Traders normally have two main end goals: capital appreciation and cash flow. Capital appreciation trading is geared toward compounding gains over the long haul in order to increase wealth. The intent of cash flow trading is to attempt to capture numerous small moves within larger trends—what I call “milk money” trading. If you’re going to […]

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Relative Strength Index may hold clues for the end of a trend. Growing up in the Midwest, kids learn very quickly the difference between a tornado watch and a tornado warning. A watch means that conditions are right for a tornado to form, but one hasn’t been spotted yet. A warning means head for the […]

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Over the years, I’ve worked with a lot of investors trying to create technical trading systems. The Commodity Channel Index (CCI) is one that many try to incorporate into their trading. But as they change the indicator’s settings, like Goldilocks’s porridge, the experience feels either too hot or too cold. A lot of times “just […]

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It’s a mouthful. But the Moving Average Convergence Divergence chart indicator can help place you on the right side of critical changes to a stock’s price. Fashion trends change all the time. Adopting a new trend too soon, or too late, can result in some awkward moments. Think of that poor parachute-pants pioneer, or worse, […]

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When you compete, it’s typically a good thing to be the last person standing. But in trading, the last person standing is the greater fool because the psychology of greed and fear continually play out by missing bottoms and buying tops. If you can relate to this, you may find adding market-breadth indicators into your […]

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Chart-reading might seem overwhelming to the new trader, given the myriad systems and signals you can plaster all over a typical chart. How many indicators are too many or too few? Finding just the right recipe can help you accomplish three key things. Diving into technical analysis could be likened to a trip to your […]

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Volatility may not tell you which way is up, but it can point to possible trading signals. Let’s create a thinkScript® in TD Ameritrade’s thinkorswim® trading platform that uses Bollinger Bands to simultaneously analyze price and implied volatility to generate possible trading signals. Our goal? Let’s have thinkorswim color a price bar a different color when the […]

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The formation of a market turning point—particularly longer-term tops and bottoms—is a process, not a one-time, single-day event. But all too often, traders find they’ve pulled the trigger too soon, or too late, to take full advantage. It’s important to not only identify trends, but also understand the stages of change that markets often go […]

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There is beauty and symmetry in nature. There may be clues to the markets, as well. So-called Fibonacci numbers, a favorite among many technical traders, apply numeric sequences and ratios to help ascertain price targets and offer a sense of whether a market move has run its course. The system takes its name from Leonardo […]

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Technical trading is neither new nor stylish. Technical analysis had been in use for more than 100 years in Asia and Europe before that historic event on May 17, 1792, when 24 brokers gathered beneath a buttonwood tree on the avenue Dutch settlers in the New World called “de Waal Straat” and inked the agreement […]

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