Blog

The MTM Take

Your Trading Plan of Attack

When scanning for trades I do it with purpose. When searching for directional or vertical trades, there are conditions that must be met. And the first one is that the market has come into a long-term support/resistance zone. Markets frequently reverse when revisiting previous extremes. When a market reaches such an area,

Read More »

Time to Consider a Call Credit Spread

The market has moved a fair amount higher since the big drop earlier this year. In the past week or so, we saw a pullback establishing new resistance. With that in mind, a call credit spread could prove to be a useful trading strategy. Call credit spreads or, as they are sometimes

Read More »

What Triggered Today’s Stock Tumble?

Stocks had been trending steadily for a couple of weeks, but today they took a tumble, seemingly out of the blue. In the Wednesday MTM Daily Edge session, we prepared for a possible reversal or consolidation phase to begin. A day before the sharp decline there were subtle changes that are common

Read More »

Trade With the Trend

If you have traded for any serious amount of time, you have probably heard the saying “the trend is your friend.” I start my Group Coaching class each and every session by reminding traders to consider the trend. To me it is an important reminder to look for opportunities when it comes

Read More »

How to Compete With Pro Traders

I have three sons who grew up in a unique era. Little league and soccer were their first social gatherings. Around that time electronic games were just taking hold. Baseball, football, soccer, hockey, water polo, lacrosse, boy scouts and music were options for youngsters, and my kids tried them all. They embraced

Read More »

How to Plan Your Option Trading Day

Just recently in MTM’s daily group coaching class, I shared a PowerPoint about how I go through my option trading day. It was not extremely detailed because of lack of time, but I would like to share some of the finer points with you here today. Prep Work Consider taking into account

Read More »

What You Should Know About Bollinger Bands

I have researched and tested many technical tools and indicators. My goal has always been to find the ideal combination of instruments without overloading my charts. When traders use too many tools, they often get conflicting signals making it difficult to execute trades confidently. I began testing new disciplines years ago and

Read More »

Iron Condors Are Not as Complicated as You Think

An iron condor is an option strategy that may sound complicated, but it really is not. It is as simple as combining two credit spreads. It is not complicated but managing the position may be. A call credit spread is implemented above the current stock price and a put credit spread is

Read More »

What’s in Your Trading Toolbox?

As an educator I make it a point to help students build a solid fundamental and technical foundation. Years ago, I started my own “toolbox” that is now filled with facts, axioms and statistics I use to guide me when trading and creating strategies. My first experience in the markets was on

Read More »

Put Volatility to Work When Trading Earnings

With another round of quarterly earnings under way, it feels like a good time to talk about an option strategy that revolves around the expected volatility event. The great thing about options is that there are a variety of ways to profit with them depending on the outlook and strategy. At Market

Read More »

Keep It Simple When Viewing Candles

Arguably daily candlesticks are the most widely used technical tool to analyze price action. The reason for this is because they are designed to track opens and closes, which are the most volatile and liquid times of the trading day. When a market closes above the opening price, it is thought to

Read More »

Horizontal Support and Resistance Should Catch Your Eye

Scanning for opportunities based on charts is never really easy. In fact, sometimes it can be quite difficult. But if you keep in mind that support like resistance has a better chance to hold than break, you will be a better technical analyst. To me, one of the easiest things to do

Read More »

How to Use Pivot Points in Your Trading

Moving averages are the most popular directional gauges. They are typically the first technical indicator in the novice trader’s toolbox. Many professional traders rely on them as well. Typically, the directional signals come when a short-term MA crosses a long-term MA. The problem with this method is that by the time the

Read More »

A Volatile Market Is an Excuse to Review Your Trades

With volatility picking up in the market once again, option traders can have an instant edge. But sometimes, because of market uncertainty or wider than normal bid-ask spreads, it may be hard to profit. As you hear me say plenty of times, no position is sometimes the best position. Traders need to

Read More »

Volatility Apt to Remain High Amid Fed Uncertainty

On Wednesday afternoon the FOMC meeting culminated with no changes in monetary policy. The equity indexes rallied on the news that the Fed will continue to be accommodative and use all their tools to ensure Americans receive financial aid where needed. However, 30 minutes after this news was reported, Chairman Powell held

Read More »

Hold Your Horses, Option Traders

Patience. It is a key attribute to a successful trader in my humble opinion. As I like to say, when the market is open and those candlesticks (if you use candlesticks) are moving, the blood is pumping and emotions are running high. But a trader needs to be calm and not let

Read More »

How to Project Price Targets

I was asked this week whether there is a way to project how far a trend will travel or how long a consolidation phase will last. Quite often the two are related. But in this blog, I will focus on setting price projections after a market has broken free from a congestion

Read More »

Mental vs. Hard Stop: Which to Choose When

What to consider when contemplating stop losses in option trading is a topic that comes up routinely in MTM’s Group Coaching class. When it comes to options, stop losses can be a little tricky. Bid-ask spreads tend to be a bit wider, which means there could be more “ground” to make up

Read More »

Use RSI to Navigate Uncertain Markets

Technical indicators can be quite helpful when fundamentals are absent. Now more than ever traders need to interpret price action using charts because the stock market lacks guidance. Earnings estimates and guidance mainly drive stock prices. With much of the economy shut down and the uncertainty of when it will be running

Read More »

What Does a Bullish Base Look Like?

I talk about bullish bases in group coaching class practically every day. The market has been predominantly bullish, but what does a bullish base look like and how can we use it for a potential bullish entry? Here is a short blog explaining what it is and what to look for. A

Read More »

Using Double Distributions to Identify Trends

To be a good market analyst and trader, you should make it a point to learn intricate details that are illustrated in charts. The study of charts or technical analysis is what most trading systems are built upon. Learning and problem solving are a big part of artificial intelligence (AI). The idea

Read More »