OPEN INTEREST AND MARKET DIRECTION

OPEN INTEREST AND MARKET DIRECTION

ALL YOU NEED TO KNOW ABOUT OPEN INTEREST AND MARKET DIRECTION “There’s a sucker born every minute!” You are likely familiar with this phrase which has been attributed to the late P.T. Barnum.  It means that there are a lot of gullible people in the world.  Wall Street is counting on investor vulnerability in order to line their own pockets. Business television helps to perpetuate this.  Most of the time, when you tune in you are bombarded with “news” of the hottest stocks; the ones that have already increased in…

Bump and Run Reversal

Bump and Run Reversal

Bump and Run Reversal Chart Pattern As the name implies, the Bump and Run Reversal (BARR) is a reversal pattern that forms after excessive speculation drives prices up too far, too fast. Developed by Thomas Bulkowski, the pattern was introduced in the June-97 issue of Technical Analysis of Stocks and Commodities and also included in his recently published book, the Encyclopedia of Chart Patterns. The pattern was originally named the Bump and Run Formation, or BARF. Bulkowski decided that Wall Street was not ready for such an acronym and changed…

Stop-Loss or Stop-Limit Orders

Stop-Loss or Stop-Limit Orders

Which Order to Use? Stop-Loss or Stop-Limit Order Traders and investors who seek to limit potential losses can use several types of orders that can get them into and out of the market at times when they may not be able to place an order manually. Stop-loss and stop-limit orders are two such order types that can accomplish this. But it is critical to understand the difference. Stop Loss Orders There are two types of stop-loss orders: 1) Sell-stop orders protect long positions by triggering a market sell order if the price falls below a certain level….

Chart Patterns (2) – The Double Top Reversal

Chart Patterns (2) – The Double Top Reversal

The Double Top Reversal Pattern The Double Top Reversal is a bearish reversal pattern typically found on bar charts, line charts and candlestick charts. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between. Note that a Double Top Reversal on a bar or line chart is completely different from Double Top Breakout on a P&F chart. Namely, Double Top Breakouts on P&F charts are bullish patterns that mark an upside resistance breakout. Although there can be variations, the classic…

INCOME AND TAXATION

INCOME AND TAXATION

RETIREMENT INCOME AND TAXATION When you retire, you will need income to finance your normal living expenses. You should consider what the sources of that income will be, and how that income will be taxed. Knowing the general outlines of the taxation of different forms of income may influence your decisions about investing your savings. What do you need to know about income and taxation? Below are some of the typical types of retirement income and a description of how they are taxed. Although this list does include many common…

Chart Patterns (1)

Chart Patterns (1)

Introduction to Chart Patterns There are hundreds of thousands of market participants buying and selling securities for a wide variety of reasons: hope of gain, fear of loss, tax consequences, short-covering, hedging, stop-loss triggers, price target triggers, fundamental analysis, technical analysis, broker recommendations and a few dozen more. Trying to figure out why participants are buying and selling can be a daunting process. Chart patterns put all buying and selling into perspective by consolidating the forces of supply and demand into a concise picture. As a complete pictorial record of…

CCI Correction

CCI Correction

Introduction – what is the CCI? Developed by Donald Lambert, the Commodity Channel Index (CCI) is a momentum oscillator that can be used to identify a new trend or warn of extreme conditions. This strategy uses weekly CCI to dictate the trading bias when it surges above +100 or plunges below -100, which are key levels noted by Lambert. Once the trading bias is set, daily CCI is used to generate trading signals when it reaches its extremes. Strategy Lambert’s trading guidelines for the Commodity Channel Index focused on movements…

MUTUAL FUNDS INVESTING

MUTUAL FUNDS INVESTING

WHEN MUTUAL FUNDS ARE YOUR ONLY CHOICE I recently discussed the idea of diversifying within your 401(k) or other defined-contribution employer-sponsored retirement plan. In most of those plans, mutual funds are your only investment choices. Mutual funds were a good idea, for their time. They allowed small investors to have diversified portfolios. They offered professional management of the funds. That frees investors from having to do as much work to study their investment choices. There are now better choices, in the form of exchange-traded funds (ETFs), that do the job of mutual…

Start Investing Easily

Start Investing Easily

How to Start Investing Easily With Just $100 Investing your money into the stock market and bonds isn’t something you do later; it’s something you start doing as early on in your life as possible. Why? To give your money the most amount of time to work for you. You see, if you save $100 in your sock drawer, 30 years from now when you go to check on it, you will still only have $100. Conversely, if you invest $100 in a mutual fund, even if you never made…

Trading Charts: Periods

Trading Charts: Periods

TRADING CHARTS: COMMON CHARTING PERIODS There are four types of trading charts commonly used by investors: Monthly Charts Weekly Charts Daily Charts Intraday Charts The different chart types illustrate a few ways price movement is expressed over a period of time. Now we will reverse that and examine price movement over different periods of time. You will notice that your view of a particular market can change drastically only by switching to a different time horizon. Monthly Charts These are trading charts that illustrate the movement of price over a…