Education Center
What averages should we use to trade with? I use the 10 and 18. Should I use just one or which two should I use?
A lot depends upon what the stock you are looking at is doing. Stocks in uptrends tend to use the 10 or the 18 day moving average as support on the moves. Stocks do not move higher in straight lines. They move up, pullback to support, and then move up again. When in this pattern, […]
When you speak of relative strength breaking out, is it Wilders RSI or relative strength of the particular stock versus the market?
Relative strength as we use it refers to a stock’s relative strength versus the S&P 500, a broad measure of stocks. We want to see a stock performing well relative to what most consider the standard by which performance is measured (mutual funds use the S&P 500 as their yardstick). One could use an even […]
In options, when a stop is set to protect, what triggers the stop? Is it the bid or the ask?
As a stop order is a sell-side transaction, the option price must hit the bid side of the spread to trigger a sale. Further, there must be a trade made at that level to trigger the stop order. That is why we like to trade options that have at least 100 open interests as there […]
We have had a lot of questions about using the 5 minute and 15 minute moving averages intraday as short-term trading signals in a volatile market that makes riding positions for weeks at a time (our real preference) much more difficult (at least upside plays).
You need a realtime service to use this method effectively. Set your interval chart moving averages to 5 minutes and 15 minutes. Then you are set to start looking for entry and exit points to the upside and the downside. Let’s take a look at Friday’s action on the Nasdaq for example in order to […]
How can small investors tell when institutions are buying or selling?
The easiest and most accurate way to determine this is to watch the price of a stock or index versus the volume. What we like to see is a stock or index rising on rising volume. It does not have to rise every day, but over a week’s time we want to see clear majority […]
Questions on Overall market stats – VIX and Put/Call ratio: Where do you get these numbers and how were they calculated? Is the Put/Call ratio calculated from a sample of batches of transactions or is that the actual total for a whole day of trading or a cumulative total? And who has access to these figures?
The VIX, or volatility index, is a measure of the range of trading on the S&P 100. It is a secondary indicator in that when volatility climbs, stocks tend to bottom and reverse. Thirty is a benchmark, but we have to note that the index shot over 40 early in the year during that selling. […]
The hardest days for me to trade are the days that the market and stocks in my watch list gap up big. I have tried several ways to play those, but often with not a lot of success. What is the method(s) that you use to play stocks that gap up big?
We ‘hate’ days where stocks gap open sharply to the upside when we are looking to enter into positions. With the market littered with failed rallies since March, each time the market gaps higher you almost have to expect a pullback. Today was another case in point: a gap higher just could not hang on […]
At what site can I find the Nasdaq futures before and after the close?
You can find the Nasdaq futures (and for the Dow and S&P) after hours or in the morning before the open at:http://money.cnn.com/data/markets/http://www.cme.com/cgi-bin/gflash.cgi
Where can I find out what institutions are buying or selling a stock? Are sites updated daily, weekly? Where can I find out what is an average daily volume for a stock? Where can I find out the volume movement throughout the day?
One of the best and easiest to use sources of buying or selling is Investor’s Business Daily. IBD has a letter rank of A through E that describes whether a stock is being accumulated (“A” ranking is best) or sold (“E” ranking). It also has a mutual funds section that shows the top buys and […]
How do I find out the 10-days, 15-days, 50-days or 200-days moving average for a particular stock? I see above terms being mentioned from time to time. How do you derive this and do you need special software to provide such function?
You do not have to have special software to obtain these points. If you are looking for a numerical as well as graphical representation, you can go to the web at www.investertech.com and create custom charts where you specify the moving averages you want to see. You can also get the information form realtime systems […]
