A step by step guide to become a profitable trader in stocks, forex, options & futures
Learn basic and advanced trading concepts & strategies in a simple and clear step by step way, that will make you a profitable trader in stocks, forex, options and futures.
How to spot the beginning of a new trend
An uptrend can be defined as two consecutive higher lows and higher highs. So, if we have spotted an already existing uptrend then we expect that after the higher low there will be a higher high. Failure to accomplish the expected higher high is an indication of weakening…
Swing trade based on descending triangle
To trade a descending triangle first of all you must spot one that is clear formatted. The clear formation of the upper line is more important than the clear formation of the lower line. In case that the upper line, which is basically the trendline in a downtrend, is not clearly defined then…
How to predict market direction with candlestick patterns
Careful study of candlesticks patterns on a market chart (SPY or S&P 500), can provide high probability signals relatively to the direction of the market. Below we will study ETF SPY chart from October 2011 until June 2012 and demonstrate that many times candlesticks patterns signaled with accuracy short term reversals…
A way to measure the strength of a support/resistance
Supports or resistances can differ greatly in power. Generally they express an imbalance between buyers and sellers and the greater this imbalance is, the more powerful a support or a resistance will be (the more likely it is to hold). The main criteria to quantify a support or resistance power is the…
A very simple trading strategy
A very simple trend following strategy which works in all time frames (day & swing trading) is to open long positions when the price of a financial instrument (currency pair, stock, future,) is visiting a clear trend-line after a correction, just like in the daily chart of…
How to apply the reversal strategy
Many traders aspiration is to enter a long or short trade in the very beginning of a new price movement. The reversal strategy attempts to capture this unique point where the price will reverse and start a new counter trend. In order to gauge the turning point we can use support and resistance as also candlestick patterns in order to enter a low risk …
A simple option strategy to profit irrelevantly of market direction
When we are expecting a big price move to take place but we don’t know at which direction, we can apply a simple options trading strategy with limited risk and unlimited profit potential. A straddle is the simultaneous buying of the same number of calls & puts options…
Two high probability trading set ups
There are two high probability trading set ups and two trading set ups that offer low chances of success, although all of them can be traded. We strongly suggest trading only in high probability set ups. In the context of an up trending market, we can open a long position in an up trending stock when…
How to protect a short position from a gap up using call options
Short positions in stocks have theoretically unlimited risk. A way to protect ourselves from a steep upward move or a gap up when we already have a short position is the protective call strategy which involves the buying of a…
Stocks trading
We focus stocks trading on US exchanges and mostly NASDAQ, NYSE & AMEX. The US market is the most liquid, competitive and mature market worldwide and it provides the ability to short sell stocks in order to be profitable in bear markets.
Risk management
Without strict risk management rules, which must be applied in all cases, loss of initial capital is just a matter of time. Placement and active management of stop orders and capital allocation are essential. Risk management can also make a trader with only 30% profitable trades to have positive returns.
Futures
Futures can be used for hedging or speculation. By providing leverage someone can control a position 5-30 times greater than their cash balance. In US market there are futures in high capitalization stocks, indices & commodities. One of the most traded futures is E-mini with underline asset the S&P 500.
Candlesticks patterns
An important criterion in profitable trading is candlestick patterns. They must be used in combination with other important criteria. There are about 10 most common candlesticks patterns (bullish/bearish engulfment, dark cloud cover/piercing line, hammer/inverted hammer, harami etc).
Options basics
Options are used for hedging (protection against risk), when we already have an open stock position. There are two classes of options, calls & puts, in which someone can profit from, even if the price of the underline security remains unchanged.
Options strategies
Beginning from the most simple option strategies like buying a call or a put, we analyze with examples the more complicated like the iron condor.We also refer to important parameters closely related to options prices like the Greek letters or sensitivity factors and implied volatility.
Forex trading
We analyze basic concepts that you should know before engaging in currency trading. The factors affecting forex trading are less complicated than in options or stocks markets. Also, due to the fact that forex market remains open 24 hours a day the danger price gaps reduces greatly.
Trading log
Under the tab MarketViewer we publish some of our trades and we explain in a clear manner the decision making process in order to open and close the position. This is the blog of this site where most recent articles, market analysis, strategies and more others are published.
En
Gr