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What Really Works for Technical Traders
By
phantom, in Technical Analysis
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By David Carter
My broker (Jones Mutual) advised me to use candlesticks when CFD trading, as the simple line graph option does not give you enough information - is this correct?
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By inthemoneystocks
One of the most important reasons why traders take big losses is because they often fail to recognize when a trade has gone wrong. You see, stopping out of a trade is probably the biggest fault of traders and investors. Often, this happens to young and inexperienced traders and investors, but I know many veteran traders and investors that struggle with this as well. Early in my own career I struggled with stopping out of a bad trade myself, so I can sympathize with this problem.
The problem with taking a loss is really two fold. First, the trader has to admit that he is wrong. As you all know, as human beings we all hate to be wrong. The ego simply gets in the way and we all want to always be right all the time. The first secret in this business is to check the ego at the door. The market does not care about your the color of your skin, religion or anything else. It will move in the direction of the money and that is the bottom line. Once a trader or investor goes into what I call 'hope mode' the trade is over. I'm sure everyone has been in this position at one time or another. Simply put there is no room for ego or hope in the stock market. The market is always right and there is no reason to fight it.
Here is the second problem with taking a loss, it hurts. Pain and pleasure are the two reasons why humans do anything at all. As a human being, we are always looking to have pleasure and avoid pain. Well, losing money is painful and many people would rather simply hold a losing equity than lock in a small loss and move on. I cannot tell you how often I see a trader hold a losing trade only to see the position move further out of the money. Many years ago I watched a day trader blow up a $200,000 account in a single day averaging in on a bad day trade. To this day I can remember the look on his face as his money vanished in thin air. Believe it or not, this trader could have exited the position with a $500.00 loss, but instead he kept averaging in and fighting the position until he was wiped out. As a rule, once you have your full position you should never average in on a trade. At that point, it is critical to know where your max loss is going to be and stop out if that level is breached.
Now when should we stop out? The answer to this question is not that simple, but here is what I personally do. I always place my stop loss below an important breakout or pivot on the chart. You see, prior breakout or pivot levels are usually defended when retested. After all, this is usually an area where institutional traders and investors got involved, that is why there is a pivot low or high on the chart to begin with. If that level is breached on a closing basis then I will move out of the position. So If I took a trade based on a daily chart pattern then I will usually check the daily and weekly chart levels. If there is a major pivot on the weekly chart then I will use a week chart close as my stop out level. While this method may not be perfect, it has saved me from much bigger losses when I have been wrong.
Nicholas Santiago -
By LindsayBev
Hello! I am new to this forum. I am interested in learning about candlestick reading. I would appreciate hearing from any that will answer this post WHICH book you found the most helpful?
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By Stocks4life · Posted
NFLX Netflix stock, nice move, hit target 1, https://stockconsultant.com/?NFLX -
By Stocks4life · Posted
NBIX Neurocrine Biosciences stock range breakout watch, https://stockconsultant.com/?NBIX -
By Stocks4life · Posted
RTX stock, nice close with a flat top breakout above 102.77, https://stockconsultant.com/?RTX -
By HFblogNews · Posted
Date: 8th May 2024. Market News – Stocks mixed; Yen support still on; Eyes on NFP & Apple tonight Economic Indicators & Central Banks: As the Fed maintained a “high-for-longer” stance, stocks gave up their gains with attention turning back to earnings. Chair Powell and the Fed were not as hawkish as feared and the markets reacted immediately and in textbook fashion to the still dovish policy stance. The Fed flagged that recent disappointing inflation readings could make rate cuts a while in coming, but Fed chief Jerome Powell characterized the risk of more hikes as “unlikely,” giving some solace to markets. Stocks traded mixed across Asia, while in Europe, DAX and FTSE futures are finding buyers and US futures are also in demand, after the Fed’s message. Yen: Another suspected intervention by authorities, this time in late New York trading, ran into resistance from traders keen to keep selling the currency. Swiss CPI lifted to 1.4% y/y in April from 1.0% y/y in the previous month. Headline numbers are still at low levels and base effects play a role, with the different timing of Easter this year also likely to distort the picture. That said, the numbers may not question the SNB’s decision to cut rates, but they do not support another rate cut in June. Financial Markets Performance: The USDIndex has corrected to 105.58, but USDJPY is already inching higher again, after a sharp drop to a low of 153.04 on Tuesday that sparked fresh intervention speculation. The pair is currently trading at 155.38. Treasury yields plunged and were down over double digits before profit taking set in. USOIL finished with a -3.6% loss to $79.00, the lowest since March 12. Currently it is as $79.53. Gold was up 1.4% to $2319.55 per ounce, reclaiming the $2300 level. Market Trends: Wall Street climbed initially with gains of 1.4% on the NASDAQ, 1.2% on the Dow, and 0.96% on the S&P500. The NASDAQ and S&P500 closed with losses of -0.3%, while the Dow was 0.23% firmer. The Hang Seng rallied more than 2%, and the ASX also posting slight gains, while CSI 300 and Nikkei declined. Apple’s earnings report is due after the US market closes today, will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission. -
By HFblogNews · Posted
Date: 7th May 2024. Dow Jones Close To 1-Month High, Eyes on Disney Earnings. The stock market trades at a 3-week high after significant support from the latest earning reports and US employment data. Economists continue to expect a rate cut no earlier than September 2024 despite the US unemployment rate rising to 3.9%. The US Dollar Index trades higher on Tuesday and fully corrects the decline from NFP Friday. Dow Jones investors wait for Disney to release their latest quarterly earnings data. The stock holds a weight of 1.93%. USDJPY – The US Dollar Regains Lost Ground The USDJPY is an interesting pair on Tuesday as the US Dollar is the best performing currency within the market while the Yen is witnessing the strongest decline. Investors will continue to monitor as we enter the European Cash Open to ensure no significant changes. The exchange rate has been declining since the 29th of April when the Japanese Government is believed to have intervened and strengthened the Yen. However, the US Dollar has been gaining over the past 24 hours. During this morning’s Asian Session, the exchange rate trades 0.44% higher. Currently the only concern for the US Dollar is the latest employment data which illustrates a potential slowing employment sector. However, investors are quick to point out that this cannot be known simply from 1 weak month. This is the first time the NFP data read lower since November 2023. No major data is in the calendar for the next two days which can influence the US Dollar. Despite the weaker employment data and lower wage growth, investors continue to predict a rate cut no earlier than September 2024. This is something which can also be seen on the CME FedWatch Tool, which shows a 34.3% chance of rates remaining unchanged in September. In regard to the Japanese Yen, most analysts expect the next rate increase in the second half of this year depending on a stable movement of inflation. In addition, investors are monitoring the actions of financial authorities, expecting new currency interventions from them against a weakening Yen. This is the main concern for investors speculating against the Yen. However, economists continue to advise the Yen will struggle to gain even with a small rate hike, unless the rest of the financial world starts cutting rates. USA30 – Investors Turn To Disney Earnings Data! The Dow Jones is close to trading at a 1-month high and is also trading slightly higher this morning. The index recently has been supported by the latest employment data which indicates a higher possibility of rate cuts by the Fed. Today investors focus on the quarterly earnings report for Disney. Disney stocks are trading 0.37% higher during this morning’s pre-trading hours indicating investors believe the report will be positive. So far this year the stock is trading 28.40% higher and is one of the better performing stocks. Yesterday, the stock rose by 2.47% but remains significantly lower than its all-time high of $197. Currently analysts believe the earnings data will either be similar to the previous quarter or slightly lower. If earnings and revenue read higher, the stock is likely to continue rising. The stock is the 22nd most influential stock for the Dow Jones and will only influence the USA30 and USA500, not the USA100. Currently, technical analysis continues to indicate a strong price sentiment. The price trades above the 75-bar EMA and above the VWAP. In addition to this, the RSI is trading at 68.11 which also signals buyers are controlling the market. The only concern for traders is retracements. A weaker retracement could decline to $38,703, whereas a stronger retracement can fall back to $38,571. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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