Working on Exit Skills
[dc]O[/dc]ne of the challenges developing traders face is learning to manage positions effectively. Think about it for a minute—how many books do you know that show patterns and setups for…
[dc]O[/dc]ne of the challenges developing traders face is learning to manage positions effectively. Think about it for a minute—how many books do you know that show patterns and setups for…
The bear flag is a pattern that plays out in all markets, though it tends to resolve less clearly (i.e., with more fakeouts and false breakouts) in currencies. Why? I'm…
Volatility contraction is an important element of market action. Essentially, when a market has been quiet for a period of time, there is a higher chance of breakout trades working,…
Reader Greg asks this question: [dc]R[/dc]egarding your Chart of the day: Bullish Pattern in Aud/Jpy, which as you predicted broke out to the upside. My question is simple...why did you…
Two things to note on this chart of Corn futures: 1) The clean failure test above the summer's highs, followed by a sharp selloff to the bottom of the range.…
[dc]R[/dc]eader Jayram asks, "Can you tell what is the significance of the blue & red bar coloring in your charts on the blog?" Sure, Jayram. I use various color rules…
Markets alternate between periods of range expansion (usually during trends) and volatility contraction. Breakouts from periods of volatility contraction tend to be strong, and highly directional. This chart pattern in…
This is potentially a very bullish pattern on the AUDJPY, targeting a move into the high 87's over the next several weeks. Trades should be entered on strength above the…
Reader Andre asks two questions in response to my post on the failure test trade: It seems that you do not take in consideration any kind of volume information when…
This video blog is a follow up from this post, and digs into some of the details behind the Failure Test trade in a little more depth.
[dc]I[/dc] want to do a small series of posts looking at some of the most important trading patterns I've used over the years. Rather than go in-depth with multiple examples,…
This is why we have entry triggers. I posted this chart pointing out a bear flag in EL on the day marked with an arrow, suggesting that a good entry…
I tend to believe it's usually counterproductive to do too much in-depth technical analysis on different market cap or sector indexes. Everything is so tightly correlated anyway, so differences often…
[dc]O[/dc]ne of the main challenges for stock traders is understanding the ebb and flow of the broad market on the shortest timeframes. There is so much noise in price movement…
The daily chart of Estee Lauder Companies Inc (NYSE: EL) shows a clear bear flag, which sets up a potential trade on any breakdown. Note that this is only a…
[dc]W[/dc]hen trying to master any complex subject, it can be helpful to reduce things, as much as possible, to basic elements. Price movements in markets are very complex; so many…