How the Relative Strength Indicator Can Give You an Edge

Williams’ %R: One of the Most Essential Technical Indicators

One of the best ways to become a great trader is to try new things.

Unfortunately, there’s no such thing as a perfect strategy. But if you’re willing to trade outside of the box, you can become a better trader.

An Easy Way to Spot Pivots in Stocks

One of the best ways to make money on the Street is by spotting excessive bouts of fear and greed. 

In fact, that’s how some of the most famous investors made their money.

In short, they were buying when others were scared, and selling when others got too greedy. They were exploiting the very psychology of herd mentality.

And we can do much of the same.

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.

How to Use the Parabolic Stop and Reverse (SAR) Indicator in Your Trading

The Parabolic Stop and Reverse (SAR), commonly known as Parabolic SAR is a trend following indicator that highlights current price direction.

It also provides entry and exit signals as well with dotted lines.

How to Know When a Trend Reversal Is Likely

We have all heard the phrase, "the trend is your friend" and as traders we also know just how amazing profitable it can be trading alongside it as well as how devastating it can be to out accounts when we trade against it. But before we are truly able to spot likely trend reversals, we must be able to spot a trend itself.

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.

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.

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.

Three of the Most Consistent Candlestick Patterns

When Munehia Homma first created candlestick charts in they 1700s, he had no idea it’d change the way we look at stocks 300 years later.

To him, candlestick charting was meant for the rice trade.

He’d record the opening day’s price of rice, the low and the close. And over time, he’d begin to see price patterns in his recordings, mapping out repetitive signals in the price bars. He’d soon give them names, like spinning tops, dojis, and hanging man – candlestick names we still use to this day. The discovery of such patterns helped him successfully predict future direction of rice prices, giving him a significant advantage over other traders.

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.

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.

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. 

How to Spot Pivots in the VIX

It was a rare occurrence we hadn’t seen in 24 years.

The infamous fear gauge – the VIX – fell to an unusual low of less than 10 in May 2017 – something that hasn’t happened since December 1993.  In the single digits, the idea is that all is well.  Calm as resumed.  But it’s at these points when smart investors begin to worry.

The Exact Time to Jump out of Any Trade

It’s not about having the perfect strategy.

It’s about the rule you abide by with each trade. 

One of the biggest issues facing all walks of traders is a severe lack of discipline and structure in stock buying habits. Many fail to use stop losses, or even protect gains with a simple trailing stop loss strategy. Others risk far too much.

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. 

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.