• Last updated 2/17/12 by Gil Oren

Any active trader will always have one window on his screen showing the volatility index (VIX).   The way I have always remembered to use the VIX, is with this simple adage: When VIX is high its time to buy! When VIX is low its time to go!   That may be an oversimplification, but you get the idea. Here is the VIX plotted against the S&P for the past 5yrs.           By Thomas Preston ThinkMoney Magazine Back in the early 90's, when the CBOE's VIX volatility index was first concocted, I was sitting in a class at the University of Chicago GSB... read more

• Last updated 2/19/12 by admin

This article is a continuation from Introductions to options.   Now that you understand the basics, its time to expand upon the definitions and finer points. This may sound complicated at first, but it will sink in after you read it a few times.   The best thing you could do is start "paper" trading (that is pretend trading) with options, it will all fall into place very quickly!   The following piece comes from r/investing contributor Jartek who was happy to share his thoughts with us here:   Options are good for all sorts of things. To list a few... read more

• Last updated 3/1/12 by Gil Oren

What are Chart Patterns? In technical analysis, the distinctive formation created by the movement of security prices on a chart. It is identified by a line connecting common price points (closing prices, highs, lows) over a period of time. Chartists try to identify patterns to try to anticipate the future price direction.   Most common chart patterns:   Head and Shoulders Wedge aka Symmetrical triangle Bull/Bear Flag Double top Double bottom Triple top/bottom Cup and handle Descending channel Ascending channel   Chart patterns will by... read more

• Last updated 2/21/12 by Gil Oren

Short term moving averages are used as lines of reference, or for spotting trends.   Daytraders will use moving averages based on 14dma (14 day moving average) or even 5dma for general trends, they even get down to 5min and 1min moving averages. The chart below has a 100dma and also a 50dma. An interesting thing happens when you put two different time frames together, you get two lines that move around each other. The blue line is a 100dma, you can see how it showing the general trend of the stock. The brown line is a shorter term 50dma, it is more... read more

• Last updated 2/26/12 by Gil Oren

Moving Averages   The most basic of all indicators is the moving average. It is exactly what it sounds like. If your wife spends $100 today, and $110 tomorrow. Her average spending is $105. Stocks move every day, so if GE (General Electric) closed at $30 yesterday, then at $30.50 today, the average over the past two days is $30.25. Now lets stretch this out over say... 200 days, we would get a line showing us the average closing price over that time period. I did not randomly pick 200 days, the 200dma (day moving average) is actually one of the most... read more

• Last updated 2/21/12 by Gil Oren

From Stockcharts.com Chartschool. http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks     Introduction to Candlesticks   History: The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis was different from the US version initiated by Charles Dow around 1900, many of the guiding principles were very similar: The "what" (price action) is more important than the "why" (news, earnings, and so... read more

• Last updated 2/26/12 by Gil Oren

Cup and Handle Pattern     Characteristics:   1. A cup and handle formation should follow a trend increase, ideally one that is a few months old; 2. The cup must always precede the handle. The cup must form a rounded bowl shape, with a clear bottom; 3. The cup must last between 1 to 6 months, and the handle between 1 to 4 weeks; 4. The stock’s volume should decrease together with the price during the cup. The volume should increase fast near the end of the handle (when prices begin to rise). 5. The cup and handle is a bullish chart... read more