Free bars: little patterns after big moves
Bands or channels are usually set up around some type of moving average. They define what is normal for a market, so excursions outside the bands are potentially interesting. There…
What are the odds? What market stats can and can’t tell us…
I want to share the results of a quick statistical study I did today, and also share a few thoughts about using stats, in general, to shape our trading decisions.…
This week, come and learn about a new trade type: trend termination
This week, in our pattern analysis group, we’re looking at Trend Termination plays. This terminology might be a bit confusing at first. It stems from a system I came up…
Video blog: trade location, in bases or trends?
https://youtu.be/GLNqlHmPErE
A Trading Lesson in Pullbacks
I have found, over the years, solid results from trading a handful of patterns put in the proper context. Perhaps the most useful of those patterns in the pullback, which…
Trading lesson: copper futures
Recent action in copper futures gives us some market lessons. These can be adapted to other markets and timeframes (so if you just trade stocks or currencies, don’t skip over…
AUDUSD: Short-term inflections or trend change?
One of the key challenges for discretionary traders is balancing short-term and longer-term information. Err too far on either side, and bad things will happen: Focus too much on short-term,…
The early bird… gets stopped out a lot
One of the themes I've written on recently is that we need to be careful how we think about trend change and end of trend patterns. I think too much…
Don’t be this guy
Take a look at this picture which I took a few years ago, on a Friday afternoon, on a New York / New Jersey ferry. After a long and stressful…
The trend is your friend, except at the end…
Let's talk about endings today. If we can better understand the patterns that often occur when trends end, we are better equipped to manage risk, place stops, and, in general,…
Slip and slide (along the bands)
Effective trading patterns are usually simple. The more complicated an idea is, the more likely it is the result of trying to fit very random data (i.e., the market) into…
Trading against your bias: how and why
I initiated a short in crude oil back in July, and an astute reader sent me a good question. For many weeks/months I had been operating with the assumption that…
Taming the bear in the Russell 2000
Let me preface this by saying two things: First, I'm bullish on global stocks over even moderately long timeframes. Technicians like to call tops, but I think this bull market…
Video blog: time to buy crude oil?
http://youtu.be/wCUW_KIwxEk A look at current conditions in crude oil, and some general comments on how to fade a trend.
The problem with reversals
One of the curious elements of human psychology is the tendency to fade moves or to try to pick turning points in trends. When I started trading, this was how…
Charts can be hazardous to your health
[dc]I[/dc]'ve seen a lot of charts floating around talking about the "big reversal" in grains, and specifically corn. I think there are a few important lessons here, so allow me…