Historical Volatility – Part 2: Formula to Calculate HV

Go back to Part 1: Definition of Historical VolatilityAs mentioned in Part 1, to obtain Historical Volatility, we need to calculate the standard deviation of the price returns using historical data (which can be in terms of daily, weekly, monthly, quarterly or yearly) over a certain period.Commonly, the daily price data for the period of 10 days, 20 days, or 30 days are used.Theoretically, the formula to calculate Historical Volatility (i.e. standard...

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Historical Volatility – Part 1: Definition

Historical Volatility (HV) is a measure of the fluctuations of the stock price (i.e. how volatile the prices had fluctuated) over a certain period of time in the past.Suppose the daily closing prices of Stock X and Y for the past 10 days are shown as follows:As can be seen from the data above, regardless of the direction (up or down), the closing prices of Stock X in the past 10 days have fluctuated / changed by $2 to $5, whereas Stock Y by $1 to...

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More Understanding of HISTORICAL VOLATILITY

In the previous article, we had explained what Historical Volatility is very briefly. In these series, in order to gain better understanding and hence be able to interpret its meaning better, we’ll discuss more in-depth about Historical Volatility. As usual, I’ll try to share my understanding about this topic as simple as possible, so that it’ll be easier to understand for everyone. Click the following link to read each article: 1) Definition of Historical Volatility 2) Formula to calculate HV 3) Steps to calculate HV using MS Excel (with example) 4)...

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Market Analysis Video: This Reliable S&P Formation Could Make You Money

This short video on the S&P 500 is worth watching. It shows a detailed analysis on a particular chart formation that has proven to be very reliable in the past. If the analysis is right, we couldsee a further move and run in the S&P500 to the upside.Check it out!Other Learning Resources:* FREE Trading Educational Videos with Special Feature* FREE Trading Educational Videos: Learn Technical Analysis from Award Winning Author John MurphyRelated Topics:* Understanding HEAD & SHOULDERS BOTTOM Pattern* Options Trading Basic – Part 1* Options...

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THREE BLACK CROWS - Bearish Candlestick Pattern

Three Black Crows (Bearish) Three Black Crows is a top reversal / bearish reversal formation.It could occur at the end of an uptrend, or during a bounce within a downtrend, or at the resistance.This pattern consists of 3 consecutive long black candlesticks that appear in an upward price trend.The opening price of Candles 2 and 3 of the pattern should be higher than the previous day's closing price (i.e. The prices open within the previous day’s body).And...

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One-Cancels-Other (OCO) & One-Cancels-All (OCA) Orders

One-Cancels-Other (OCO) Order is a group of orders that consists of two individual orders; if one of the orders is executed, then the other order will be automatically canceled.One-Cancels-All (OCA) Order is a group of orders that consists of 2 or 3 individual orders. When any one of the orders in the group fulfils a trigger condition, the triggered order will be sent to the market for execution, whereas the other order(s) will be automatically canceled.Basically, One-Cancels-Other (OCO) Order and One-Cancels-All (OCA) Order are similar. The difference...

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FALLING WEDGE PATTERN – Part 2: Important Characteristics

Go back to Part 1: Falling Wedge FormationImportant Characteristics of Falling Wedge PatternExisting Trend:There should be an established existing trend (either uptrend or downtrend). As mentioned before, Falling Wedge, which has a bullish bias, can be categorised as a reversal or continuation pattern.As a reversal pattern, Falling Wedge normally occurs after an established downtrend. The slope of Falling Wedge will be downward, which is in the same direction as the prevailing trend.As a continuation pattern, Falling Wedge occurs after following...

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FALLING WEDGE – Part 1: Formation

Falling Wedge is generally regarded as a bullish pattern. The breakout usually occurs upwards through the wedge and then move on into upward trend.Falling Wedge can be categorised as a reversal or continuation pattern.As a reversal pattern, Falling Wedge normally occurs after an established downtrend. The slope of Falling Wedge will be downward, which is in the same direction as the prevailing trend.As a continuation pattern, Falling Wedge occurs...

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Market Analysis Video: Updates on Dow and Nasdaq Markets

Watch the following videos to see what’s happening in both of the markets:* Updates on Dow marketIf nothing else, watch this video as this could be one of the most important weeks for the DOW and its future. This 3-minute video will share both interesting and educational analysis from both a Fibonacci and Japanese candlestick point of view.The weekly chart on the DOW is flashing the same Japanese candlestick signal that it had earlier in April of this year. Back then the DOW dropped from 11,200 to 9,700 in the space of just 10 weeks!* Updates on...

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Market Analysis Video: Make or Break in the S&P Market

This new short video shows you one key element that could make or break the S&P 500 market.See how to interpret the trendline, Fibonacci, Moving Average Crossover, and Divergence analyses together.Other Learning Resources:* FREE Trading Educational Videos with Special Feature* FREE Trading Educational Videos: Learn Technical Analysis from Award Winning Author John MurphyRelated Topics:* Options Trading Basic – Part 1* Options Trading Basic – Part 2* Understanding Implied Volatility (IV)* Option Greeks* Understanding Option’s Time Value* Learning...

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Bracketed Order

Bracketed Order allows traders/investors to manage the trade/position by “bracketing" an order for opening a position (i.e. the “main order”) with two opposite “side orders” for closing the position in order to limit losses and lock in profits, without having to constantly follow the position.The order quantity for the “side orders” matches the original order quantity of the “main order”.When the Bracketed Order is placed, the trader/investor must determine the corresponding prices for all the 3 component of the Bracketed Order (One “main order”...

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Market Analysis Video: Intense Bull vs Bear Battle in the Current S&P Market

The battle between the bulls and the bears continues in the S&P 500 with neither side able to gain the upper hand. This choppy trading action will eventually lead to a large move one way or the other. The bulls are betting that we are headed higher and the bears are betting that the economy is going to tank.This new video shares some of the key technical points that are still in play and where the market needs to go in order to break out of the current logjam that it's in.Other Learning Resources:* FREE Trading Educational Videos with Special...

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THREE WHITE SOLDIERS - Bullish Candlestick Pattern

Three White Soldiers is a 3-day bottom reversal / bullish reversal formation.It could occur at the end of a downtrend, or during a pullback within an uptrend, or at the support.The appearance of Three White Soldiers pattern signals that higher prices are likely ahead.This pattern is more powerful particularly when it appears after an extended decline followed by sideways movement.Three White Soldiers pattern consists of 3 consecutive long white candlesticks...

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Market Analysis Video: Determining Potential Downside Target for S&P Market

This new video shows how to use the combined analysis of Moving Average Crossover, Fibonacci Retracement, RSI (Overbought/Oversold), and Chart Pattern (i.e. Head and Shoulder pattern) in trying to predict where the market is moving to and the potential target price.Other Learning Resources:* FREE Trading Educational Videos: Learn Technical Analysis from Award Winning Author John Murphy* FREE Trading Educational Videos with Special FeatureRelated Topics:* Learning Charts Patterns* Learning Candlestick Charts* Options Trading Basic – Part 1* Options...

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Trading Educational Video: BEARISH ENGULFING Candlestick Pattern

Japanese Candlestick patterns have been popular and widely used by traders. There are several major Candlestick Patterns which most technical traders should be familiar with, such as: Bullish vs. Bearish Engulfing, Harami Bullish vs. Bearish, Piercing Line vs. Dark Cloud Cover, Hammer vs. Hanging Man, Inverted Hammer vs. Shooting Star, etc.This video shows the real current example for BEARISH ENGULFING Candlestick Pattern in the Nasdaq market. Do watch it to see the more detail analysis and why you should pay attention to this pattern when it appears...

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Trading Educational Video: How To Use FIBONACCI RETRACEMENT and MARKET DIVERGENCE in Your Trading

Some of the powerful tools in the technical analysis which many traders use to help them in their trading are Fibonacci Retracement and Market Divergences.How to make use of these two powerful tools in your trading?The following are two videos that discuss and explain in very detail about how to use Fibonacci Retracement and Market Divergence to help in your trading analysis.* Fibonacci Retracements Explained* Market divergences ExplainedI believe the explanation in the videos will be very useful & educational, along with the real examples...

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The Battle of the Bull and Bears in S&P 500 market

The battle between the Bulls and Bears continues with very choppy trading action. The rally from a potential double bottom is a cause for concern for the Bears. However, the Bulls are in a similar situation as they have to prove their case with sustained market action.This video shares some of important key levels in the S&P 500 market. Volume continues to be light and that is why the markets are moving around and are so volatile at the moment.Analysis Tool:Get Free Trend Analysis for your favorite symbolsOther Learning Resources:* FREE Trading...

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HEAD AND SHOULDERS BOTTOM PATTERN – Part 2: Important Characteristics

Go back to Part 1: Head & Shoulders Bottom FormationImportant Characteristics of Head & Shoulders Bottom PatternExisting Trend:There should be an established existing DOWNWARD trend prior to the pattern.Shape of Head & Shoulders Bottom Pattern:1) Head & Shoulders:Ideally, the shape Head & Shoulders should be symmetry. The Left & Right Shoulders should bottom at about the same price level. The Left & Right Shoulders should also about the same distance from the Head, which means the time duration to develop the formation...

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HEAD AND SHOULDERS BOTTOM PATTERN – Part 1: Formation

Head & Shoulders Bottom Pattern is a bullish reversal pattern that normally forms after an extended downtrend, which marks a shift in trend from bearish to bullish. This pattern is very popular because it is regarded as one of the most reliable of all patterns.Head and Shoulders Bottom pattern is sometimes referred to as Inverse Head and Shoulders pattern.The Formation of Head and Shoulders Bottom PatternHead and Shoulders Bottom Pattern contains...

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Market Analysis Video: Bearish View on Dow and S&P markets

Watch the following videos for an update on Dow and S&P markets:* Dow market analysis* S&P market analysisIn the videos, you’ll again see the “power” of Fibonacci tools, along with MACD Divergence analysis. Happy watching! :)Other Free Trading Videos for Learning Resources:FREE Trading Educational Videos with Special FeatureAnalysis Tool:Get Free Trend Analysis for your favorite symb...

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Binary Options

What is Binary Options?According to Wikipedia, Binary option is a type of option where the payoff is either some fixed amount of some asset or nothing at all.There are two main types of binary options:* Cash-or-nothing binary option: Pays some fixed amount of cash if the option expires in-the-money.* Asset-or-nothing binary option: Pays the value of the underlying security if the option expires in-the-money.Hence, the options are “binary” in nature, because there are only two possible outcomes.They are also called all-or-nothing options, digital...

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HEAD AND SHOULDERS TOP PATTERN – Part 2: Important Characteristics

Go back to Part 1: Head & Shoulders Top FormationImportant Characteristics of Head & Shoulders Top Pattern:Existing Trend:There should be an established existing UPWARD trend prior to the pattern.Shape of Head & Shoulders Top Pattern:1) Head & Shoulders:Ideally, the shape Head & Shoulders should be symmetry. The Left & Right Shoulders should peak at about the same price level. The Left & Right Shoulders should also about the same distance from the Head, which means the time duration to develop the formation between the...

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Important: Rare Opportunity Offered by Market Club

If you often watch many of trading videos here, you should have known about Adam Hewison from Market Club and the powerful tools he uses. Now, the Market Club is opening up a rare opportunity.... a 2 week free trial where you can have access to try all the powerful tools at no costs at all.There are 4 powerful tools available to Market Club members that you, as a free trial member, will have access to: Smart Scan, Trade School, Chart Analysis, and Data Central. They all will be opened up just for you.On top of that, you can get unlimited support...

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HAPPY EASTER 2010!

Wishing you a Blessed and Happy Easter 2010!Source of the picture: http://www.flickr.com/photos/52334279@N00/2327100884/Hope you enjoy and be blessed by the song below here....GOD bless!http://www.youtube.com/watch?v=qrPAZbD6fG0&feature=rela...

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HEAD AND SHOULDERS TOP PATTERN – Part 1: Formation

Head and Shoulders Top is a bearish reversal pattern that normally forms after an extended uptrend, which marks a shift in trend from bullish to bearish. This pattern is very popular because it is regarded as one of the most reliable of all patterns.The Formation of Head & Shoulders Top PatternHead and Shoulders Top Pattern contains three consecutive, sharp peaks / tops, whereby the middle peak is the highest (Head) and the other two peaks (left...

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Trading Educational Video: “Day Trading Made Simple”

If you’re keen to learn some knowledge about Day Trading, here is the chance to learn from a renowned trading expert William Greenspan for FREE.Watch this video, and grab this chance while it’s still fr...

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A Technical Video Analysis of the Equity Market

Although all the indices are undergoing some correction recently, the major trend for all the indices still remains positive. However, the trend may potentially reverse to negative in these markets should the key reversal price levels are broken.This new short video will show you an analysis of where the key reversal area is in the S&P 500, the NASDAQ, and the Dow, if in fact the markets are ever going to reverse to the downsi...

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Conditional / Contingent Order – Part 2: Examples

Go back to Part 1: How It Works.Examples of Conditional / Contingent Orders:Example 1:Stock XYZ has been trading in a range between $30.00 and $35.00. You want to place a buy order to buy the shares of XYZ when the stock has broken out the range and show upward price movement. You can place a contingent order and set a condition that when the price is trading at $35.20 or above (Trigger Price >= $35.20), place an order to buy XYZ at $35.30 (i.e. Limit Order with Limit Price $35.30).Suppose when the market opens the next day, XYZ opens at $35.25,...

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