Charting Strategies and Chart Patterns, Stock and Forex Charting Blog

Monday, March 31, 2008

Weekly Stock Information Newsletter, March 31

The Week Ahead: Consumer sentiment reached a 16 year low blamed primarily on high gas prices, falling home values and weak expectations for future spending. The ISM Manufacturing Index is released on Tuesday with auto sales and construction spending. Wednesday, Ben Bernanke will testify on the economic outlook and factory order numbers are due out. The jobless claims figures and the all important March employment report come out on Friday.

Friday, March 28, 2008

Triple Bottom Trading Pattern

Triple bottom is a trend reversal pattern, which is used by traders to generate buy signals. Triple bottom patterns occur rarely for most stocks and are considered as one of the most reliable indicators for buy signal. These are usually long-term trends and are thus noticed in weekly, biweekly or monthly charts.

Thursday, March 27, 2008

Being a Successful Stock Trader

Becoming a successful stock trader is not at all an easy task and is impossible with out clear goals, dedication, planning and hard work. Below are some features those most successful stock traders have.

Wednesday, March 26, 2008

Accumulative Swing Index or ASI

Accumulative swing index or ASI is a technical indicator developed by Welles Wilder. It was originally designed for futures trading, but is also used for trading stocks and forex currencies. ASI is a simple and easy tool to interpret technical indicator which traders use predominantly as a trend conformation tool.

Tuesday, March 25, 2008

Starting Your Forex Currency Trades

Forex currencies are the most recent financial product available for individual traders. Forex market is the largest and most liquid financial market available today. Starting your trading career with forex is always a good option; although it is better to have previous trading experience. Here are steps to follow for starting your forex career.

Monday, March 24, 2008

Weekly Stock Trading Newsletter, March 24

The Week Ahead: Leading economic indicators showed a fifth straight monthly decline confirming the economic slump. With this data now widely known, will the markets start looking ahead to a possible recovery? Existing home sales are due on Monday. Consumer confidence figures are out on Tuesday. New home sales and durable goods numbers are reported Wednesday while the final 4th quarter GDP is released Thursday. Friday brings the personal income and spending reports along with consumer sentiment.

Saturday, March 22, 2008

Gaps – Information and Types

Gaps occur when there is no trading of financial instruments in between a two different price levels. They can be easily noticed from trading charts, where one worm stops a place and starts from a different place. Gaps occur for all type of financial instruments like stocks, options, forex and futures, and are more predominant is volatile markets with less liquidity. Usually gaps are created when traders collectively respond to news or rumors.

Thursday, March 20, 2008

Managing Your Investing Portfolio

Most people consider stock market trading or investing as an option for diversifying their portfolio, and are less active traders. Most stock market investors are employees, who want to maximize their savings by retirement. But trading or investing in stocks or other financial products is a risky practice and the trader/investor has to be strict with the portfolio management. To create an effective investment portfolio, you’ve got to understand the principles of risk and asset allocation.

Wednesday, March 19, 2008

Dividends – Things to Know

Dividends are payments that stock holders receive as a ‘share of wealth’ from companies of which stocks they are holding. Dividends are paid either as cash or as stock and will be on a quarterly or annual basis. Here are some basic things a trader must know about dividends.

Tuesday, March 18, 2008

Martingale and Anti-Martingale Trading Systems

Both martingale and anti-martingale are position sizing strategies, which can be used to win trades and/or to maximize profit from trades. Remember both are high-risky trading strategies, are not at all suited for inexperienced traders and traders with low risk tolerance, and need very strict money management.

Monday, March 17, 2008

Weekly Trading Newsletter, March 17

The Week Ahead: The collapse of Bear Stearns and its ultimate rescue by the Fed and J.P. Morgan has financial markets fearful others may follow and may be more widespread than is actually known. The Fed also lowered the discount rate this past weekend between lending institutions by a 1/4 percent in an emergency move. The FOMC meeting on Tuesday is likely to produce a .75 to 1.00 reduction in the fed funds rate as well. Other reports to watch are Tuesday's PPI and housing starts. Friday the markets are closed.

Friday, March 14, 2008

Condor Spread Trading Strategy

Condor spread is a multi-leg options trading strategy. It is a complex neutral trading strategy with limited profit and limited risk. Like butterfly options trading strategy, condor spread strategy also has maximum profit and loss levels; but instead of 3 legs it consists of 4 legs. Condor spread is a debt spread options strategy and employed when minimum change is expected in underlying stock price.

Thursday, March 13, 2008

Percentage Price Oscillator or PPO

Percentage price oscillator (PPO) is a stock market indicator used to figure out the relationship between long-term and short-term trends. Percentage price oscillator gives the percentage difference between long-term exponential moving average (usually 26 day EMA) and short-term exponential moving average (usually 9 day EMA). The formula for PPO is,

Wednesday, March 12, 2008

Advantages of Futures Trading

Over the years, futures trading is considered as a measure of hedging the price volatility of underlying stock or commodity. In addition to hedging price changes, futures trading offers much more advantages over other forms of trading.

Tuesday, March 11, 2008

Triangle Forex Arbitrage Strategy

Triangle or triangular arbitrage is a Forex trading strategy, which is theoretically ‘risk free’. As the name suggest, triangle arbitrage includes trading 3 different currency pairs almost simultaneously to profit from exchange rate difference between them.

Monday, March 10, 2008

Stock Market Trader Newsletter March 10

The Week Ahead: American businesses cut jobs at the fastest pace in 5 years as back to back increases in job losses in January and February combined with a record number of home foreclosures intensifies recession fears. The markets will key in on the wholesale inventories report on Monday and the trade balance numbers on Tuesday. More significantly though will be Thursday's retail sales and business inventories followed by Friday's Consumer Price Index.

Friday, March 7, 2008

Reading the Order Flow

Good understanding of order flow – ask and bid prices – is vital for market timing. It is found that many beginners although strong on technical analysis and trading strategies lose their money because of poor order entry timings. These tips below can help a novice trader to better read the order flow.

Thursday, March 6, 2008

Long Guts Options Trading Strategy

Long guts is an options trading strategy which is practiced by traders when high volatility is expected in underlying stock price. It is a neutral options trading strategy with unlimited profit potential and limited risk. Long guts traders buy the same number of call and put options of underlying stock with the same expiration date and higher strike price.

Wednesday, March 5, 2008

McClellan Oscillator – Market Indicator

McClellan oscillator is another stock market indicator, which can be used in conjunction with other technical analysis tools for predicting market direction and overbought and oversold conditions. McClellan oscillator was developed by Marian McClellan and Sherman in 1969. This market indicator is most helpful for short-term traders, especially for figuring out correct market reversal points.

Tuesday, March 4, 2008

Things a Forex Trader Must Know

Like all other financial products traded in different markets, currency trading also requires vast knowledge to be profitable. No trader can blindly trust his/her trading system or generated Forex signals. Knowledge of market and international affairs is must for Forex traders. Below are some basic things that a Forex trader must know.

Monday, March 3, 2008

Weekly Stock Market Newsletter March 03

The Week Ahead: The credit contraction continues to threaten corporate profits going forward especially financial companies as they led the market down again this past week. With oil priced over $100 now, the inventory report on Wednesday takes on more meaning. The ISM Manufacturing Index will be watched on Monday. The Fed's beige book and factory orders are released on Wednesday. Pending home sales and chain store sales are due Thursday, but the most important report will be Friday' employment numbers.

Saturday, March 1, 2008

Software Demo Trading – Things to Look for

Today most brokers offering online stock and Forex trades offer free demo trading of their trading platforms for a fixed period of time. Traders can make use of this offer for get familiar with the software and the market, and to test different trading strategies. Although demo trading is not that similar to real trading, it is advised to paper trade when you are new to trading, whenever you open an account with a different broker or whenever you change a trading platform. There are many things to get familiar with before you enter in to actual trading with real money.

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