Crude and USO: Why they don’t track properly
Big move in FCEL
New bitcoin ETF: Here’s what’s wrong with it
How to Use Slow Stochastics to Indicate Overbought Scenarios
The Sunk Cost Fallacy: Why You Are Holding on to Your Losers
“The stock is down 25%. But I didn’t lose money because I didn’t sell it yet.” That’s a quip from a conversation I had with a friend in a London pub a while back (her talking, not me). From there the conversation ultimately finished with an “I agree to disagree” ending. I told her she […]
Update on US Steel
This Is What Volatility Is Telling Us
Short-Term Put Option Strategies Explained
The mentality behind short-term put option strategies is probably different from the mentality behind short-term call options. Many times, option traders consider short-term put options mostly as a means of protection, whereas call options are often used only to generate additional income. That said, long and short put options can both generate additional income and […]
Define Risk Using ATR, Value and Acceleration Areas
The first task after entering a position should be to determine risk. Risk may be a physical or mental stop loss. Trading is tough enough; setting risk relieves some tension and allows the trader to concentrate on profit potential and trade management. Risk can be measured using average true ranges (ATRs) or points at which […]
Bear Put Spread – The Right Time for This Options Strategy
There are multiple strategies for an options trader with a bearish, bullish or neutral bias. If a trader has a bearish directional outlook, he can use a long put option strategy to capitalize on an underlying moving lower. But sometimes buying a put option can be riskier than the trader wants because of potential price […]
Logical Steps for Developing Short-Term Trade Strategies
When creating short-term trade strategies, the first task is to understand what upcoming fundamental events are likely to have the biggest impact. In the financial markets at this point, employment and inflation data have the most impact on stocks, ETFs, bonds, foreign exchange, precious metals and even energies. On the first Friday each month the […]
Implied Volatility – How Traders Can Benefit From It
Implied volatility is the forecast of a likely movement in the underlying. Keeping it simple, implied volatility is how options are priced. When IV is higher, option prices are higher and vice versa. Generally, when the market moves lower, option prices and IV increase as demand goes higher for protection or a hedge. When the […]
Trade Setups Using Candlesticks and Average True Range
All technical tools perform at times, but none pay off all the time. The trick to technical trading is to identify when an indicator is likely to detect a high percentage winning trade. I have researched many charting techniques, indicators and tools in my 30-plus years in the commodity and stock markets. Whenever I come […]
Option Vega – How It’s Different From Other Option Greeks
Option vega, like option gamma, is one of those option greeks that often confuse option traders. But it does not have to be that way. Below we will break down the dynamics of vega so that even the most basic of option traders will have a clearer picture of this mystery greek. What Is Option […]
How to Choose Option Strategies Using Technics and Logic
There are no trading tools, indicators or patterns that pay off every time. However, they all have their moments. Good traders know when probabilities have shifted to favor a trend style trading strategy or a mean reversion (counter trade) approach. There are two essential technical indicators traders utilize to create strategy. One measures range (height) […]
Top Option Trading Strategies in Any Market
Today we’re going to look at some of the top option trading strategies for any market condition. As I’m sure you have noticed, the market can be a very unpredictable beast. At times it can leave you scratching your head and crying. However, one thing is for certain: There is a strategy for anything the […]
Lessons From the Trading Pits
Spend time with a broker or pit trader from the era when all trades were executed in a trading pit at an exchange and you will learn about the open outcry and the information it provides. Pits were created to facilitate trade. To an untrained eye a trading pit looks like a mess of mad […]
Support and Resistance Trading Techniques
Support and resistance are levels on a chart that tend to keep the underlying from moving through those levels. Support keeps the underlying from moving lower and resistance keeps the underlying from moving higher. Generally, two or more levels can be potential support and resistance but sometimes once is enough like a recent pivot high […]
How to Spot Market Extremes
One of the more difficult tasks traders face is choosing areas where market extremes (high or low) are likely to form. Pinpointing ideal entry and exit levels is possibly the hardest but most desired task we face. In the industry, buy areas are known as support and sell zones are called resistance areas. To enhance […]
Selling Naked Calls and Puts – All You Need to Know
There are only four things to do as an option trader that do not involve a spread. Most option traders know that they can buy a call option as a bullish strategy and buy a put option as a bearish strategy. But many option traders have never looked at selling naked calls and puts. Of […]
Market Sensitivity and Commodity Chains – How to Check
Market sensitivity is often discovered through commodity chains. In the MTM Daily Edge sessions, we examine many markets for patterns that typically precede the start of trends, as well as the setups that often occur when a trend is near exhaustion. Pattern recognition and technical analysis are a big part of many traders’ decisions. The […]
