Showing relative performance: simple charts
Yesterday, I discussed some reasons why traders might want to consider looking at, or trading, the relative performance between markets. Today, let's look at a simple way to display that…
Four reasons to trade spreads
Today I begin a short series of posts looking at the tools and techniques of relative value trading. For some traders, this is intuitive; currencies are always valued relative to…
How to draw trend lines
One of the complaints leveled against technical analysis is that tools are primarily visual and subjective, rather than being true analytical tools. There certainly is some truth to these complaints…
The power of the channel
Trendlines are useful. For the uninitiated, it may seem odd to draw lines on charts and to expect them to work, but what we are actually doing here is to…
What to do when your stop is hit?
This could, perhaps, be the shortest blog post ever. I could simply answer the question with: follow your rules. Get out. But let's dig a little deeper. Before we really…
The most important thing you need to know about commodities
The marketplace is constantly evolving. One of the biggest changes over the past decade is the proliferation of Exchange Traded Products (ETPs) that allow stock traders to trade commodities (and…
Technicals for everyone: overbought / oversold
Continuing from yesterday's post, I wanted to dig a little bit deeper into the idea of what happens when markets go too far, too fast and snap back. This concept…
Technical tools for everyone
If you read much of my work, you will begin to see that applying technical tools takes work; it takes a lot of time and experience to know how to…
Buying the Russell 2000 index
A look at the technical justification and support for a long trade in the Russell 2000 index, or other US indexes.
How to trade pullbacks
I'm starting a short series of posts here on pattern recognition, focusing on simple patterns that I have found useful in actual trading. Some of my readers may have questions…
Moving averages: digging deeper
Ok, so I'll warn you up front: this one's going to be a little bit difficult. The response to my post on the 200 day moving average in the DJIA…
A look at the current market conditions: trades, risks, and opportunities
I thought this was a good time to take a look at current market conditions in US stocks. This is certainly a time when risk, emotions, and volatility are elevated,…
Does the 200 day moving average “work”?
This is one of those technical questions that does not have a quick, simple answer. The best answer is "no, not really, and almost certainly not in the way most…
The line in the sand
Everyone does it. I used to do it too, but I stopped because I realized I looked silly a few months down the road. You've heard the predictions: "if this…
About those small and mid caps…
Everyone is talking about the recent underperformance of small caps (and I've talked about it too!) This underperformance is taken to be a sign of an impending crash, or at…
One step ahead…
The most important factor setting up pullback trades, and a simple framework for market and trend analysis that really works.