One interesting thing about technical analysis is that there are many tools you can use to analyze the market. One of the most powerful and versatile but underutilized tools in trading is the trendline. You can use it to do almost anything you want and can create a trading strategy around it. Do you want…
A small account trading strategy refers to the trading methods and risk management approach a trader can apply to grow a relatively small account. Starting trading with a small account means having to use leverage and making fewer trades. Thus, a small account strategy requires stringent risk management, patience, and discipline. While it is desirable…
Because of its potential for quick profits, the short-term trading strategy is the most popular trading method among retail traders. Unlike traditional long-term investing methods, this strategy offers an exciting opportunity to profit from relatively minor changes in market conditions. But what exactly is the short-term trading strategy? A short-term trading strategy is a trading…
Many people view stocks as a way to make money, and certainly, stock trading has become one of the most popular types of trading since the emergence of the Covid-19 pandemic and meme stocks. Even before then, its popularity among retail investors grew with the emergence of commission-free stock trading platforms, such as Robinhood. But…
What happens to stocks when interest rates go up? Our backtest reveals that when rates go up, stocks don’t perform well, just as the financial theory says they would. The cornerstone of the financial theory says that the higher the interest rates, the less attractive it is to own risky assets like stocks, gold, and…
Most price charts are time-based in the sense that a price bar represents price movement over a specified period of time. However, there are other chart types that are not based on time but, rather, on a specified price movement size; one such chart is the range bar chart. So, what is a range bar…
The arithmetic vs geometric averages can be difficult to grasp. Albert Einstein is famous for saying that compounding is the eighth wonder. But what if he is wrong? Perhaps multiplicative compounding is the most destructive force in the universe? The sequence of returns and the different alternative paths ultimately determine your geometrical average which might…
Why trade the Euro Stoxx 50? The Euro Stoxx 50 is one of the world’s most popular equity indexes to trade. Because of its popularity, a new Mini futures contract has seen the day of light to make it more accessible for smaller retail traders and investors. You should trade the Euro Stoxx 50 trading…
Thursday last week, the 4th of November 2021, was the fourth day in a row with a higher close than the previous close in the S&P 500. How often does this happen? Let’s test on the ETF SPY since its inception in 1993: It has happened 100 times, so it’s not rare. Is this a…
If all chart patterns are as simple as the rectangle pattern, every technical trader would be a chartist of some sort. One of the most popular chart patterns every trader should know, the pattern is easy to spot. But what is the rectangle chart pattern strategy? The rectangle chart pattern is a continuation pattern that…
