After two decades of Mania Era asset bubbles and sentiment extremes, what now seems normal to many investors is actually highly abnormal. That’s right — many investors no longer fear asset bubbles. That is why too many will be caught off-guard when the Mania Era inevitably ends. Many investors are not frightened by the phrases “stock market bubble,” “housing bubble” or any other type of financial bubble.
“How to draw a trendline” is one of the first things traders and investors learn when they study technical analysis. Typically, they quickly move on to more advanced topics and too often discard this simplest of all technical tools.
Year 2018 kick-started with a bang. There can’t be a better time other than the start of the year to revise your trading performance, to correct past mistakes and to explore better trade opportunities. Optimizing trading performance requires a meticulous effort. Here are some of the trade resolutions which could fine tune your trade performance and put you as a better professional traders.
Identifying Smart money flow is the key essential skill for every professional trader. There are many online tutorials and indicators which explains how to spot smart money flow. But how one can identify using a simple volume and open interest technique to look for a context behind smart money flow?
Here at Ellliotwave International we studied investors behavior for nearly 40 years. A huge benefit of all that study is being able to study today’s stock market to the major market market tops and bottoms of the past. This Mutual Fund Vs Money Market Ratio ( 30 years of historical chart) shows extreme sentimental indications which shows how riskier the investments in today’s stock market compared to 2000 and 2008.
We all love a bargain… Except when it comes to stocks. The reason boils down to uncertainty. We know what our fruits and vegetables should cost at the grocer’s — but we’re far less certain about how much to pay for a blue-chip stock or shares in an S&P 500 Index fund.
Our friends at Elliott Wave International (EWI) regularly put out great free content on their site. If you’ve visited their site before, you may have seen “Chart of the Day,” a featured series of videos that take a quick, but close examination of a chart from one of EWI’s paid publications.
Liquidity and Volume are the two different concepts widely misunderstood by the traders community. High Volume typically represents higher number of executed orders or high trading transactions, however high liquidity represents the order book is stuffed with thick limit orders at Bid and Ask prices levels. More closer the liquidity , lesser the market impact cost and higher the market efficiency.
In the long run, the direction of most equity markets is always up. That’s the best reason one can think of for long term buy and hold style of investing. However, there are downsides in the short term. The efficient market hypothesis indicates that investors (or fund managers) can’t do much about these temporary downsides. Does that mean the market is efficient?
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit — and more importantly, do it consistently. How do they do that?
Trading around the Psychological round numbers like 7000, 8000, 9000 are never been a easier task mentally. This is where many trading participants come up with weird forecasting stuff and this is the zone where frequent stop hunting happens and it is the process of removing weaker hands before market does its next move.
If you are a professional future trader in the markets then transaction cost plays a major role while trading. Lower the transaction cost translates to better returns and also reduces the risk to greater extent in the long run. By constructing a Synthetic Futures (Long/Short) we can reduce the total transaction cost by two-third of the actual instead of trading the futures.