Three of the Most Powerful Technical Pivot Indicators

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Gap Trading Fundamentals

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.

Look at Palo Alto Networks (PANW), for example.  In early June 2017, shares closed at $118.59.  However, shortly after the close, news of a massive cyber attack began hitting headlines.  Orders come flooding in overnight.  The next day, the stock opens at $140.

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How to Use Full Stochastics in Your Trading

Fear can destroy a stock in seconds.

But it can also lead to quite a bit of opportunity.

Look at Coca-Cola (KO), for example in late February 2019. 

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Price Expansion and Retraction: The Rubber Band Effect

If you pull a rubber band too far, too fast, what happens?

It snaps back, right?  The same thing happens with stocks, indexes, and currencies.  If they’re pulled too far in one direction, eventually they’ll snap back and revert to back to the mean.  In fact, we see it happen all the time.

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Boeing (BA): How to Successfully Trade a Falling Knife

Boeing was the top stock to avoid in early March 2019, and share prices continued to fall through the end of the year.

The stock had just fallen more than 35 points in two days on news that an Ethiopian Airlines flight crashed, sadly leaving no survivors. That came just comes after another deadly crash involving the same model in Indonesia, which also left no survivors after five months ago.

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The Two-Step Process to Uncovering Value after a Pullback

Why would I want to touch a stock that just plummeted?”

My answer, “Why not?”

What many traders don’t understand is that many pullbacks create opportunities, especially when it happens to a well-known stock. 

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How to Use the Chande Trend Meter (CTM) with 80% Success

Unbelievably, technical analysis is still written off as useless.

In fact, some denounce it as a laughable study of charts, patterns, and squiggly lines without any concrete or profitable results. Others argue it’s only good for short-term trading.

However, none of that is true.

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Using Multiple Time Frames to Get the Big Picture

One of the best ways to lose money on any trade is to ignore multiple time frames.

For example, if I just rely on a six-month time frame, I miss the bigger picture trend that a one-year, two-year, and even a five-year time frame can offer. Looking at a six-month chart of the iShares NASDAQ Biotech ETF (IBB), it’s tough to gauge anything. It’s full of “noise” and not a lot of direction.

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How to Identify Flag and Pennant Setups

Once you begin to understand technical analysis, you’re literally looking at a consolidated view of the very forces of supply and demand – the two key forces that drive markets. 

We’ve already discussed some of the most powerful and most used patterns, like Bollinger Bands, Fibonacci retracements, relative strength, head and shoulder patterns, breakouts, and even how to use candlesticks.

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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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Always Look for Agreement with These Technical Indicators

I love when traders tell me technical analysis doesn’t work. 

While they’re entitled to be wrong, the fact remains that technical analysis does work, sometimes by up to 80% of the time. Granted, there is no Holy Grail, but if we use the right indicators, we increase our odds of success. Especially if we apply those indicators to well known stocks that may only be down temporarily.

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Why it Pays to Use these 4 Key Technical Tools

Sometimes, simplicity is the best way to spot opportunity.

In early August 2018, shares of Weight Watchers (WTW) plunged $12 unexpectedly on an earnings overreaction. But the news really wasn’t worthy of such a gap lower.

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The Easiest Way to Spot Options Opportunities

We’re often told to “Never buy a stock hitting a 52-week low.”

“Stocks in downtrends tend to stay in downtrends.”

“Any stock hitting a 52-week low will always be weak.”

Or, “nothing is more destructive to amateur investors than thinking that a stock trading near a 52-week low is a good buy.”

However, none of that is true. 

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Technical Education 101: Channel Trading

When it comes to technical analysis, there are thousands of patterns to watch for, decipher and understand along the way. 

They’re not so tough to understand. 

In fact, one of the easiest ones to understand is the channel, defined as two parallel trend lines within a tight trading range.  The upper line connects the price peaks in the channel while the lower line connects the price lows. 

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Trading the J-Hook Continuation Pattern

Technical analysts attempt to predict direction by studying past price action and charts. And understandably, there are critics. In fact, some see it a pseudo-nonsense. 

Forbes for example says it’s fundamentally flawed.

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The Magic of Moving Average Crossovers

By now, you’re well aware of how to find trends using simple moving averages, such as the 50- and 200-day moving averages.   But you should also know how to potentially spot when a trend could stop dead in its tracks, or birth a new trend.

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Two of the Best “End of Year” Opportunities

It’s time to think about year-end strategies.

We already know:

  • The first half of the year tends to bring better returns that the second half.
  • Dow Jones Industrial Average stocks whose price was beaten down in the previous year has a tendency to outperform the rest of the DJIA in the following year.
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