how the stock market performed became obvious.
Maintain Your Perspective
Every minute more than 150 Million Dollars change hands in the electronic index futures markets like the e-mini S&P and e-mini NQ. You can win or lose thousands of dollars in a few minutes; the futures markets can make you rich in a few weeks or months or wipe out your account with no mercy.
How to Make Money Shorting Stocks in Up and Down Markets
Now I am very much aware that many market players do not like to short stocks. This bias against the short side of the market is totally understandable, especially given the fact that the widespread reluctance is garnered and perpetuated by the various exchanges and the other powers-that-be.
Avoiding Mistakes in Forex Trading
A difficult challenge facing a trader, and particularly those trading e-forex, is finding perspective. Achieving that in markets with regular hours is hard enough, but with forex, where prices are moving 24 hours a day, seven days a week, it is exceptionally laborious.
Momentum Trading
One of the most basic and widely used indicators is that of momentum. Before I go on to tell you how we can use the momentum indicator to trade with, I want to explain the difference between a leading and a lagging indictor.
What Are Commonly Traded Securities
Stocks -- When you buy stocks you essentially own a little share of the company you just bought. The more shares you buy the more of the company you own. When the company whose shares you have bought makes a profit you will receive that profit in the form of dividends.
The Flaw In Our Emotions
As humans we have a natural tendency to try and influence our surroundings and events we take part in. This is one reason as a species we have succeeded but it is also one of the fundamental flaws we all have when trying to achieve success as a trader.
The Trend is Your Friend
We traders have to try to achieve a state of impartiality. We have to accept that we will have losses as readily as we will gains. Reaching a stage where you can comfortably accept losses, in the knowledge that your method of trading will produce profits in the longer term, is the state we have to aspire to. Trading is not an exact science.
Intraday Trading Tactics
In this lesson I want to discuss intraday tactics that you should be aware of when you start to trade intraday. By intraday I mean very short time frames such as 1 minute, 5 minute and 15 minute charts. This will apply to traders who actively trade and probably trade frequently during the course of the day.
Who Trades The Markets
Let's just clarify what is meant by the term trader, sometimes called retail trader or day trader. This is an individual who trades the financial market whatever they may be using their own money. They may or may not be dependent on the results of their trading for their income. This does not include professionals who work for institutions or who manage other people's money.
The Mastery Of Self Trading
We do everything for a reason. The reason behind any act is, for the most part, unconscious. If we want to change a behaviour we need to identify the reason, the underlying objective, and examine it. We need to examine it to determine whether this objective, this assumption, supports us in what we want to do now.
High Low Breakout Technique
This technique can be used for any market that has a decent daily range. If you look at any chart, what do you see? You should see a succession of bars that are doing one of three things.
Understanding Stochastics
The foreign exchange markets move when some force makes one currency either more or less valuable than another. The cumulative purchase and sales of a currency cause it to move up or down and to become more or less valuable in relation to other currencies.
Anticipating the Market and Execution
I divide trading skills into two distinct elements: anticipating the market and execution. The anticipating part is reading the market, whether through charts, systems, technical indicators or intuition. Anticipating/reading the market is the trading skill that most of us focus all our energy on, and it is the subject covered by most trading books and seminars.
Where To Place Your Trading Stop
Many traders have a problem defining where they should place their stop loss. They have no problem entering a trade but often have a problem defining where they should take profits or cut their loses. In this lesson we will cover some of the popular methods of choosing a stop loss.
Option Trading: Thinking "Outside the Box"
Wouldn't it be great if we could buy an option with five months left until expiration and sell an option with 2 months left until expiration for the same price? You couldn't lose. Well we can't. I love options spreads so much I realized something very important. We can buy a spread that has a lot of time value left at almost the same price as we can sell one with less time value left.
What is Simple Moving Average?
This is the most widely used and is simply calculated by adding up a set of values and dividing the total by the number in the set. This is the average. Movement of this average is effected by adding the next new value of the set and subtracting the first value of the set and again dividing by the same number of values in the set being studied.
Day Trading Strategy
A market that is trending up should have higher peaks and higher valleys. The majority of bars should also have higher highs and higher lows. In a down trend the market should have lower valleys and lower peaks and the majority of bars should have lower lows and lower highs.
Stopping Yourself on Forex
I read on a bulletin board a traders comment that on his first outing trading the E-Mini S&P 500 he lost on each of his trades. He noted though, that had he had a wider stop each of his trades would have been profitable and that therefore he would be trading with a wider stop in future.
What is Support and Resistance
It is very important to understand the concept of support and resistance. In up trends, every time price drops to the up trend line and then resume their advance, the trend line has acted as support to the price up trend. Support can also be found at prices of previous support or resistance.
What is Moving Averages
A market that is trending up should have higher peaks and higher valleys. The majority of bars should also have higher highs and higher lows. In a down trend the market should have lower valleys and lower peaks and the majority of bars should have lower lows and lower highs.
Exiting a Losing Trade
A market that is trending up should have higher peaks and higher valleys. The majority of bars should also have higher highs and higher lows. In a down trend the market should have lower valleys and lower peaks and the majority of bars should have lower lows and lower highs.
Forex Bid/Offer
Normally when you look at your charts you only see one price and that price is the bid price. Some types of charting software are capable of displaying the offer price but most commonly the price you see is the bid price.
Yin and the Yang of Markets
I am reading a fantastic book on trading, first published in 1924, by Richard D. Wyckoff, titled 'How I Trade and Invest in Stocks & Bonds'. Although most of the examples in the book pertain to stocks, the insights into the nature of trading are relevant no matter what instrument you choose to trade.
Why Does Technical Analysis Work?
Technical analysis describes different ways of predicting the future of the stock/futures market based on its history. Unfortunately, technical analysis is not an exact science. Many prominent scientists label it as "voodoo science".
Understanding Forex Trends
Trend is the easiest and the most difficult thing to understand. The difficulty arises because of the time factor. Whenever we talk of trend it has to be related to the context of time.
Profitable Trades for Beginner
Once you are in a profitable trade, the next challenge becomes when to take profit. Optimizing profits is the other main aim of trading, besides limiting losses.
Building a Forex Trading System
About two weeks ago I got an email from a trader explaining his trading method and asking me for some advice on how to improve on it. On the surface of it, there wasn't much to his approach but he had been trading profitably for a few years and that got me interested.
Forex Envelopes
What we are going to show here is the use of Envelopes, which form trading bands. The particular trading bands we are going to use will be based on exponential moving averages. This will help us form a method to trade. This is basically an intraday strategy, which works well on the 10min/15min time frame.
Change Over Days - Day Trading
I read somewhere that when Michael Jordan was making an advert that required him to miss the basketball hoop a number of times; he just couldn't do it, he couldn't not get the ball in the hoop.
The Basics of Currency Trading
Currency, like other commodities, are traded in futures contracts. Simply, these are contracts to deliver a fixed amount of a particular currency, in a given month in the future, at a price agreed upon and paid for today.
How to Choose an Online Forex Firm
Forex is a special kind of the world financial market. Trader's purpose on the Forex to get profit as the result of foreign currencies purchase and sale. But, what to look for in an online Forex Firm:
The "M" And "W" Trading Pattern
The "M" and "W" trading pattern is a great little pattern that occurs with enough frequency for you to add it to your trading tool bag.
Forex Pip Auction Game Problem
Here are 4 fail-proof ways to solve the Pip Auction Game problem, and to guarantee that you're not going to play it again. You have heard this before, and it's true, but until now you still have not lived by this rule. You should never risk more for pips than they are worth. You should cut your losses short.
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