The Importance of the Money Flow Index (MFI)

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The Most Important Concept in Technical Analysis

The trend is the most important concept in technical analysis.

Its strength or weakness can dictate the overall direction of your favorite stock or index.  Potential uptrends can be characterized by a series of higher highs.  Potential downtrends can be characterized by lower lows.

Look at the NASDAQ Biotech ETF (IBB), for example.

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How the Relative Strength Indicator Can Give You an Edge

Traders are often told to buy excessive fear or greed.

Unfortunately, many of those traders aren’t aware of when to pull the trigger, or realize when fear or greed have gotten way out of control. Then, when they finally do decide to make the trade, the stock has already begun to pivot.

And more often than not, they miss the profit opportunity.

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Gap Trading Basics

All of a sudden, there’s a gap in the chart of your favorite stock.

Surprise news, earnings, something unexpected caused a bout of extreme optimism or pessimism that resulted in the move.

 

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What Flags and Pennants are Essential

Trying to figure out why traders are selling or buying can be tough.

But once you begin to understand charting, you’re literally looking at a consolidated view of the very forces of supply and demand – the two key forces that drive stocks. 

Understand that, and you’re one step ahead of the herd.

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Trading Playbook: 13 Questions to Always Ask

Success is not always a guarantee.  But if you have a plan in place, you increase your odds significantly.

You see it’s not about having the “perfect” strategy. 

It’s about the rule you abide by with each trade.  Any one can trade a stock.  But it’s takes a disciplined trader to trade that stock well.  One of the biggest issues facing all walks of traders is a severe lack of discipline and structure in stock buying habits. 

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Two of the Greatest Momentum Oscillators

Fear and greed are the greatest tools a trader can use.

If I spot fear raging out of control in a stock, I want to know exactly when that fear is likely to dissipate. Or, if I find a trade where buyers are tripping over one another with greed, I want to be aware of it.  That’s because if I can spot where either is out of control, the easier it is for me to make money. 

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The Best Time to Enter a Trade

“Opportunity is missed by most people because it is dressed in overalls and looks like work.”

Those very words of Thomas Edison still hold true today.

But rest assured, that’s a mistake – a potentially costly one that’s cost investors millions, especially when they overlook game-changing opportunities.

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Will the U.S. Dollar Ever Rebound?

One of the most difficult questions to answer is when the U.S. dollar could rebound. 

On the heels of President Trump’s strong dollar comments, lower inflation, failure to repeal Obama Care, and a very real possibility of no more rate hikes in 2017, no one had much of an answer for quite some time.

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Three of the Oddest Candlesticks to Trade

When new traders first hear about candlesticks like dark cloud cover, evening stars, shooting stars, white soldiers, three black crows or even the abandoned baby bottom, the ADD kicks in and they’re completely lost.

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The Importance of Confirmation to Identify Setups

When it comes to technical analysis, laziness leads to loss.

It doesn’t matter how oversold your relative strength (RSI) indicator may be, for example, if you fail to confirm it, you could set yourself up for a loss.

There’s an easy way to fix it, though.  For one, don’t rely on just the RSI. Look for confirmation.

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What the VIX tells us Below 10

Wall Street’s “fear gauge” plummeted to a 24-year low of 9.31 in late July 2017, stoking concerns that traders had become far too complacent.

While many don't pay attention to such a gauge, as markets rally, it’s well worth paying attention to. You see each time the VIX has closed below 10, we’ve seen big spikes in volatility shortly after. In fact, the last time the VIX closed under 10 in late June 2017, the VIX exploded from a low of 9.75 to 13 in days, resulting in a pullback in major indices.

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Technical Analysis 101: Triple Tops and Bottoms

Fear and greed dictate just about everything.

And if we can spot where either has become overdone, it can present opportunities.

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