Invest and Trade Profitably with Jon Johnson

Education Center

Is there a web address to track Nasdaq volume during trading days, and compare that volume to past days? What about volumes on individual stocks?

August 30, 2000

Yahoo Finance can be used to track intraday volume as well as up volume and down volume. It is not real time, but they update the information at least every 20 minutes. That gives you an idea of the strength of any move. The link is: does not give you a comparison with the […]

How do you determine that a stock shows good money flow, strong buying and exhibits good price/volume action?

August 30, 2000

We use several sources to help us get an accurate read on technical indicators. The easiest is price/volume. For that, we observe what the price versus volume is telling us. Is the volume above average or below average? Is it rising or falling? Is there a trend? We compare that with price. Is it up […]

When trading options, when should one cut losses and bail out?

August 30, 2000

Love the questions that seem simple, but are not. Unlike trading stocks, trading options has the time element to consider. An option loses most of its value in the last thirty days before expiration. If a stock is not performing as planned and you have three months until expiration, you can ride through some down […]

What is the VIX?

August 30, 2000

The VIX is an index that tracks the current OEX contract. An OEX contract is an option contract on the S&P 100-the biggest caps of the big cap index (S&P 500). OEX options trade just like options on stocks. You can buy a specific strike price, by the contract. Unlike options on stocks, you cannot […]

Does the move in the Nasdag, Dow, & S&P, and their support & resistance levels effect whether you get into an individual stock even when their entry points are reached? Does it matter if the market is going in the opposite direction?

August 30, 2000

Great question. This is why we don’t just jump into positions automatically. Let’s say you are given directions to a location downtown. You follow those directions and are right at your destination. As you are beginning to cross the road, a convoy of trucks comes barreling down at you. You could make a mad dash […]

Would you please discuss deltas on options and how you use them?

August 30, 2000

The delta for an option tells you how much an option will move given a $1 move in the stock. For example, if a stock has a delta of 50, that means for every $1 a stock moves, up or down, the option will move 50 cents in the same direction. The delta is set […]

Why do you buy options that are several months out as opposed to the next expiration month?

August 30, 2000

Many newsletters advocate buying current expiration or the next month expiration options. While cheaper, we have found that unless you are very, very careful, these options can prove to be costlier. Options are a wasting asset. They can decrease in value through a loss of time or a loss in volatility, not to mention a […]

What criteria do you use to set stops?

August 30, 2000

With initial purchases on stock, we look at cutting out if the stock moves against us 7%-8%. Why? We buy when we think a stock is ready to make or is making a move up. If that fails, we don’t want to hang around-something is not right. If it turns back up, we can always […]

When you look at charts, do you prefer 3 month or 6 month charts? When you refer to a pattern, are you looking at a daily chart, hourly, other?

August 30, 2000

We look at charts from all different time frames: 1 year, 6 months, 3 months, 1 month-it keeps us from getting tunnel vision with respect to what has just recently happened. We need to put it all in the perspective of the big picture, but we also need to see the subtleties of the more […]

Why do you use the 18 day moving average versus the 10 or 20 day moving averages?

August 30, 2000

We do in fact use the 10 day moving average quite frequently as strong stocks often use that moving average as support when making a strong move up. As for the 18 day moving average over the 20, we have found that strong stocks more often use the 18 day moving average as support as […]

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