Real-time options education and strategies
One of the most reliable chart patterns for an upcoming directional trend is the consolidation range. Below is the daily chart of MU. Price experienced a strong 45% rally from the beginning of November thru December 4th. Since then price has moved sideways in a $5 range between ~69.50 and ~74.50. Since a range like … Read more
There are two key ingredients in any successful options position. The first is trade location. This is the most difficult step even for experienced traders. Just look at most any price chart and it seems like a series of random moves in either direction. I have spent many years trying to interpret those price moves … Read more
For the purposes of this post I be focusing on the longer-term charts, primarily the weekly chart. The weekly chart is particularly useful for finding entries into option positions with 3+ months of duration. Of course they can be used for shorter-term trades but a balanced option portfolio will be comprised of bullish and bearish … Read more
Trading is hard. That’s not breaking news. We all know that. The hardest part of trading for most is once in a trade when to exit. Often a trade is initially profitable only to have it reverse and take back all of the profits and then some. After that experience it’s easy to exit a … Read more
I often refer to price acceptance in my posts and tweets. In many cases it’s quite obvious whether or not price has been accepted or rejected at a certain level and there are other cases where it’s not as clear. If that sounds a little frustrating, welcome to the world of trading! If everything in … Read more
Anybody who was long FB had a good week. After price appeared to be breaking down on Monday when it closed below the previous week’s low (blue box showing the previous week’s high, low and half-back prices) it rallied strongly into Friday’s close. I labeled 2 candles with a number; Tuesday’s candle is #1 and … Read more
How do we know if buyers or sellers caused a price spike? If price is rising it’s due to buyers and if price is falling, it’s sellers. Yes, it’s that simple but, as always, there are nuances. Look at the SPY market profile from 10/19. Buyers took it higher right from the open. Sellers took … Read more