The parabolic sar is a technical trading indicator that is used to predict the direction of a stock. It also creates awareness to when a stock might be reversing direction. SAR actually stands for stop and reverse. It was developed by Welles Wilder who also created RSI. He called it the parabolic time/price system. The…
The (OBV) on balance volume is a momentum trading indicator. It predicts changes in a stocks price using volume flow. OBV measures both the buying and selling pressure and uses an indicator that adds up a stocks volume on bullish days and subtracts volume on bearish days. When price action closes above previous days close,…
What is Fibonacci trading and does this retracement tool really work? It’s a visual technical analysis indicator that uses math to calculate the support and resistance levels of a stock. Fibonacci levels are a numbers series. Example: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 are Fibonacci trading levels. Each new…
Need the (EMA) exponential moving average formula explained? When the 9 ema is over the 20 the price is bullish. If the 20 is over the 9 the price is bearish. When the 9 and 20 are close together and it’s difficult to differentiate the two then the stock is indecisive. Pay attention to ema…
Moving average convergence divergence (MACD) trading is a lagging technical analysis indicator used to spot reversals. It calculates the difference of two exponential moving averages; the 12 and 26 EMA’s. Traders might buy the stock when price rises above the signal line and sell when price action crosses below signal line. What Is MACD Trading…
Which strategy is better between long vs short? They both have their benefits. Going long is easier because every broker allows you the ability to go bullish on a stock. Shorting is a great strategy to use in bear markets or during reversal setups. All you need to do is sell a position near resistance…
How does shorting work? It allows you the ability to take the inverse side of going long on a trade. You take a short trade by selling a stock at resistance levels. This requires you to borrow shares from your broker, which is done automatically. As the price of the stock falls, you look to…
Looking for some day trading tips to help you be a better day trader? 1. Don’t get greedy and take profits along the way. 2. Cut your losses quickly. 3. Don’t over trade. 4. Trade highly liquid stocks on major exchanges. 4. Use a broker that has high speed executions. 5. Paper trade first before…
Trading risk management is essential to your success long term no matter what type of trader that you are. It’s important that you don’t over trade and cut your losses when a trade goes against you. Let your winners run. Always shoot for at least a 1:2 risk/reward ratio, ideally 1:5. That means you risk…
Knowing how to use hot keys is an important skill for day trading. Day traders are hunters of volatility. That volatility is the bread and butter of day trading. You need to be lightening quick when day trading and hot keys afford traders this ability. The video below goes into the importance of using hot…
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