We have survived this ‘heavily ladened’ week of economic reports, and the S&P along with the Dow Jones have made new lifetime highs. Such action is impressive when reports indicate that first quarter GDP grew at 0.6%, or the worst reading since 2002. We still have one trading day ahead of us before the weekend….
Dr. Steenbarger at TraderFeed posted a set-up (post:Â Idenfitying Transitional Structures) using volume, momentum extremes, and the NYSE TICK readings to identify possible exhaustion and reversal points in daily price action which can be very helpful for day-traders (and even swing traders looking to enter a position at momentum extremes/reversal points). It is recommended reading…
TraderMike recently linked to a great, short post from Wade Meredith on cognitive errors entitled “26 Reasons What You Think is Right is Wrong” and includes such known biases as the bandwagon effect, confirmation bias, loss aversion, outcome bias (etc) and provides a Wiki (encyclopedia) link for each cognitive bias. It’s a great resource and…
For you pure day-traders and even swing traders, I know you check the upcoming economic calendar and key earnings releases daily, but be aware that this upcoming (shortened) week, we have a lot of potentially major market moving data hitting us all at once which calls for extra caution. Check out the article “Wall Street…
In case you’re wondering why we endure the sometimes stressful daily grind that is trading, Dr. Steenbarger recently published four encouraging quotes from his recent texts in his post The Heroic Dimensions of Trading. Read them over and meditate over them if they speak to you. It helps to envision your trading as something greater…
I am really getting a lot out of Dr. Bruce Hong’s new site on Trader Psychology. Here are three detailed posts (containing a six-step process) to help you break your bad habits: How do Addicts Break Habits? Bad Habit Breaking Part I Habit Breaking Part II Dr. Hong is addressing specific topics using academic biological/behavioral…
Here are some daily charts of recent market action from a momentum-divergence standpoint: Momentum is diverging, as buying pressure appears to be subsiding. Market is pulling back to possible support at the rising 20 period MA (has it already found support?) Chart is extremely bullish Resistance (three ‘scraping’ candles) at round number 13,600. If surpassed,…
Analyzing financial stocks can be helpful in determining trends in the broad market, but I also like to highlight interesting chart patterns or situations. Regions Financial (RF) has been swinging in a tight yet relatively predictable swing trading range over the last year and neither has upside or downside momentum. Most financial stocks provide comfortable…
Investors certainly are skittish lately. One of the biggest drags on the economy – many economists say – is the declining housing market and its effects on the American consumer. With stock prices still advancing, bad economic news has had little effect on the general market, at least not to the extent expected. We recently…
As mentioned in previous posts, you don’t have to be right to make money. In fact, the need to be right can actually cost you money! If you find yourself frustrated by incorrectly guessing the market or a stock’s direction, give up! No, I don’t mean quit trading. Try a different strategy. Stop trying to…