Trading Options and Futures involves risk and
is not suitable for all investors, you are not
guaranteed to make money. Never put at risk
more money than you are willing lose..
is not suitable for all investors, you are not
guaranteed to make money. Never put at risk
more money than you are willing lose..
There are some Technical Analysis Tools that are just a complete waste
of time and confuse you more than help you(if the truth be known I
think some of these analysis tools were invented to keep the average
investor as confused as possible). I will attempt to point you to the best
ones to use.
The Fibonacci Theory(Fibonacci was an Italian Mathematician in the
1100’s) is based on the sum of any two adjacent numbers which creates
the next highest number in sequence. These numbers could be used for
possible support and resistance on stocks and index trading. For
example: 1 1 2 3 5 8 13 21 34 55 which would be 1+1=2
1+2=3 2+3=5 3+5=8 5+8=13 and so forth.
To demonstrate the mechanics of a fibonacci retracement, suppose the
Nasdaq made a new high of 2850 after rallying from 2750, and begins
to retrace(which means pullback from the high). The total move up was
100 points. To find possible support levels where the downtrend may
cease and the uptrend resume, the fibonacci retracement levels are
calculated as:
low 2750 high 2850 total move 100 points
possible retracements:
61.8% 100 x 0.618=62 2850-62=2788
50% 100 x 0.500=50 2850-50=2800
38.2% 100 x 0.382=38 2850-38=2812
As long as a pullback stays within 61.8% of a prior rally, the latest trend
is still alive.
of time and confuse you more than help you(if the truth be known I
think some of these analysis tools were invented to keep the average
investor as confused as possible). I will attempt to point you to the best
ones to use.
The Fibonacci Theory(Fibonacci was an Italian Mathematician in the
1100’s) is based on the sum of any two adjacent numbers which creates
the next highest number in sequence. These numbers could be used for
possible support and resistance on stocks and index trading. For
example: 1 1 2 3 5 8 13 21 34 55 which would be 1+1=2
1+2=3 2+3=5 3+5=8 5+8=13 and so forth.
To demonstrate the mechanics of a fibonacci retracement, suppose the
Nasdaq made a new high of 2850 after rallying from 2750, and begins
to retrace(which means pullback from the high). The total move up was
100 points. To find possible support levels where the downtrend may
cease and the uptrend resume, the fibonacci retracement levels are
calculated as:
low 2750 high 2850 total move 100 points
possible retracements:
61.8% 100 x 0.618=62 2850-62=2788
50% 100 x 0.500=50 2850-50=2800
38.2% 100 x 0.382=38 2850-38=2812
As long as a pullback stays within 61.8% of a prior rally, the latest trend
is still alive.
MACD OSCILLATOR : Is a moving average lagging indicator
which is the difference between a securitys 26 day and 12 day
expotential moving averages. Of the two moving averages that
make up the MACD, the 12 day EMA is the faster and the 26 day
EMA is the slower. Closing prices are used to form the moving
averages. Usually, a 9 day EMA of MACD is plotted along side to
act as a trigger line. A bullish crossover occurs when MACD moves
above its 9 day EMA and a bearish crossover occurs when MACD
moves below its 9 day EMA. A positive MACD indicates that the
12 day EMA is trading above the 26 day EMA. A negative MACD
indicates that the 12 day is trading below the 26 day EMA. If
MACD is positive and rising, then the gap between the 12 day and
the 26 day EMA is widening. This indicates that the rate of change
of the faster moving average is higher than the rate of change for
the slower moving average. Positive momentum is increasing and
this would be considered bullish. If MACD is negative and declining
further, the the negative gap between the faster moving average and
the slower moving average is expanding. Downward momentum is
accelerating and this would be considered bearish. MACD
centerline crossovers when the faster moving average crosses the
slower moving average. I would suggest having the settings on the
MACD at 12, 21 and 5 and using a 9 day and 18 day simple
moving average on a 30 minute chart also, and watch for them to
all line up and cross at or near the same time before buying or
selling. You also might try a 5 day and 10 day simple moving
average.
which is the difference between a securitys 26 day and 12 day
expotential moving averages. Of the two moving averages that
make up the MACD, the 12 day EMA is the faster and the 26 day
EMA is the slower. Closing prices are used to form the moving
averages. Usually, a 9 day EMA of MACD is plotted along side to
act as a trigger line. A bullish crossover occurs when MACD moves
above its 9 day EMA and a bearish crossover occurs when MACD
moves below its 9 day EMA. A positive MACD indicates that the
12 day EMA is trading above the 26 day EMA. A negative MACD
indicates that the 12 day is trading below the 26 day EMA. If
MACD is positive and rising, then the gap between the 12 day and
the 26 day EMA is widening. This indicates that the rate of change
of the faster moving average is higher than the rate of change for
the slower moving average. Positive momentum is increasing and
this would be considered bullish. If MACD is negative and declining
further, the the negative gap between the faster moving average and
the slower moving average is expanding. Downward momentum is
accelerating and this would be considered bearish. MACD
centerline crossovers when the faster moving average crosses the
slower moving average. I would suggest having the settings on the
MACD at 12, 21 and 5 and using a 9 day and 18 day simple
moving average on a 30 minute chart also, and watch for them to
all line up and cross at or near the same time before buying or
selling. You also might try a 5 day and 10 day simple moving
average.
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Unauthorized reproduction of any solo enterprises
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2006, Solo Enterprises Inc. All rights reserved.
Inc. publications is strictly prohibited. Copyright
2006, Solo Enterprises Inc. All rights reserved.
Solo Enterprises
Inc.
Inc.