Short Scalp Trade Today – QQQQ: Momentum Divergence
Describes a trade taken today – a short scalp in the QQQQ based on an observed momentum divergence and overhead resistance.
To Over-Conservative Traders – Comments from a Master
In his book Technical Analysis and Stock Market Profits, Richard Schabacker – also known as “The Father of Technical Analysis” – wrote parting comments to naturally conservative or risk averse investors that I wanted to share. Keep in mind, these words were written in the 1920s. He states that most market students need words of…
The “Sweet Spot” in the Data: Trend Beginnings and Playing for Large Targets
Would you like to know the true, statistically tested spot of a new trend in development? Is this the secret to riches?! No, there is no secret, unfortunately, but with this objective model of quantifying trend birth, you’ll be more “in the know” than those who miss this key “Sweet Spot” in the market structure….
The Four Core Types of Trades
Although we all employ different trading strategies across different time frames using different vehicles (stocks, options, futures, etc), there really are a limited number of pure trades we can take and it is helpful to know the major types and when we are employing them in our trading arsenal. The four major types I propose…
The Four Guiding Principles of Market Behavior
From Charles Dow, Robert Rhea, and Richard Schabacker (and others) – early pioneers of stock market technical analysis – four driving principles of market dynamics have endured the test of time and still guide technical trading decisions across all time frames. Each principle can be quantified mathematically and most (if not all) mechanical trading systems…
Psychology of Risk Taking – Foundational Concepts
A key book that helped me address my own fears of trading and risk-taking was a book by trading psychiratrist Ari Kiev: The Psychology of Risk Taking. Kiev worked with many traders through his career, and found the number one problem facing professional traders was that they did not take on enough risk in their…
How do my Emotions Affect Trade Targets?
Have you ever sat down for you nightly analysis and wondered how far a potential trade might go? Although the market is the final arbitor of how much profit a potential trade can make, we can adjust our thinking and emotions to capture either more or less of that potential profit. Once you enter a…
Stop Placement Trade-off: Personal Observations
Ever wonder the exact place to rest your stops? Sadly, there is no exact place and there is no magic formula. Placing your stop involves a trade-off between risk (in dollars) and probability of being triggered. Simply put, the closer your stops are to your entry, the less you risk, but the higher the probability…
Examining the “Right Edge” of the Chart – “What do I do?”
Whatever sparked our initial interest in trading, we all have to answer the same question daily: “What do we do at the edge of the chart?” Even now, that question haunts me after I’ve studied my charts, examined the overall market, and scanned economic news. Even with all that behind me, when the trading day…
The Fear and Recent Decline
Needless to say, there was an overwhelming amount of fear that resonated throughout the market yesterday. Without addressing the specifics or reasoning behind the decline, as have been addressed by news sites and other blogs far superior to my new blog-in-development, I wanted to take a different approach and address some of the emotions of…