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How To Exploit Chart Patterns to Make Money

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Chart patterns can provide a rare signal of clarity in the daily noise of market price action. And no matter what security or asset class you’re trading, chart patterns can help you make sense of the numbers and interpret random information into actionable insights. In my experience, this is especially true for trend followers and other types of traders who have price action at the heart of their trading strategy. That’s why I wanted to write this short article to share exactly how I use different reversal and continuation chart patterns to orient myself in any market environment. So by the time you’re done reading, hopefully, you’ll have a much deeper understanding of how chart patterns can be one more valuable resource in your technical analysis toolbox. So where do we start? How chart patterns help give context: As a trend-following trader, my main trading and investing strategy are to buy stocks that are going up in price and try to hold on for the ride. This momentum-driv

How To Create A Trading Edge

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“90% of traders fail” It’s a phrase that almost all traders have heard at least once in their trading journey. Some might have even experienced it and quit already, some would have overcome it and some probably are thinking about quitting now. This post is for the group of traders who are still struggling to find their path to consistent profitability and for those winners who are trying to maximize their edge even more. Trading is a field where the odds are stacked against you from the start. It’s your job to choose the right instruments to trade, the right side of the trade, and the right strategy to execute at the right time if you want to stay afloat in the game. Getting so many things right can be very difficult to do for a new trader. Setting yourself up for success in trading is simply having a strategy or a system with a positive expectancy system - in simpler terms, if you trade, you should make money over a period of time or over a certain number of trades. Some call this hav

The MACD: The Perfect All In One Indicator?

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Expert traders are fast to let you know that combining two indicators will inevitably give you better and more reliable signals on when to enter or exit an open position. Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship in the movement of the price of a security. It combines two indicators ; a 12-day exponential moving average for the short-term changes and a 26-day exponential moving average for the long-term changes. The MACD was invented by Gerald Appel in the 1970s, where his intention was to create an indicator that will reveal, direction, momentum, strength, and length of a stock's trend. This makes it unique compared to other indicators, as it's really an "all in one" indicator.  The MACD Formula The calculation of MACD is done by taking the 26- period exponential moving average (EMA) and then minus 12-period EMA. This gives a 9 day EMA of the MACD referred to as the signal line.  When the 12-

Why Fundamental Analysis Matters

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This site heavily focuses on technical analysis, but through experience, I learned that a company's fundamentals need to be understood to access risk properly. The stronger the company is fundamentally the less risk there is when holding. Keep in mind the best trader out there: Warren Buffet, is famous for value investing , so it's always good to have a solid understanding of this strategy, even if you won't be using it much going forward. This article will cover five fundamental financial metrics that you should understand before trading and investing in a stock. As, fundamentals do matter (unless day trading), even if your trading strategy heavily focuses on Technical Analysis. For analyzing the fundamentals of a stock, let's use Tesla ($TSLA) as an example. Tesla has been making all the right noises lately and just continues to defy everyone's expectations as it powers to never-ending all-time highs. Many people think the stock is overvalued, but what is the basi