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,
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
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
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
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
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
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
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
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
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
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
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
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
This is a Coronavirus market. We've got two things going on here: The human aspect and the economic aspect. Both are emotionally charged. And the good news is that it’s going to be OK. Seriously. It really is. It might not always feel like it at any given moment. And I’m not
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
[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
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
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
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.
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
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
