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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 […]

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. What we simply want to do is buy an asset when the dots move below the price, and sell or short-sell when the […]

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 […]

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 […]

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 stocks. 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 […]

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. Legendary investors such as Warren Buffett and Peter Lynch agree. Buffett has said he “realized that technical analysis didn’t work when I turned the […]