Daily Options Report: Volatility Chart Du Jour, BIDU and More BIDUTrader Feed: Seven (Questionable) Things I Hear From TradersKevin’s Market Blog: Reverse Divergence...What Is It?Afraid To Trade: Idealized Trades During a Trend DayTrader Psychology: Good Boy!VIX and More: A Dozen Things My Trading Accounts Are Thankful For This YearD.R. Barton, Jr.: Learning from My Own MistakeOptions Trading Daybook: Review of My Options Trading Mista...
Friday, November 30, 2007
Wednesday, November 28, 2007
SYMMETRICAL TRIANGLE PATTERN – Part 1: Formation
Symmetrical Triangle is a neutral pattern that normally forms during a trend (either uptrend or downtrend) as a continuation / consolidation pattern. The breakout usually occurs in the same direction as the existing trend.The Formation of Symmetrical Triangle PatternSymmetrical Triangle Pattern contains at least two lower highs (peaks) and two higher lows (troughs). When the peak as well as trough points are connected by separate lines and then extended...
Monday, November 26, 2007
DESCENDING TRIANGLE PATTERN – Part 2: Important Characteristics
Go back to Part 1: Descending Triangle Formation.Important Characteristics of Descending TriangleExisting Trend:There should be an established existing trend (normally downtrend) in order for the pattern to qualify as a continuation patternShape of Descending Triangle:* There should be at least two equal troughs (lows) forming a horizontal lower line, and two successively lower peaks (highs) forming a descending upper line that converges on the lower line as it slopes downward (If both lines were extended right).* There should be some distance...
Wednesday, November 21, 2007
DESCENDING TRIANGLE PATTERN – Part 1: Formation
Descending Triangle is a bearish pattern that normally forms in the midst of a downtrend as a continuation / consolidation pattern.However, sometimes this pattern may also be found at the top of an uptrend, signaling a potential reversal of trend.The Formation of Descending TriangleDescending Triangle has a decreasing (downward sloping) upper line and a flat / horizontal lower line, forming a pattern that looks like a flat-bottom triangle.In this...
Monday, November 19, 2007
ASCENDING TRIANGLE PATTERN – Part 2: Important Characteristics
Go back to Part 1: Ascending Triangle FormationImportant Characteristics of Ascending Triangle PatternExisting Trend:There should be an established existing trend (normally uptrend) in order for the pattern to qualify as a continuation pattern.Shape of Ascending Triangle:* There should be at least two equal peaks (highs) forming a horizontal upper line, and two successively higher troughs (lows) forming an ascending lower line that converges on the upper line as it slopes upward.* There should be some distance between the two peaks as well as the...
Friday, November 16, 2007
Reading Links
Daily Options Report: More PinsDaily Options Report: Expiration StationDaily Options Report: Whatever Happened To....VIX Options?Daily Options Report: New Volatility IndexTrader Feed: Gauging the Extent of Market Moves and an Indicator UpdateTrader Feed: A Look at Some Stock Market Indicators and What They're SayingTrader Feed: Six Positive Trading BehaviorsStock Bandit: Overcoming Trading DisastersStock Bandit: Safety Nets for TradingAfraid To Trade: Five Quick Facts about Moving AveragesAfraid To Trade: Perfect Flag ExampleA Trade A Day: Trading...
Wednesday, November 14, 2007
ASCENDING TRIANGLE PATTERN – Part 1: Formation
Ascending Triangle is a bullish pattern that normally forms in the midst of an uptrend as a continuation / consolidation pattern.However, sometimes this pattern may also be found at the bottom of a downtrend, signaling a potential reversal of trend.The Formation of Ascending TriangleAscending Triangle has a flat / horizontal upper line and an ascending (upward sloping) lower line, forming a pattern that looks like a flat-top triangle.In this case,...
Monday, November 12, 2007
Chart Patterns – Introduction
What Is Chart Patterns?Chart Patterns provide a complete, concise pictorial documentation of all buying and selling (supply and demand) forces.Chart Patterns allow investors / traders to analyze the battle between bulls (buyers) & bears (sellers) and help determine who win the battle, so that they can position themselves accordingly.Why Chart Patterns Can Help In Trading / Investing?Because price patterns form as a result of market psychology.Although a chart only presents stock prices & volume, it actually reflects human behavior, psychology...
Friday, November 9, 2007
Technical Analysis – Definition & Assumptions
Many investors / traders use Technical Analysis to help them in their entry & exit strategies. Ideally, Technical Analysis should be used hand in hand with Fundamental Analysis, as the two methods have their own pros & cons.However, some people argue that for short term trading (e.g. day trading, 1 – 5 days swing trading), Fundamental Analysis may not be as critical as that for longer term trading / investing.The following would discuss further what Technical Analysis is and its basic assumptions.What Is Technical Analysis?Technical Analysis...
Tuesday, November 6, 2007
Example On How Implied Volatility (IV) Affects Option’s Price Significantly
As discussed earlier, in options trading, Implied Volatility (IV) has a considerable impact on an option’s price. An option’s price can go up or down due to changes in IV, although there is no change in the stock price. Some times, for instance, we also find a stock price has increased, yet the Call option of the stock did not increased, but it dropped instead.Now, let’s see a simple example on how IV affects an option’s price considerably.In the prior post, it’s shown that IV will normally begin to rise starting from a few weeks before the announcement...
Friday, November 2, 2007
Reading Links
Trader Feed: Pivot Level Support and Resistance: How Often Do We Hit Those Price Targets?Trader Feed: Opening Price Gaps and Reversions to Average Trading Prices: More Intraday Stock Market PatternsVan K. Tharp: People Think It’s All About Prediction But It Is NOT!Van K. Tharp: Self-Sabotage RevealedA Trade A Day: How I Use Trading VolumeKevin's Market Blog: The Head And Shoulders Reversal PatternHave a great weekend ahead!...
