The Mindful Discipline of the Medium-Term Trader
Before I opened my first brokerage account, I had the fortune of coming under the wing of mentors who drilled into me the critical importance of cutting losses.
Adjusting Stops For Volatility
As an intermediate-term trader, Iprefer to use a fixed initial price stop of 5% when I buy into a new position.This simple mechanism allows me to keep the majority of my positions at the samedollar value on entry. However, theres no reason that anadvancing stock has to obey my 5% rule. If I believe
My Favorite Warning Signs of Climax Tops
You dont need to be an options traderto take advantage of extremes in crowd sentiment. The climax run represents acritical selling stage where the trader can sidestep steep losses and lock in arare windfall before a highflier breaks apart.Climax runs occur in stocks that have already recorded exten
How To Find Ascending Bases That Lead To Powerful Advances
In a choppy market, leadership stockssometimes act like runners on base. The player leads off, is forced back when the pitcher throws to first, then steals second andleads off again. When the next batter up blasts one for the fences, the man atsecond explodes, rounding third base, then slides home.T
What Are Exchange Traded Funds?
When most people think ofstock funds, they think of mutual funds. But a new class of stockfunds are growing in popularity, thanks to powerful advantages thatdeserve your attention.Exchange-traded funds offerthe diversification of index mutual funds by spreading your investeddollar among the stocks
Using Weekly Charts To Detect Stealth Buying
Pretend that you run a mutual fund with $1 billion in assets. You want to put just1% of that money to work in the stock of a publicly traded company. That amounts to$10 million worth of stock.You cant just leap into the market and buy all those shares in one gulp. In allbut the biggest companies, t
Want To Cut Risk But Still Capture Big Moves? Try ETFs
The pattern trader wants volatility — one-sidedvolatility, that is. Buying off breakouts and pullbacks, we wantprice to spike upward.When we short, we want downward price volatility. But what if you playexchange-traded funds? Exchange-traded funds that track broad indexes dont produce the explosi
Selecting And Trading Turnaround Stocks
I confine most of my long trades tostocks with track records of stellar earnings growth. Thisdiscipline has paid off for many an intermediate-term momentum trader. However,I part from the script for two special situations.Exception #1: The company underlying the target stock undergoes a positive tur
The Psychology Of Chart Patterns
More than once, finance profs havetold me that chart patterns dont work. After all, why should the market obeya chart pattern?This misses the point about patterns.Patterns dont dictate to the markets. Human collective behavior dictates to themarkets. And as a species, human beings act today just w
Return On Equity: How I Use It To Find Stocks With Fuel To Keep Rising
Im a trader, not a quant. I buy offprice-and-volume signals, not valuation metrics. But the intermediate-termmomentum trader still targets companies with fundamental traits most likely todrive cash into, or out of, stocks.For bullish trades, the primefundamental trait is earnings growth. But some l
Using Inverted Cup-With-Handles To Identify Shorting Setups
Traders have long known that manybuy-side chart patterns can be inverted totime short entries. For even better results, weve also learned to turn the fundamental picture on its head as well: weak or deteriorating corporate performance for shorts vs. strong or improving fundamentals for longs.The me
Want To Cut Risk But Still Capture Big Moves? Try ETFs
The pattern trader wants volatility — one-sidedvolatility, that is. Buying off breakouts and pullbacks, we wantprice to spike upward.When we short, we want downward price volatility. But what if you playexchange-traded funds? Exchange-traded funds that track broad indexes dont produce the explosi