Chart Patterns and Swing Trading Tips
Here are some blog posts including my top ten swing trading tips.
Written on 07-08-2006 5:52 pm by Craig
Chart Patterns Revealed
I've been planning a new section on specific chart and price patterns in the Traders Action Zone. Well, I've finally got the main Chart Patterns page (the hub), complete. I also have one pattern done...
and, well...ummm... only about 15 more to go!
It is going to be a busy summer!
Check it out: Chart Patterns
Written on 10-08-2006 5:59 pm by Craig
Starbucks and Stages
Market Club has a new movie out on Starbucks.
(I'm addicted to these movies!)
Adam points out some good reasons about why he thinks this stock is headed lower but I thought I would add my two cents - TAZ style!
First a chart:
Here we have a classic head and shoulders pattern and Starbucks has moved into a stage 4 downtrend. We want to short this stock but how do we get a good entry?
We need a rally! The yellow highlighted circle is where I would like to see a Starbucks rally end up. A nice rally into the TAZ and at resistance right around $33.00 would be a low risk, high odds play on this stock.
- If this stock rallies and
- If we can get a low risk entry, and
- If this stock moves in our favor...
...then consider a trend trade versus a swing trade. This stock could go much, much lower (as Adam points out). You want to capture as much of the move as possible!
There are a lot of "if's" with this stock, but it's worth adding Starbucks to your watch list. It could turn out to be a very good trade.
The only possible downside to this trade is if it starts raining in Brazil!
Written on 14-08-2006 6:21 pm by Craig
Read These Stock Market Blogs
Here are some of the stock market blogs that I read.
Trader X - Trader X is a day trader who trades off of 15 and 30 minute charts using candlestick charts and Fibonacci.
Trading Quotes - This blog features timeless trading quotes from some of the best traders in the world.
Trader Mike - Mike is a "swing trader turned day trader". His blog offers daily market commentary and trading tips.
Market Talk With Piranha - Chris always has original trading commentary and insights into the market. Loads of information here.
The Bull Trader - This blog features stock picks and technical analysis information. Cool charts too!
Geo's Blog - Great blog on momentum based swing trading with stock picks.
Trader Feed - This is probably the most informative blog about trading on the entire internet!
And here is my favorite blog of them all...
Tale of the Tape - Hmmmm... All I'm going to say about this blog is that it offers some of the best pictures of
women stock charts on the net!
Have a good week!
Written on 15-08-2006 10:18 pm by Craig
Top Ten Swing Trading Tips
Are you new to trading stocks?
Hi, my name is Craig, and I would like to be the first to welcome you to the exciting world of swing trading!
I have compiled a list of tips on trading stocks that I think you will enjoy. These tips will put you on the fast track to trading like a pro!
Be sure to tell all of your trading friends so they can make a ton of money also!
Here they are...
Top 10 Ways To Lose All The Money In Your Trading Account In 30 Days Or Less - Guaranteed!
#10 - Put all of your efforts into finding the perfect technical indicator. Once you find this magical indicator, it will be like turning on a water faucet. Go all in. The money will just flow into your account!
#9 - When your technical indicator says that the stock is oversold, BUY IT RIGHT THEN. Always do what your technical indicator says to do. It takes precedence over price action.
#8 - Make sure to visit a lot of stock trading forums and ask them for hot stock tips. Also, ask all your friends and family for stock tips. They are usually right, and acting on these tips can make you very rich.
#7 - Watch what other traders do and be sure to follow the crowd. After all, they have been trading a lot longer than you so naturally they are smarter.
#6 - Pay very close attention to the fundamentals of a company. You MUST know the P/E ratio, book value, profit margins, etc. Once you find a "good company", consider going on margin to pay for shares in their stock.
#5 - Forget about developing a trading plan. If you see a good stock just buy it. Don't worry about when your going to sell. No need to get caught up in the details. Besides, you'll probably get rich the first year of trading anyway.
#4 - Buy expensive computers and trading software. While your at it, buy a couple more TV's so that you can watch CNBC on multiple screens! You NEED all of these gadgets in order to trade stocks successfully. Then watch the money roll in!
#3 - Always follow your emotions. They are there for a reason. If you feel nervous, sell the stock! If you are excited, buy more shares. This is the best way to trade stocks and fatten up your trading account.
#2 - Don't worry about using stop loss orders. When the time comes, you will be able to sell your shares and take a loss. Your emotions won't even come into play. Besides, stop loss orders are for sissies!
#1 - Absolutely, without a doubt, FORGET about managing your money. Don't worry about how much you can lose on a trade. Only think about how much loot your gonna make. Then start planning that trip to Fiji!
Well, there you have it - my top 10 tips for new traders.
This list was easy to write.
I followed them all when I first started trading.
Written on 20-08-2006 9:54 am by Craig
Williams, Fibonacci, McClellan, and Farley
The S&P has bottomed in the short term. But right now, it is quite overbought. We need to work off this overbought situation. This will happen (eventually) in the form of price (the market will pull back) or time (the market will trade sideways).
Here is a chart:
Williams %R is clearly in overbought territory. We need this to get back down below -80. 1280 looks like a good support area should we get a pull back.
The VIX (not shown) is extended beyond its 10 period moving average.
There are five up days in a row. Usually after that many up days in a row, a reversal happens (five is a Fibonacci number).
Bottom line? Manage open positions and get ready to initiate new ones. I imagine we will begin to see some cup and handle patterns developing. That is one of my favorite patterns to trade.
Note: At the bottom of the chart, is the McClellan Oscillator. I've been watching this slowly trending upwards - not believing that the market would actually reverse. If I had to make a living trying to predict market direction, I would go broke!
(Thankfully, predicting market direction, is not necessary.)
Have a great week.
Oh yeah, one last thing:
From Hard Right Edge: "Volume will drop sharply next week as the summer doldrums hit until we get past the Labor Day holiday. Predictability will decline in the paper thin environment and trigger stop gunning games on both sides of the market."
It doesn't sound like Farley will be trading next week!
Written on 23-08-2006 11:15 pm by Craig
Are You Using This Moving Average?
The 200 moving average line is probably the most useful moving average to ANY trader. It doesn't matter what time frame you use, this line provides a great reference point.
I use the 200 MA on all charts in all time frames. Yes - weekly, daily, hourly, and five minute charts.
Here are just a couple of examples on the hourly chart:
First the S&P 500...
You see how the S&P puts in a nice double bottom right at the 200 MA.
Here is Dollar Tree (DLTR)...
Bottom line? If you are not using the 200 MA on charts in all time frames, you could be missing out on some fantastic trades!
Written on 28-08-2006 6:11 pm by Craig
I Give Up Trading Stocks
"I give up trading stocks!"
That's what I said to myself right before I started to make some money in the market.
In the beginning...
I just simply couldn't figure it out. I would make money and then lose it. Up and down. Over and over again.
AND NEVER GET AHEAD.
Finally, I reached my breaking point and came to the conclusion that I was simply not cut out for this. I had it in my head that I was never going to make money in the market. Game over.
So I gave up. Of course I didn't really give up trading stocks. I really just gave up on the seemingly absurd idea that I was ever going to be profitable.
I couldn't actually give up the game of trading. It was too much fun! I was obsessed with it. I loved it. And I was terrified that I wasn't going to be able to play the game anymore if I went broke!
So now, instead of trying to be profitable, I just focused on losing the least amount of money. That way I could continue playing the game that I enjoyed so much for as long as possible! I figured I could continue playing the game for another year or two before my account went to $0.
(I know. It sounds sick and demented!)
The most amazing thing happened. My trading account never went to $0.
Instead it got bigger and bigger! By focusing on losing, I started making money! Who would have thought?
Dr. Brett said that "the stock market is rigged against human nature". That is one of the most significant statements that you will ever read related to the trading.
Are you making money in the stock market?
Then maybe you should give up.
Written on 30-08-2006 2:38 pm by Craig
Great Trader Magazine Articles
There are some great new articles in the latest trader magazines. The two I read are SFO and Stocks & Commodities . Here are just a few articles worth reading.
Trading The Gap - This article goes into detail about trading gaps.
Finding The Value In Losses - This explains the most common mistakes that traders make.
Cascading Time Frame Trading - I'm not a big fan of setting profit targets. However, this is an interesting article on taking profits in multiple time frames.
The Case For New Highs - This article talks about how an alternate wave count could lead us to higher prices.
Trading Wave 3 - This talks about the importance of wave 3 in Elliott wave analysis.
Interview With Thomas Bulkowski - Thomas talks about chart patterns, those he likes to trade - and those he doesn't like. (You'll be suprised!)
Note: His books on chart patterns are a must read if you haven't read any of them already. They provide back testing for each chart pattern from triangles to cup and handle patterns. In the words of Paris Hilton, "That's hot".
You can check them out in the new bookstore.
(I know. That was a shameless plug!)