Articles

Cory Mitchell · Jan 9, 2019

Although prices may appear to be random, they actually create repeating patterns and trends. One of the most basic repeating patterns is a fractal. Fractals are simple five-bar reversal patterns. This article will explain fractals and how you might apply them to your trading strategy. Introduction to Fractals When people hear the word "fractal," they often think about complex mathematics. That is not what we are talking about here. Fractals also refer to a recurring pattern that occurs amid larger more chaotic price movements. Fractals are composed of five or more bars. The rules for identifying fractals are as follows: A bearish turning point occurs when there is a pattern with the highest high in the middle and two lower highs on...

Prableen Bajpai · Jun 20, 2018

Many people participate in the stock markets, some as investors; others as traders. Investing is done with a long term view in mind, years or even decades. Trading, meanwhile, is done to pocket gains on a regular basis. There are many sub categories of traders. One of the common ways to distinguish them is the “time period” for which traders hold a stock, which can vary from a few seconds to months or even years. Some of the popular trading strategies are day trading, swing trading, scalping and position trading. Choosing a style that suits your own trading temperament is essential for the success in the long term. This article lays out the differences between the scalping strategy and a swing trading strategy. Scalping The strategy...

Mark P. Cussen · May 11, 2018

Traders and investors who seek to limit potential losses can use several types of orders to get them into and out of the market at times when they may not be able to place an order manually. Stop-loss orders and stop-limit orders are two tools that can accomplish this, but it is critical to understand the difference between the two similar sounding orders. Stop-Loss Orders There are two types of stop-loss orders. 1) Sell-stop orders protect long positions by triggering a market sell order if the price falls below a certain level. The underlying assumption behind this strategy is that if the price falls this far, it may continue to fall much further, so the loss is capped by selling at this price. For example, let's say a trader owns...

Alan Farley · Nov 3, 2017

Millions of traders test their skill in the financial markets each year, but most are destined to lose their stakes and walk away with their tails between their legs. A select few defy the odds, churning out profit after profit over long periods, building the wealth, security and wellbeing that others just dream about. So what separates these elite traders from the mediocre pack and how can you gain membership to this exclusive club? First, let’s consider what isn’t required to become an elite trader. You don’t need to take special courses or move to Manhattan and work on Wall Street for a decade or two, although many elite traders follow that path. Nor do you need a huge stake to start your journey, because you already possess the...

Tim Parker · Oct 27, 2017

The furore over high-frequency trading (HFT) was once just a preoccupation of those directly connected with Wall Street. Now the topic has gone mainstream and may soon go all the way up to the White House. In October 2015, US Presidential hopeful Hilary Clinton's campaign proposed a tax on HFTs, a move that surprised many, since previously this was considered some quixotic notion of her rival Bernie Sanders. At a press conference in May 2015, Sanders' "Robin Hood Tax" campaign detailed the Vermont senator's proposal for a tax on trades at $0.50 per $100 for stocks and a smaller amount for certain other financial instruments. The quixotic purpose: to use the tax revenue to make US public universities free, and eradicate student debt...

Cory Mitchell · Jun 30, 2017

A "trading rut" is invariably endured by almost all traders at some point in their trading experience. A trading rut is a point in time where profits are elusive, or losses may even be mounting. These losing or unprofitable streaks can happen to anyone at any time. It may occur because the market has shifted in some way. At other times, it may be because the trader has altered a strategy or is no longer adhering to a trading plan. No matter what the reason for the slump is, there are five questions a trader can ask to help isolate the problem so changes can be initiated and hopefully a return to profitability will ensue. The Questions The following questions should be answered as honestly and as fully possible. Each will probe current...

Alan Farley · Apr 14, 2017

Financial markets are enormously complex, but most trading strategies tend to fall into one of two categories: trend following or swing trading. Each strategy has advantages and disadvantages, as well as specific requirements that investors must follow consistently in order to avoid errors. However, many investors randomly apply these contrary strategies without understanding how that can undermine profitability. Identify whether you are a trend trader or a swing trader in order to hone your strategy correctly. In theory, the trend trader takes risk in an uptrend or downtrend, staying positioned until the trend changes. In contrast, the swing trader works within the boundaries of range bound markets, buying at support and selling at...

Elvis Picardo · Jan 27, 2017

Active traders often group themselves into two camps: the day traders and the swing traders. Both seek to profit from short-term stock movements (versus long-term investments), but which trading strategy is the better one? Below, we explore the pros and cons of day trading versus swing trading. Day trading, as the name suggests, involves making dozens of trades in a single day, based on technical analysis and sophisticated charting systems. The day trader's objective is to make a living from trading stocks, commodities or currencies, by making small profits on numerous trades and capping losses on unprofitable trades. Day traders typically do not keep any positions or own any securities overnight. Swing trading is based on identifying...

Shobhit Seth · Nov 11, 2016

Most brokerage firms today offer free or premium trading software applications to individual clients when they open a brokerage account. The bundled software applications, offering a wide variety of trade, research, and analysis functions, are used as a prominent sales-pitch to the trader client. They also boast features like in-built technical indicators, fundamental analysis numbers, integrated applications for trade automations, news, and alert features. We will examine some of the most widely used, based on features (not price point): MetaStock Trader: One of the most popular stock trading software applications, MetaStock Trader offers more than 300 technical indicators, built-in drawing tools like Fibonacci retracement to...

Sergei Golubitskiy · Sep 16, 2016

Some 10 years ago any attempt to mention financial markets in a non-professional milieu inevitably hit the wall of skepticism: «Forex again?! Oh, spare us this rubbish, please!» I would like to draw reader’s attention to a particular issue: this common reaction is based on the misconception known as fallacy of composition where the negative attitude towards Forex is inferred upon financial markets in general. Like it or not, that kind of attitude distorts the reality dramatically and we must figure out how to avoid detrimental generalizations. It is obvious that this reality switch is rooted in the heavy advertising run by Forex brokers all over the world. The negative attitude is just an epilogue to the personal experience...

Matt Blackman · Oct 4, 2015

Single-market analysis is the study of one asset class or market in a single country. Intermarket analysis, on the other hand, is the study of multiple asset classes in a variety of markets in nations around the globe. Do investors and traders using the second technique have a significant advantage over those using the first when it comes to returns? We have all heard financial experts sing the praises of the diversified portfolio. "It is never a good idea to put all your eggs in one basket," they say. What they mean is that limiting your investments to just a few companies greatly increases your risk, especially if one or two of your major holdings experiences a meltdown. Investors who heed this conventional wisdom own a number of...

barjon · May 22, 2015

You’re a trader, right, not a shopkeeper and there can’t possibly be any common ground between the two can there? Just a minute, though, both are trying to make a profit from the transactions they undertake and both are concerned about their bottom line and their overall and continued profitability. In short, both are in business. As a trader it is quite likely that your Trading Plan will concentrate its focus on how you will approach individual trades. It will probably have quite a lot about how and when you will enter a trade, rather less about how you will guard against excessive loss and less again about how and when you will take your gains. Your bottom line probably won’t rate much of a mention at all. A Business Plan, however...

Jay Ng · Apr 25, 2014

Firstly back-testing should be done as accurately as possible. This means that all the best practices of back-testing should be implemented. Some examples are: Including reasonable spreads Avoiding look forward bias Including any possible forms of commissions if applicable Using historical data which is as accurate and complete as possible Ensuring trade logic tested is reasonable and practicable in actual trading Reducing slippage (although this is normally not a problem with Forex due to its immense liquidity) With accurate back-testing, characteristics of the trading strategy can be observed and analysed reliably. What this means is the risk and returns profile of the strategy is statistically reliable, and any performance...

Bennett McDowell · May 25, 2012

I have found that traders usually fail for five primary reasons:- 1. Lack of trading skill 2. Lack of risk capital 3. Improper trading psychology 4. Lack of support 5. Lack of experience 1. Lack of Trading Skill Usually new traders are so eager to make a killing in the market that they are just too impatient to learn how to trade before trying to trade. Basically, they either wing it, or think they know what they are doing without objectively determining their skill level. If new traders can get the dollar signs out of their eyes and focus on developing their trading skills in a stress free, fun environment, they will be off to a good start. I encourage new traders to ‘paper trade’ first, so that they can practice their trading...

Michael Patak · Dec 30, 2011

Trading is hard work. Becoming a profitable trader is even harder. So how can traders move from average to successful? I’ve found the best way to help those completely new to trading is to explain the amount of time and dedication required to become a profitable trader with sports analogies. For instance, in baseball if it’s the first time you experience a 100mph fast ball, you’re going to swing and miss. But if you’re dedicated, work hard and practice, you’ll be able to anticipate the 100mph pitch and knock it out of the park. The most successful athletes work hard and constantly seek out ways to improve their performance, and those same principles apply to successful traders. As a trader with more than 10 years of experience on the...

Sam Seiden · Oct 14, 2011

Not long ago, I was spending time with a friend of mine who I have been close with since we were children. For years, anytime my career comes up in conversation, he insists that trading is nothing more than gambling. I actually get this question from others at trading events as well. It is a very hard question for me to answer because I think the whole question is wrong. Whether you are a trader, gambler in a casino, Pepsi buying advertising space on a network, retail store owner, casino, car dealer, franchise owner, street vender, someone who buys and sells things on eBay, and so on, YOU ARE A SPECULATOR at some level. The trader takes on risk in a market for a potential reward. The gambler risks a $5.00 chip on the black jack table...

Jim Wyckoff · Oct 23, 2010

I was recently asked about stops and different types of market orders. They were good questions and they reiterated to me the fact that I work with people that range from seasoned trading professionals to those testing the futures trading waters for the first time. One thing I always like to point out to the less-experienced traders: There are no "dumb" questions and there is no shame in being inexperienced. Every single futures trader that ever walked the face of the earth has been inexperienced at one point. This section on types of market orders, including stops, may be a "refresher" feature for the more experienced traders, and will likely be a more valuable feature for the traders newer to this fascinating field. Market Order...

Carley Garner · Oct 23, 2010

The decision to trade online or through a full service broker will undoubtedly make a large impact on your bottom line. However, the impact may or may not be what you had in mind. If you aren't ready to begin placing your orders online on your own, despite saving money on commission it may be the most costly mistake that you ever make. While commission is baggage, a slightly higher rate it may be worth every penny assuming that your broker is truly giving you what you are paying for - reliable and efficient execution along with quality guidance in strategy and analysis. Hopefully this article will open your eyes to the realities of transaction costs. While experienced traders should look for low rates with quality service, novice...

Callum Campbell · Oct 23, 2010

So you want to work in the City? There is no shortage of ambitious young individuals who dream of, and aspire to, a successful career in the City. Images of Rolex-wearing, Porsche-driving twenty-somethings living in their Docklands bachelor pads does nothing to stop the swell of wannabe City Slickers. But just how real are these images? More importantly, how can I get to work in the City, and where do I start? What are the upsides to a career in high finance? What are the downsides? Which are the best markets to work in? What qualifications do I need? Those images born from the movie which made the slick-haired Gordon Gecko famous have undoubtedly created one major drawback for any ambitious young individual wanting to work in the...

Carley Garner · Feb 12, 2010

Aside from charting tools and market research, there are two important but often overlooked decisions for a trader to make; choosing a brokerage firm and a specific broker. Each of these decisions are capable in having a profound impact in your overall trading results and you owe it to yourself to take the time to make an educated judgment. Choosing a brokerage firm Deciding on a brokerage firm is a significant decision and shouldn't be taken lightly. Before committing to a firm it is imperative that you research their services, experience, trading platforms and commission structure but more importantly whether your trading style and personality will be compatible. For example, a beginning trader shouldn't look to a deep discount...

Alan Rich · Nov 19, 2009

PM: = Paul Mullen (Interviewer) AR: = Alan Rich (Stock Trader, Coach & Mentor) You can listen or download this interview by clicking this link: Alan Rich Interview mp3 PM: Hello to everyone from Trade2Win, this is Paul Mullen. I've today got Alan Rich with me and we're going to be talking about trading, probably NASDAQ stocks more than anything else. Alan is a coach and a mentor and has been trading a long time. He has his own website and you can contact him there, at www.alanrichtrading.com. We'll be talking today about what's going on. A warm welcome to Alan. I'm glad that you've agreed to do this and I'd just probably like to ask you the first question, and that is why is it you trade NASDAQ stocks? AR: I think I've been trading...

Don Dawson · Jul 6, 2009

Through my years of trading, one thing I have found is that one strategy does not fit all. We all have different risk tolerances and monetary goals. One of my goals in each E-mini Futures class I teach is to show the students a strategy and have them take it home and use it as a foundational starting point for defining their own strategy. My style is to follow the trend and enter on pullbacks. You could call this style Intraday Swing trading. This works for me because it fits my personality, patience and discipline. I understand that trading is a business dealing in probabilities and that it takes a series of trades to make a trader, not just one or two trades. However, with that said, not everybody trades like me. Of course, that is a...

Malcolm Pryor · Aug 4, 2008

In order to be a successful trader - and not fall into the trap of so many - it is important to take good advice and remember that, sometimes, others do know best! Here are the Top 10 tips for successful trading. Follow them closely (or at least to an extent) and you should stand a good chance of becoming an accomplished spread bettor. ALWAYS stay in control Winners are always in control; both mentally and emotionally. Losers aren't. Losers are sometimes guided by emotions - This will lead to you making bad decisions! 'Plan the trade, trade the plan'. Always stick to the original plan. Deviations will invariably lead to an error. Take responsibility for results Winners are can sometimes lose! But most of the time they win and...

John Person · May 22, 2006

The author of A Complete Guide to Technical Trading Tactics: How to Profit Using Pivot Points, Candlesticks & Other Indicators, looks at a candlestick formation that can indicate reversal points when used with pivot points and support/resistance levels. There are many trading methods one can employ to actively trade including various mechanical trading systems and manual trading tactics. The constant changing of market conditions can require system traders to adapt and update the parameters for the trading decisions. I often prefer the hands on visual approach which is more of a manual method while employing mechanical risk management techniques. The visual approach is aided by the use of candle charts. The draw back is one must have a...

Alan Farley · Feb 27, 2006

I get more questions about stop losses than about any other subject. Clearly this strategy causes traders a lot of pain and confusion. Some of it stems from the schizoid nature of our modern markets. But most of it reflects an underlying weakness in trade management skills. What takes place at the end of a trade usually reflects decisions made at the beginning. In other words, the best entries usually lead to the most profitable exits. This is the most urgent wisdom I can give when it comes to stop-loss placement. We can spend hours deciding whether a stock is a good buy or a good sell, but this emphasis is often misplaced. Over time, carefully chosen exits are more important than great entries. You don't believe me? Just ask all...

Alan Farley · Oct 13, 2005

Do you have trouble pulling the trigger? If so, you're not alone. Greed and fear exert a powerful influence when the time comes to enter the trade. This is especially true for newbies who have great difficulty visualizing the rewards or risks they're about to incur. Effective trade entry requires skill, confidence and a strong stomach. Most of the time it should be an uncomfortable experience; no one likes to lose money. But the ability to follow a disciplined entry plan, even when it hurts, separates profitable traders from the hordes of losers who take up the game. I receive dozens of questions each year from frustrated traders who aren't sure when to be in or out of positions. I've compiled the best ones here today, along with...

Vadym Graifer · Sep 19, 2005

Numerous discussions of paper trading, and its value as a learning tool, usually see participants divided into two camps. One claims total uselessness of paper trading, another vows never to start without it. The scoffing camp points out the obvious limitations of paper trading: It doesn't allow you to estimate slippage during your execution. It leaves unanswered the question of whether your order has a chance to be executed at all. It keeps you in a relatively relaxed state of mind as there is no pressure of endangering real money. It also doesn't allow you to master your order routing tools in full. Finally, it's very easy to cheat oneself, changing one's decision after the fact and booking corrected results. Is this all true...

Martin Duncanson · Sep 15, 2005

What is a trading arcade? A trading arcade, proprietary trading group or trading bureaux are some of the commonly heard names for a company that provides risk management, additional leverage, professional software and hardware infrastructure, trading facilities with analyst support and sometimes training and capital backing to traders in return for a share of trading profits and/or commissions. At an arcade, you would typically find a spacious trading room filled with desks: well equipped work area's with high spec workstations, arrays of screens and terminals providing access to market data & depth, quotes, charting, Reuters, Bloomberg, Sky TV and the all important trade execution platform. The name trading arcade probably originates...

Linda Bradford Raschke · Dec 25, 2004

Capturing Trend Days Trend days occur when there is an expansion in the daily trading range and the open and close are near opposite extremes. The first half-hour of trading often comprises less than 10% of the day's total range; there is usually very little intraday price retracement. Typically, price action picks up momentum going into the last hour -- and the trend accelerates. Classic Trend Day - A large opening gap created a vacuum on the buy side. The market opened at one extreme and closed on the other. Note how it made higher highs and higher lows all day. Also, volatility increased in the latter part of the day--another characteristic of trend days. A trend day can occur in either the same or the opposite direction to the...

Articles

Show only:

Swing & Position Trading Technical Analysis Day Trading & Scalping Using Fractals: A Guide for Traders

Swing & Position Trading Day Trading & Scalping Scalping vs Swing Trading

Swing & Position Trading Day Trading & Scalping Stop-loss or stop-limit order: – Which order to use?

Swing & Position Trading Day Trading & Scalping What It Takes To Become An Elite Trader

Swing & Position Trading Day Trading & Scalping Is High-Frequency Trading (HFT) A Fancy Term For Cheating?

Swing & Position Trading Day Trading & Scalping Do Trades Keep Losing? – 5 Things You Might Be Doing Wrong

Swing & Position Trading Day Trading & Scalping Are You a Trend Trader or a Swing Trader?

Swing & Position Trading Day Trading & Scalping The Pros & Cons of Day Trading Vs Swing Trading

Swing & Position Trading Day Trading & Scalping The Best Technical Analysis Trading Software?

Swing & Position Trading Day Trading & Scalping Binary Illusions

Swing & Position Trading Day Trading & Scalping The Advantage Of Intermarket Analysis

Swing & Position Trading Day Trading & Scalping Trading As A Business

Swing & Position Trading Day Trading & Scalping Why Back Testing is Better than Forward Testing

Swing & Position Trading Day Trading & Scalping Where Traders Go Wrong: 5 Reasons Why Traders Fail

Swing & Position Trading Day Trading & Scalping Five Characteristics of a Successful Trader

Swing & Position Trading Day Trading & Scalping Is Trading Gambling?

Getting Started Swing & Position Trading Day Trading & Scalping Different Types of Market Orders: Using Each for the Best Fills

Swing & Position Trading Trading Systems Day Trading & Scalping Full Service or Online Broker?

Swing & Position Trading Day Trading & Scalping A career in the City

Swing & Position Trading Trading Systems Day Trading & Scalping What You Need to Know About Choosing a Broker

Interviews Swing & Position Trading Day Trading & Scalping Interview with Stock Trader Alan Rich

Getting Started Swing & Position Trading Day Trading & Scalping What Style of Trader Am I?

Getting Started Swing & Position Trading Day Trading & Scalping Top Ten Tips for Traders

Swing & Position Trading Technical Analysis Day Trading & Scalping The High Close Doji Trigger

Money Management Swing & Position Trading Day Trading & Scalping Stop Loss – Q&A

Swing & Position Trading Day Trading & Scalping Pulling the Trigger Q&A

Psychology Swing & Position Trading Day Trading & Scalping Paper Trading: Waste of Time or Valid Learning Method?

Swing & Position Trading Day Trading & Scalping Trading Arcades

Swing & Position Trading Technical Analysis Day Trading & Scalping Capturing Trend Days