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Author: TradingMarkets Editors

Q: It takes hours for me to scan through my charts each night looking for setups. Are there shortcuts to speeding up that proces

A: After years of charting, it is now automatic. It’s like looking in a photo album for familiar faces. Over time, you get a feel for what looks good or bad — what’s breaking down or out, or stocks setting up. It just takes time to get used to it. I always look at yearly charts, but also five-year charts as well. It is about recognizing certain patterns. The first thing I do is cross out charts that have no pattern to them. Secondly, I isolate stocks that are breaking down. This gives me a good idea about the market. The more stocks that break down, the worse the outlook I would have. I then look for setups that are basing and have a chance to break out. Lastly, for stocks that are breaking out, it’s all about pattern recognition. Time will take care of you becoming faster at it. I remember when I spent hours each weekend looking at Daily Graphs. Now I run through them in 1-2 hours. Keep studying what a good chart looks like, as well as the bad, and keep at it. This is my best advi

Q: Is it ever okay to use mental stops?

A: Generally speaking you should always use stop-loss orders or some kind of
well-defined exit.

However, if you are an experienced trader, you can place your
stop-loss farther away from the price action, with the intent of using a mental
stop to exit. Then, as a general rule you could watch the price action and and
try optimize your exit using a mental stop along with your good judgment. This allows
you to react quickly to price patterns you see unfolding, while having the
stop-loss order as a safety net.

Q: In the context of the markets, what exactly is momentum and how can traders benefit from it?

A: You’ve heard that the "trend is your friend." The term
"momentum" describes the strength of a trend or the likelihood that the trend
will continue. Finding a high-momentum market is a great advantage for those who
like to trade in short-term time frames i.e. swing traders and day traders. Here
are couple of approaches that can provide an edge:

  • High ADX. Some traders look for a stocks that have
    a ADX reading of 30 or higher. Looking back at history, these stocks tend to
    resume their trends after pulling back.

  • Stocks trading above their 200-day moving average.
    Stocks trading above their 200-day moving average behave differently from
    those that are below the their 200-day moving average. Historical research
    shows that there is a upward bias for stocks in the U.S. stock market.

Turn options risks into rewards

There is a very simple reason why many investors feel that options are too risky an investment to trade…

Q: I have been using candlestick charts for intraday trading on a three-minute time. What confirming indicators should I use wit

A: Regardless of the entry or exit triggers you may currently be using, it is
always essential to get multiple confirmations from a variety of indicators
before making any kind of trading decision. Ideally these confirmations should
come from non-correlated sources.

For example, if your favorite candlestick pattern is telling you that a
potential buy-entry is forming, you should see whether there some kind of
consensus agreement from other factors. Ask yourself: Is the overall market in
an healthy uptrend? Is the stock within an industry group that is in a strong
uptrend? If the answer is “yes”, then is the stock you’re considering one of the
leaders within that industry group? Is the stock trading above its 200-day
moving average? Is the stock pulling back to a recent low where it might find a
support? Do you have a favorite oscillator such as RSI that is moving in to
oversold territory? Are there any pending announcements that the company might
make i

Monday’s Scan From TradingMarkets

This morning, on theTradingMarkets.com stock scanner, I ran a scan for all gold stocks that have an EPS ranking of > 90, an ADX of > 25, and are trading above their 50- and 200-day moving average. I came up with four stocks  The first stock, Cambior Inc. (CBJ), is shown below.  The stock just

What Do These 4 Gold Stocks Have In Common?

The following four gold stocks have an EPS ranking of >90, are trading above their 50- and 200-day moving averages and are currently in pullbacks:Barrick Gold (ABX)Cambior (CBJ)Glamis Gold (GLG)Goldern Star (GSS)Stocks were found using theTradingMarkets.com Stock Scanner.