One of the best ways to make money on the Street is by spotting excessive bouts of fear and greed.
In fact, that’s how some of the most famous investors made their money.
In short, they were buying when others were scared, and selling when others got too greedy. They were exploiting the very psychology of herd mentality.
And we can do much of the same.Read More
When it comes to technical analysis, admittedly there are some odd names.
The abandoned baby bottom, the doji cross, and even the hanging man are some of the oddest. But they’re also some of the most powerful indicators known to technical traders because of how often they’re used to make trading decisions.
Another oddly named, but powerful indicator to be well aware of is The Ichimoku Cloud, which displays support and resistance, momentum and trend all in one chart.Read More
Every trader wants to have the ability to identify trends and determine their relative strength.
It’s what allows us to find trades with momentum, which in turn increases our odds of a favorable outcome. Unfortunately, gauging the strength of a trend isn’t always easy.
Then again, that really depends on the technical indicators that you choose to use in your strategy. Here are three simple tools you can use.Read More
To the average trader, candlestick patterns are a bunch of crosses and odd shapes with bizarre names, like the three black crows, or the abandoned baby bottom.
But as odd as they may sound, they can provide powerful insight into direction.Read More
When Munehia Homma first created candlestick charts in they 1700s, he had no idea it’d change the way we look at stocks 300 years later.
To him, candlestick charting was meant for the rice trade.
He’d record the opening day’s price of rice, the low and the close. And over time, he’d begin to see price patterns in his recordings, mapping out repetitive signals in the price bars. He’d soon give them names, like spinning tops, dojis, and hanging man – candlestick names we still use to this day. The discovery of such patterns helped him successfully predict future direction of rice prices, giving him a significant advantage over other traders.Read More
Every time you trade a stock, it’s essential that you understand the psychology of the buyers and seller. If not, you begin to run the risk of losing money.
That’s the last thing any of us want to do.
So, we need to understand if the bulls have gotten ridiculously, and unsustainably bullish. And we need to understand if the bears have begun to lose their minds after a sell-off.Read More