We run down the essential day trading candlestick and chart patterns every new trader should learn to recognize

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The market is a creature of repetition. Day in, day out traders spot common patterns in candlesticks and the stock chart to help decode price action. By learning to identify these candlestick patterns and chart patterns traders can pre-empt future breakouts and trend reversals.

How? Every candlestick tells a story. Every stock chart, a saga. The battle between the bulls and bears. Buyers and sellers. Supply and demand. Fear and greed. Stock charts convey so much information, it’s easy to get lost in the analysis. Identifying patterns in candlestick charts can help cut through some of the noise of price action and reveal signs of future price movements. …


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A routine day in the life of a day trader — You get to work from home, or anywhere you want, so long as you have a reliable internet connection. You have the freedom to do what you want, with nobody around to tell you otherwise. And not even the sky’s the limit to what you could earn.

Sounds pretty good, right?

But aside from the perks, what’s not often talked about is the discipline, preparation, meticulous planning, and execution that goes into trading.

The most successful day traders are ‘professional’. What we mean by this is that they treat trading as a career, even if it’s just their side hustle. …


What should you look for in a good trade? Volume!

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Well, volume amongst other factors. But in any case, volume is a crucial component to a successful trading strategy. Traders will look at volume when deciding whether a trade is worth entering. Volume plays an important role in technical analysis with the most popular volume analysis tool being the On Balance Volume Indicator.

In this article, we will take you through what is the OBV Indicator and how to best utilize it in your trading strategy. However, before we even touch on the OBV trading indicator, let’s first understand why volume is such a critical component of a good trade.

Why is Volume Important in Trading?

Volume is a strong force behind the markets. Technically speaking, it is the measure of how much a financial instrument has been traded in a period of time. For Stocks, this means the number of shares that have been traded. …


The Day Trading Guide

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So you want to be a day trader? Or maybe you’re looking for ways to supplement your income. Regardless of your reason, there is no doubt that day trading is certainly having its day in the golden sun.

Partially sparked by record low-interest rates and people being stuck indoors looking for new ways to entertain themselves and earn profits. TD Ameritrade reports that activity has quadrupled since January 2020 with Robinhood also seeing a huge spike in activity.

But while newcomers may be enticed by the promise of large wins, they’re just as likely to suffer insane losses if they’re not prepared. So what exactly do you need to know to begin day trading? We take you through the important day trading basics in this article so you can increase your chances of ending up green. …


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When purchasing an options contract, a trader is faced with two critical decisions — Which expiration date? And at which strike price? These two decisions have an enormous bearing on whether a trade will be profitable. Choose correctly, and you’ll be seeing green. But pick wrong, and your trade will result in a loss.

In this article, we take you through the basics of option strike prices and the factors you should consider when entering a trade.

What is an Option Strike Price?

We’ll preempt our discussion on selecting strike prices by going over options basics. If you already have a solid foundation of stock options knowledge, feel free to skip ahead, although it doesn’t hurt to brush up on the nuts and bolts. If you’re just starting out or need a refresher, you may want to consider checking out The Basics of Stock Options and Option Greeks for a more in-depth look. …


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Photo by Billy Huynh on Unsplash

Ichimoku Cloud is a versatile technical analysis indicator rapidly rising in popularity among traders. Also known as Ichimoku Kinko Hyo which translates to ‘one look equilibrium chart’ — this is exactly what Ichimoku strives to be. An ‘all-in-one’ style indicator that incorporates multiple elements from different technical analysis tools. At just a glance traders are able to ascertain future support and resistance, price momentum, and trend direction.

While the abundance of lines and shaded areas can leave traders new to the Ichimoku cloud indicator confused and even a little intimidated. Once you single out and understand each separate element, mastering Ichimoku Cloud is easier than it looks. …


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The Commitment of Traders Report is one of the prime sources of data for many futures and forex traders. You may have even seen the graphs referenced in our Weekly Reports. But what exactly does COT data tell you and how can you use it to improve your trading? We tackle these questions in our latest blog below.

What is COT Data?

Published by the Commodity Futures Trading Commission (CFTC), the Commitment of Traders Report provides a weekly snapshot of the aggregate holdings of the different participants in the futures market. …


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Support and Resistance are the cornerstones of technical analysis and trading strategies. While every trader has their own personal trading style — some prefer naked charts, others rely on moving averages, RSI’s, Fibonacci levels, Ichimoku clouds, or some other indicator — at the end of the day, it doesn’t really matter. Every trader on the planet is paying close attention to key levels of support and resistance.

While the concept of support and resistance is easy enough to understand — identifying and drawing these lines is a much more difficult skill to master. …


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Should you trade options or should you trade futures? It’s a tough question. The answer? Well, that largely depends on your risk tolerance.

While these financial instruments are similar in many ways ..

  • Both are derivatives, meaning they derive value from an underlying asset;
  • Both are about as equally as popular among retail traders; and
  • Both provide unlimited potential for profits.

.. their markets are very very different.

Now we are not saying that you necessarily have to choose between options and futures — many analysts trade both.

However, if you are just beginning on your trading journey, our advice is to focus on mastering one first. Once you understand the market, develop a strategy that works for you, and are consistently profitable — move on to the other. …


What goes around comes around

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If you watch the nightly news, read investment blogs and listen to market channels you will have no doubt heard something along the lines of “We’re seeing a classic sector rotation in the market today”. But what exactly is Sector Rotation? Does it really work, and how can I use it to my advantage. In this edition, we’ll tackle these questions and discuss how you can incorporate sector rotation in your trading strategy.

What is Sector Rotation?

Somewhat of a buzz phrase, sector rotation is simply the transition of money invested from one industry to another as investors take advantage of cyclical trends in the overall economy. …

About

Leah Mathieson

Australian lawyer. Living in Asia. Writing about Law, Finance, Wall Street & Startups. Echelon-1.com

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