Education Center
In reading the Q&A’s, you say you use a simple 50 day moving average, but from the reports it appears you are using exponential. Is there a reason?
We did switch to an exponential 50 day moving average over the last month as the Nasdaq was tracking truer to it then the simple 50 day moving average. While we are still keeping a simple 50 day moving average on the charts for another frame of reference, we will use the exponential version for […]
What is a good rule of thumb for setting stops?
What level you use for stops depends upon whether you are trading stock or options, if you just bought into a position or have some profit built into it, and personal preference, just to hit the high points. For stock purchases, don’t let your loss exceed 7%-8% from your buy point. That way, if a […]
How much of a move can be expected on a breakout of a cup with handle pattern?
If a stock breaks out of a well-formed pattern on 1.5 times the 50 day average volume or better, it has a good chance of continuing the move up. How much each stock gains is dependent upon that stock. Stocks breaking out of a cup with handle usually race ahead, and then succumb to some […]
How can I find timely information on money flows into mutual funds?
We look at several sources to determine this. One is Trim Tabs. That company keeps track of flows into the various types of stock funds as well as money market funds. We also track money flowing into individual stocks looking at block trades, IBD’s accumulation/distribution ratings, various charting programs. We compile all of the information […]
Is there a reliable site that you can find the dates and time of day (before, during or after market hours) companies are scheduled to report earnings? I can’t find one that is reliable.
There are many sites that offer an earnings release service, but as you have found, we have found none that are completely accurate. And that is not necessarily the fault of the site. We have a heck of a time getting accurate information from the companies. We don’t trust what we see on the web, […]
Is there a ‘bible’ for technical analysis?
We have not found a book that we view as ‘definitive’ because none cover all of the aspects we view as important (sounds as if there is the need for a book here). There are a few to look at. On is ‘The Visual Investor’ by Murphy. It is a good introduction into trendlines and […]
How can you put stops on options?
The market really has no mechanism for stop orders on options. If you were to submit an order to sell an option at $3 below the current bid, it would show up on the board and a market maker would say ‘thank you very much’ and then sell it at the current bid price, pocketing […]
Is there any place I can find option deltas on the web?
We have received this question many times, but have not found any site that provides them for free. Indeed, several paid services do not provide them (e.g., Windows On Wall Street). We use eSignal as it gives us direct quotes as well as option deltas. We like that package for a serious trader. We will […]
I would like to have an explanation about your references to a put to buy versus a put to sell, and a call to buy versus a call to sell.
When we are looking at actually buying an option, we use the phrase “to buy” after the option symbol. This is language that your broker understands when you place an order. For example, today we were looking at some calls to buy on MMC from our Stock Split Report. We told our broker the following: […]
You often mention a stock basing (i.e., building a base) or a stock consolidating (i.e., laterally). What is the difference in the two, if any?
When a stock builds a base, that is a longer term process that usually takes place over weeks to months and can take many forms, e.g., cup with handle, saucer, flat, double bottom. This occurs when the stock takes a serious correction from a high (in the 20% or more range). Now even some stocks […]
