Tech stocks in 2000. Gold in 2011. Cryptocurrencies in 2017. Pot stocks in 2018. They all followed the same pattern. They had massive gains. They started from small rises, but over time, they started to rise at a faster and faster rate. Speculation and greed took over. Any attempt to curb prices on the way up were swamped with buy orders instead. Along the way, a parabolic chart pattern started to unfold. That’s a tough pattern to trade—once every investor who wants in has gotten in, early investors reap large rewards. Once sellers start to outweigh buyers, the prices deflate near...

Apple has been in the headlines lately, but close readers of the news may have noticed Netflix (Nasdaq: NFLX) is also capturing attention. One reason is related to the important question of censorship by tech companies. The Associated Press noted, “Netflix faced criticism…from human rights groups for pulling an episode in Saudi Arabia of comedian Hasan Minhaj’s “Patriot Act” series that criticized the kingdom’s powerful crown prince. The American comedian used his second episode, released Oct. 28, to criticize Crown Prince Mohammed bin Salman over the killing of writer Jamal Khashoggi an...

Charts can provide plenty of profitable trading patterns time and again. But they can also be deceiving. That’s because most charts don’t share key data. It can tell you a price point on a given day—which is handy. But there’s more to a price chart than price. For instance, if a stock keeps moving higher day after day, it may look like a good trade. But if it’s bouncing around during trading hours and only barely heading higher, it may not look like the slam dunk that it could be. To find these extreme intra-day moves, and to get an idea of where the bulk of the trading money i...

Most folks just think of investments as things that go up or down (and even then hopefully just up). But the fact of the matter is, any asset can have a long period of time where it trades in a sideways range, bouncing between a high and low. Recognizing these ranges from a chart pattern is a good way to find short-term trades. It may not be the big grand slam of catching a major move up or down, but it can give you consistent profits time and again. These types of patterns occur in the markets all the time. They’re known as consolidation patterns, and they tend to keep a position...

There’s a great old saying on Wall Street: The trend is your friend. But what happens when the trend ends? After all, nothing lasts forever. That’s when things can become troublesome for investors. At least, for those who don’t know the signs. That’s because a stock’s pattern can give you a clue that a long-running trend is about to end. And whether that means a stock that’s been going up is about to go down, or a declining stock is about to rally. This is called a reversal pattern. And being able to catch one successfully is one way to grow and preserve your wealth—in any market ...

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.