Do you know how to implement moving average crossovers in trading? Moving averages are widely used indicators in technical analysis that helps smooth out price action by filtering out the noise from random price fluctuations. There are two commonly used moving averages. They are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA)….
How to Get Started in Trading Penny Stocks for Beginners Looking for how to get started in penny stocks? It’s important to learn about important topics such as float, choosing the right broker, pdt rule, proper risk management, and position sizing first before jumping right into trading. Many new traders get excited by the lure…
Technical analysis patterns are formed when data is plotted. The data gets repeated resulting in the pattern. Chart patterns play a huge role in technical analysis. Charts are so important. There are different kinds of charts you can use but candlestick charts are the most popular. The candlesticks show the price movement of the time…
Options vega is a part of the Greeks in options trading. Vega measures the rate of change in implied volatility for an options contract. It’s a lot like how delta measures change in an options price. Sometimes reversal rallies bring a large decline in implied volatility. So while you have a positive delta, the loss…
There’s a lot of different stock market terminology and lingo in the industry. Stock market terms such as bid and ask, level 1, level 2, premarket and aftermarket hours, float, technical analysis, and candlestick chart patterns etc. Having a solid comprehension of these terms will help you to become a better trader. Just be aware…
Options theta is one of the option greeks. Theta measures the sensitivity of the decline in extrinsic value with the passage of time. It is also known as time decay. This is why buying naked options contracts is a risky trading strategy. Especially avoid buying out of the money options contracts. They are cheaper, yes,…
Options gamma is a part of the greeks and it measures the rate of change of delta. Delta tells you the amount of change in an options contract per $1 move. Delta moves up and down whereas gamma stays constant. A higher gamma means the stock is much more volatile which can actually be a good thing….
Options delta is one of the most important factors in making up an options contract. It is a member of the Greeks. Delta measures the rate of change in an options price per $1 move. Example: if an option contract has a delta of $0.35 and the price of the stock rises by $1 then…
Knowing how to read an options chain is one of the important parts to understand if you’re to be trading options. There are many components that break down an option chain such as strike prices, expiration dates, calls and puts, extrinsic value, intrinsic value, bid vs ask spread, the Greeks, and more. Being able to…
Open interest options (OI) are a very critical component to pay attention to on an options chain. OI shows the amount of contracts that are currently open on a particular stock. It shows the amount of liquidity to be able to get in and out of the trade. Avoid trading options contracts with less than…
Start Your Free Trial
Download Our Free eBook
