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The MTM Take

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

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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

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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

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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

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3 Things You Need to Know Before You Trade a Straddle

It’s shocking. Most people simply don’t make money trading straddles—even when things are volatile. Why, you ask? It comes down to just 3 simple factors that are often overlooked by traders. And once you know them, you’ll be a better trader in all situations—especially when expecting high volatility. How Straddles Work Straddles

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A Look at Market Reversals and Relationships

These are tough times for all, and it will get worse before it gets better. For traders these highly volatile markets can be scary because the normal fundamental data do not influence markets like we are used to. Fundamentals trump technicals, but even now the fundamentals cannot be trusted. The day ranges

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Now Is a Good Time to Review Your Trades

Option traders generally love volatility. It gives them an edge that stock traders cannot get. But when market volatility is running rampant as it has been over the past several weeks, it can make things a little more difficult for option traders. Generally, option traders are not day traders. They typically hold

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Top 3 Trading Strategies for the Coronavirus Market

[Click the image above to watch Dan's video; here is the transcript.] I’ve had lots of questions on how to trade the markets during the Coronavirus outbreak. Should we sit it out? Should we be all in? Should we short everything? It can be nerve-racking to know what to do, so I’m

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Coronavirus Creates Commodity Chaos

For a few decades the first thing I have done each morning after turning on the coffeemaker is to check the movement in futures markets. I follow the financial and energy sectors closely. My checklist includes stock indexes, interest rates, precious metals, crude oil and currencies. If these sectors have unusually large

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Crazy Market? Consider an Iron Condor

This market is enough to make some option traders crazy and broke. Who would have thought new highs would be consistently made almost on a week-to-week basis? For the most part, the major indexes have moved higher over the past several months, but there have been times when the market inexplicably has

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The 60-Minute Rule of Trading

Stock indexes continue to break barriers in response to positive economic data. The historic rise has also come with headwinds such as impeachment, coronavirus and conflict with Iran. The question on many traders’ minds is, what will prompt the next big downturn? The markets are sensitive to the spreading of the virus.

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Reducing Risk as an Option Trader

There is no sure thing as an option trader when it comes to profits, no matter how much the odds may be on your side. All trading is speculative, but as traders we do our best to improve the odds. But what if there isn’t a setup that matches our criteria for

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Coronavirus: How to Protect Your Trades

Stock indexes took a big hit this week following news that the coronavirus was spreading around the globe and that the death toll was rising. The initial reaction incited a decline over the next two days that spanned about 75% of an average month range. When a market moves that far in

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Implied Volatility Skews During Earnings

If you don’t trade options over earnings announcements, you may not have noticed what happens to implied volatility (IV) levels. Usually an expected volatility event like earnings increases the price of options. In other words, when implied volatility increases, so do option prices. That can give an option trader an edge, but

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Helpful Hints for Using Moving Averages

When trading futures I tend to be more short-term oriented than when trading stocks. I often enter trades that are intended to be speculative, meaning I will be out of the position within 24 hours or even by the end of the trading session. Generally, stock market traders and investors plan to

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Using Technical Analysis to Gain Edge

I work with traders all the time on how to decide what strategy to consider. To me, it all starts from the chart and the key is to look at different time periods. Technical analysis can give all traders an edge. By doing this properly, you can put the odds on your

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Know the Numbers Before You Trade

Every new year I update a spreadsheet that consists of recent average ranges and benchmark ranges for many stocks, ETFs and commodities. Most charting platforms have the ATR indicator (average true range) to make the task of updating easy. One reason for comparing historic and current data is to identify trend potential.

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Why Expiration and Strike Prices Are Important

When it comes to options trading, traders have many strategies from which to choose. One could say there are plenty of options on your options. This can be particularly true for vertical spreads. Just to start with, there are vertical debit and vertical credit spreads. Generally vertical debit spreads are used when

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A Prepared Trader Is a Profitable One

This week was historic for more than a few reasons. The United States-Mexico-Canada Agreement was accepted by all three countries and should be passed in early January. Phase 1 of a trade agreement with China was signed. The pact included some resolution to theft of intellectual property. There will be large purchases

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Traders Deserve a Break

This is my usual blog that I write every soften where I implore you to take some time off from trading. The market will be there when you get back. No matter what you do or did for a living, everyone needs some time off to energize themselves. Trading is no different.

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