In the previous post, we discussed that when IV is relatively low (option is cheap) and is expected to rise, we should buy options (i.e. consider options strategies that allow us to be an option buyer).On the other hand, when IV is relatively high (option is expensive) and is expected to drop, we should sell options (i.e. consider options strategies that allow us to be an option seller).However, often we’d like buy options despite the relatively high IV (i.e. options is considered expensive).For example, for myself, I like playing directional swing...
Sunday, April 27, 2008
Saturday, April 19, 2008
Some Trading Wise Words
I found quite a number of good trading quotes from Trading & Motivational Quotes blog.I think this blog tries to compile the words of wisdom or trading principles from many sources or books.You can check it out on you own for the whole collections.Here are some of the quotes from that site that I really like and I hope it can be useful for my readers:Turtle Trading PrincipleTrade with an edge, manage risk, be consistent, and keep it simple.The entire Turtle training, and indeed the basis of all successful trading, can be summed up in these...
Friday, April 11, 2008
Follow Your Trading System
Previously, we have discussed the important components of a trading system.When you have built or found a trading system that suits you, it is recommended that you test the trading system through paper / virtual trading before you trade it using real money.Once you’ve had a proven & tested, profitable trading system, you yourself & your discipline will be the key determinant whether the system will be a success and a failure. Successful traders...
Tuesday, April 1, 2008
TWEEZER BOTTOM VS. TWEEZER TOP
Both Tweezer Bottom & Tweezer Top are reversal patterns.Whether a pattern is bearish or bullish reversal, it depends upon whether it appears at the end of a downtrend (Tweezer Bottom) or an uptrend (Tweezer Top).A Tweezer pattern forms when two or more candlesticks touch the same bottom / low price (for Tweezer Bottom) or the same top / high price (for Tweezer Top).In standard technical analysis, this pattern can be comparable to the Double Bottom...
