A diagonal spread, also known as a time spread, may be a strategy you would like to implement into to your trading arsenal. Today we will discuss how a diagonal spread is created. We will also discuss some of the advantages and disadvantages of a diagonal spread. A diagonal spread is a strategy which occurs when two options are bought … [Read more...] about What is a Diagonal Spread or Time Spread?
The Stochastic Oscillator was developed by George C. Lane in the 1950's. It is a momentum indicator that shows the location of the underlying's close relative to its range of the highs/lows over a set number of periods. This indicator follows the speed or the momentum of the price of the underlying. The Stochastic Oscillator will be … [Read more...] about Technical Indicators 101 – The Stochastic Oscillator Part I
This week's article will be an overview of what is a broad subject; technical indicators. Subsequent articles will cover some of the more popular indicators in detail, but we will cover the basics to start. Many traders use technical indicators to some degree to help them in their market analysis and trade management. Technical … [Read more...] about Technical Indicators 101 – An Overview
Have you heard of the Death Cross and the Golden Cross in your trading career? These two crosses occur when the 50-period simple moving average crosses through the 200 simple moving average. Read on and we will explore these two terms in trading. First we must review moving averages How can moving averages help you as a … [Read more...] about Death Cross and Golden Cross Signals – What are they?
A trading curb, also referred to as a "circuit breaker" is a mechanism to help prevent the market from crashing during extreme volatility. When they are triggered, circuit breakers either halt trading for a certain period of time, or close the trading day early to allow investors and market makers to assess their positions and make … [Read more...] about What is a “Trading Curb” or “Rule 80”?
Range bars can be an alternative to time based charts. Time based charts are based on a particular time period such as 5 minutes, 15 minutes, one hour, 4 hours, daily, etc… Each time based chart will produce a set number of bars which corresponds to the timeframe selected. For instance, from 9:30 to 10:30 in the morning, a 5 minute chart … [Read more...] about Range Bars: An Alternative to Time Based Charts
I've written several articles over the last year about the importance of keeping a trading journal. Besides helping you analyze your trading business, its successes and losses, certain patterns will also manifest themselves as you review your journal. Most traders do not have 10 different patterns that are problematic. Rather, he/she … [Read more...] about Old Problem Patterns – Do They Affect Your Trading?
What is an ETF? To state it simply, Exchange Traded Funds (ETFs) are funds that track indexes such as the S&P 500, NASDAQ, Dow Jones, Russell 2000, etc. When an investor buys shares of an ETF, they are buying shares of a portfolio that tracks the yield and return of the related index. ETFs have been around since the early 1980s, … [Read more...] about A Little About ETFs
Have you ever heard someone say "The VIX futures are in contango"? Or, maybe you have heard someone say "The VIXfutures are in backwardation". Today we will be discussing a little bit about contango and backwardation. This will give you some knowledge about the meaning of these two terms. In general, contango occurs when the near term … [Read more...] about Contango and Backwardation
Bollinger Bands are a technical indicator created by renowned technical trader John Bollinger in the early 1980's. There are numerous publications, as well as John's website www.bollingerbands.com, that go into great detail on this popular tool used by many traders. This article will touch on the basic parameters of Bollinger Bands and … [Read more...] about Technical Indicators 101: Bollinger Bands in a Nutshell