There’s a great old saying on Wall Street: The trend is your friend. That’s especially true if you want to trade in the options market, where you have a limited amount of time for a trade to play out. Yet many investors, focused on a company’s fundamentals, don’t think about trends at all. It’s a critical skill for any investor—but it’s crucial for shorter and more leveraged trades like those in the options market. That’s why it’s important to consider all the factors that can cause a company’s share price to rise or fall. For longer periods, the fundamentals definitely matter. But f...

Trading can be tough for many reasons. But just as a general fighting a war may send on scouts, you too can scout out the options market for the best possible trades. Understanding how a company’s options usually move can prepare you to find moments where they’re making unusual moves. And by looking at options with unusual activity, you can get an idea of where larger investors in the options market are placing their bets. These larger traders—the so-called “Smart Money” on Wall Street— may not make huge profits, but they have a great track record of being right far more than wrong. ...

Chart patterns show the emotions of traders. Technical analysts combine the price action seen on charts with indicators designed to measure momentum and other characteristics of the market. Combined, these techniques can provide a trading strategy. To begin the development of a trading strategy, traders can look at a price chart of a broad stock market index such as the S&P 500 or the Dow Jones Industrial Average. Price trends in indexes are highly correlated with each other so traders can benefit from an analysis of any major index. The Chart Shows a Down Trend The S&P 500 Index ...

Most options investors screw it up. They may just buy a call option and hope a stock will rally further, leading to huge profits. Or they buy a put and hope a company immediately starts filing for Chapter 11. The fact of the matter is, stocks fluctuate. They may eventually go way up or way down, but it won’t be in a straight line. And knowing how to profit from more modest moves in a stock—the more typical daily moves you’re going to see over most of your investment life—is crucial for any options investor. That’s where options spreads come in. This strategy uses two options in a tra...

If there's one thing I love about options trading, it's the ability to make money just about anytime. One powerful strategy involves making what I call "gas money" trades, where I can make a small amount of money, but safely and often thanks to the options market. In this video, I'll share with you how that's done and walk you through two examples.

Want to do better than the market? Buy once it’s hit correction territory. In this video, I’ll show you not just one, but TWO investment plays to benefit from a market that’s now down 10 percent from recent highs.

It might be a bear market. But, that does not mean prices will go straight down for the next few months. Even in bear markets, there are times when prices move higher. This is true in even the worst bear market. The chart below shows what might be the worst bear market in U. S. history. It’s the Dow Jones Industrials Average from 1929 to 1932. The index fell about 90% over that time. At the bottom of the chart is a zig zag indicator. This indicator reverses direction whenever prices move at least 10% from a high or low. From the peak in 1929 to the bottom in 1932, even as the index moved...

At the minute it became legal, “Cannabis was “flying off the shelves” in retail outlets and online stores across the country as soon as the clock struck midnight Wednesday (October 17). The demand was so high that pot stores reported running low or completely out of cannabis on the first day,” according to the Canadian news site GlobalNews.ca. Sales were strong but costs varied widely. And, price is important because “Four out of 10 Canadians say the price will determine whether they buy their pot legally or on the black market as legalization approaches. That’s according to a Global...

Technical indicators can be useful. But, many indicators require a subjective evaluation. This makes technical indicators challenging to use. Indicators or trading tools can be broadly classified as subjective or objective. A subjective tool is one that requires some degree of interpretation. For example, when looking at divergences, a popular tool for analyzing indicators, subjective judgments must be made. Objective indicators offer clear signals defined by rules that are known in advance. Moving averages are popular objective indicators. A less well known objective indicator is the AR...

Let’s face it. We all want to know when the next bear market will start. Fortunately, there is a way to know. There are actually many tools that will tell us exactly when the bear market starts. Of course, they all signal after the market turns. Even though signals from some tools will come after the down turn is underway, these signals could still provide a profitable warning. And, it could be that early signals are dangerous to your wealth. Early Can Be Devastating Stocks can be on a sell signal well before the market turns down.  The chart of the popular CAPE ratio is shown below to il...