One of the first things many traders learn when they begin studying technical analysis is that the market moves before the economy. So why is it then, even when traders know this, that when good economic comes out traders assume the market will go up. This is the “action-reaction” model: if good economic news come […]
Trend extrapolation is when you assume a current trend will persist, and thus make predictions out into the future based on the current trend. Now sometimes this can be good, for as we have all heard” The trend is your friend…until it bends.” And trends do inevitably bend the other way. I prefer to trade […]
“What! But growing up I was told we are all unique!” We all have different personalities, skills and tendencies, but when it comes to trading we aren’t unique. By that I mean we all trade the same markets, which levels the playing field. Because the market is composed of such a wide array of people, […]
The cycles discussed here are longer-term cycles, and not pressingly relevant to short-term traders. Yet, by seeing these cycles and understanding how cycles work, you may be able to find your own cycles and cycle strategies for trading on shorter time frames. And if nothing else, knowing about these cycles can make you sound very […]
April 23 started with big moves in the AUD forex pairs, following CPI numbers. The action continued following GBP Bank of England Minutes several hours later. AUDUSD Trades If you were quick you could have gotten in on the short right after the news announcement (4:30 on chart below). Typically I don’t trade right at […]
When trading you are bound to face distractions. Learning to effectively deal with these distractions can mean the difference between a profitable day and a disastrous one. Here we will look at some common distractions, and how to deal with them so you can more effectively trade. Other Work For many traders, trading is a […]
For lack of a better word, I call it the “valley floor.” During a trend the price will often pull back to this area. Not always, but whether it does or doesn’t provides some valuable insight. The main reason I look for it, is that if the price is trending well, then this valley floor […]
Maybe because it is discussed in most basic trading books, and is a often referred to as a “break to new highs (or lows),” that trading a new high or new low seems so appealing. Most traders are taught by basic strategies or free guides to trade an uptrend by buying (shorting) when the price […]
Whether you trade options, binary options, or forex, if you use forex charts, you may notice a couple strange things at first. Here we will look at some simple concepts to help you better understand the forex market and forex charts. Pairs and Trend Direction Currencies always trade in pairs – the EUR/USD, AUD/CAD etc. […]
Had dinner last night with a few other traders, and one topic that came up was how many stocks/forex pairs/etc each trader watches. We all concluded that typically day trading 3 to 5 provided a good assortment of opportunities, but more than that and it could actually be detrimental. That was just our number, yours […]