by Kathy Lien Although risk management is one of the simpler topics to grasp, it seems to be the hardest to follow for most traders. Too often we have seen traders turn winning positions into losing positions and solid strategies result in losses instead of...
by Dan Keen After you have done your research homework, and you have found a company that looks like a good candidate for writing a covered call, it’s time for one final consideration. How much money can you make on the play? We have to look at the option premiums and...
by Lee Gettess One of the questions that always amuses me when I talk about potential entries with other traders is “Well, does it work?” My answer usually involves asking them to define “work”. An entry is only as good as the exit that accompanies it; and...
by Rob Roy Strangles differ from Straddles only by the fact the trade uses two separate strikes rather than the same strikes as in a Straddle. The risk graph below shows what the P&L of a Strangle would be. For the Strangle risk graph, imagine for a moment the...
by Darrell Jobman As that subset of traders known as trend followers, we obviously are on the lookout for “trends”. Of course, how to define or measure a trend is itself subject to some interpretation, but for right now, let’s start with the types of indicators...
by Ray Frazier Moving Average and the Price Chart The following chart has four indicators on it. The chart has three sections, with the top section being the price chart and the bottom two sections indicators. You will notice that there are two lines in the top...
by Andy Chambers Lessons to Learn in Trading by Andy Chambers No matter what tools and methods you use in your trading, there will be plenty of lessons to learn along the way. Here are some things to keep in mind: Don’t mix up your time frames. If your trade is based...
by Jea Yu CPS: Cash Per Share Plays I’m not a big fundamentals guy, as I see a company and its stock as two separate entities. However, there are times when a stock may be considerably undervalued compared to the sector or unto itself due to a fundamental news event....
by Peter McKenna In a general sense, tracking the economy means finding, as accurately as possible, the current state of the business cycle. You must know if it is in a period of expansion or contraction. The best way to get this information is to record...
by Don Wellenreiter Why trade spreads when just being long or short an outright futures contract can be so much more profitable? They can be, but the risk is also much larger. For example, let’s say a trader purchased one July soybean contract at the close on June 9th...