Edition 855
November 13, 2020
Introduction to a Series on Technical Analysis
This week’s chart scan is a continuation of a series of very basic technical analysis concepts. I’m not a big fan of technical analysis, but I have to admit that I cut my trading teeth using it. Eventually, I came to believe there is a time and place for any and all tools. If something can help you understand the markets and how to trade them, I’m all for it.
There are many beginning traders who read Chart Scan, and over the years I have had many questions from them concerning technical analysis. Instead of giving you an article on the psychological aspects of trading, the next several issues of chart scan will feature articles on technical analysis. My hope is that where and whenever possible, I will show you the right way to use this type of analysis.
Keep in mind, the only real truth on a price chart is price itself. With that in mind and keeping price always in the forefront we can begin taking a look at some tools that fit into the category of technical analysis.
Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Chart Scan with Commentary: Liquidity
Hi Joe:
In an email response, you stated:
“While we are looking at the chart below, based on what I see overall, this is a market I would never trade, at least not in the time frame shown.
There are excessive doji bars sprinkled about, and many bars that open or close at the exact high, or low.
The unusual price action on this chart, reveals a very thinly traded market, and probably a small time frame (5-7 minute bars, perhaps?)”
Yes, Joe, you were correct -- it was a 10-minute bar chart from 3pm till 10pm
S&P/ASX 200 Index (Australia)
Question: I am interested in finding out more on how I can determine if a market is thinly traded.
What are the checkpoints that I should be looking for that makes it clear to me that a market is thinly traded?
At the expense of repeating: If you are looking at a chart, if prices are “boxy” looking, not well formed, lots of dojis, lots of bars that open or close at the extremes, few if any trends beyond single swings, no volume time periods—in other words, the chart doesn’t look right, stay away.
To this you have to add what is normal volume for the market and time frame being considered. For this you will have to experiment. If you are trading futures, some markets are notoriously thinly traded. US sugar. Lumber. Feeder cattle, are examples. However, there may be times when a thinly traded market can be liquid—Frozen concentrated orange juice, which is normally not a liquid market, can become so if there is a freeze in the parts of the world where oranges are grown. Cotton is another of those markets.
For stocks, you just have to know what is normal for them individually.
One way to tell if a stock, futures, or option is thinly traded is to look at the bid/ask spread. If it is more than a few cents for stocks, or a few ticks for futures, be careful. A liquid market has tight bid ask spreads.
Keep in mind that liquidity is made up of two things: volume and participation. Thinly traded markets are illiquid markets.
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© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Trading Article: Swing Low
Swing Low is a term used in technical analysis that refers to the troughs reached by a security’s price or an indicator. A swing low is created when a low is lower than any other surrounding prices. Successively lower swing lows indicate that the...read more.
© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Philippe Guartier: Administration and
New Developments of Instant Income Guaranteed
Instant Income Guaranteed - CNC TRADE
On 27th October 2020 we gave our Instant Income Guaranteed subscribers the following trade on Centene Corporation (CNC). Price insurance could be sold as follows:
- On 28th October 2020, we sold to open CNC Dec 18 2020 50P @ 0.90, with 50 days until expiration and our short strike about 22% below price action.
- On 5th November 2020, we bought to close CNC Dec 18 2020 50P @ 0.30
Profit: 60$ per option
Margin: 1000$
Return on Margin annualized: 273.75
Philippe
TRADING SUCCESSES EMAILED TO YOU DAILY!
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© by Joe Ross and Philippe Gautier. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Professional Trader Andy Jordan
Educator for Spreads, Options, Swing, Day Trading, and
Editor of Traders Notebook Complete and Traders Notebook Seasonal Spread Trading (TNsst)
Trading Article: Overcoming Fear
There are three foes you must overcome in order to become an adequate trader.
The first foe is....read more.
Andy Jordan is the creator of Traders Notebook, a successful spread trading daily guidance advisory service. Do you want to receive how to manage trades and detailed trading instructions every day? Click here for additional information! Contact Andy Jordan with questions.
© by Andy Jordan. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Professional Trader Marco Mayer
Educator for Forex, Futures and Systematic Trader
Creator of Ambush Trading Method, Ambush Signals, and Head of AlgoStrats.com
Gold-Rush: Over $10000 profit with a Day Trade in the Gold Future?!
One of the top markets over the last couple of months for Ambush Traders has been the gold market. Whether it's the Gold Future, Micro-Future, or XAU/USD forex pair, Ambush Traders are in a crazy gold rush!
Here's a daily chart of the Gold Future (GC, traded at CME), showing the last couple of months of trading. As you can see this market did what markets do 90% of the time, which is why Ambush is such a great trading method. Markets move in boxes/ranges, break out for a few days and then start moving in the next box. Gold has been in huge boxes almost all of the time and so Ambush Traders had a lot of great opportunities!
Here are the results of these trades, trading only one Gold Future (GC) contract:
Yup, that's almost $40k profits with almost no drawdowns in between within just a couple of months! And yes we did catch one of the largest moves ever in the gold market on 9th November making OVER $10k with a DAY TRADE!
Now the Gold Future is a large contract and not suitable for small accounts. But you can do these trades also in the E-Micro Gold which is just 1/10 the size or the XAU/USD forex pair.
That's what makes Ambush Signals so great, it works with any account size offering three subscription models depending on your goals.
Notice that all of these are actually day trades, even though they're based on end-of-day trading decisions. Ambush is exactly that, an easy way to day trade not for a few tiny ticks with a lot of stress but placing your trades once a day, walk away, and go for the big intraday moves!
Don't miss the next Gold trade and join Ambush Signals today!
Happy Trading!
Marco
The Ambush Trading System was created in 2007 by Marco Mayer. Since then it proved itself in the markets for over a decade and did so with exceptional results. It's the only trading system we're aware of that is still going strong after so many years. While Ambush is a day trading system, meaning you will always enter and exit on the same trading day - you don't have to sit in front of your trading screen. You simply place your entry orders when the trading session starts and come back at the close!
© by Marco Mayer. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
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