The Frontiers Of Trading

by: Ivan Cavric Trading can be a challenging and complex endeavor, and even the most experienced traders can make mistakes. Here are seven of the biggest mistakes traders make, and how you can avoid making them: Not having a trading plan: One of the most common mistakes traders make is not having a clear trading plan. A trading plan should include your goals, risk management strategy, and a detailed plan for how you will enter and exit trades. Without a trading plan, you are more likely to make impulsive decisions and be swayed by emotions. Not managing risk: Risk management is an essential part of trading, but many traders ignore it. Without a proper risk management strategy in place, you are more likely to suffer significant losses. It's important to have a plan in place for when things go wrong and to have a stop-loss in place to limit your losses. Over-leveraging: Leverage can be a powerful tool, but it can also be dangerous if not used correctly. Over-leveraging your trades...

by: Ivan Cavric Scalping is a popular trading strategy in the world of day trading. It involves buying and selling financial instruments, such as stocks or currencies, within a single trading day in order to make quick profits. Scalpers aim to profit from small price movements and typically hold their positions for just a few minutes or seconds. There are several methods used in scalping, including: Trend following: This method involves identifying a trend in the market and then placing trades in the direction of that trend. Scalpers using this method will look for short-term price movements that align with the overall trend. Pros: It can be an effective way to capitalize on short-term price movements. Cons: Identifying trends can be difficult, and there is a risk of missing out on potential profits if the trend changes. News trading: This method involves taking advantage of market-moving news events, such as earnings reports or economic data releases. Scalpers using this method wil...

by:  Ivan Cavric The Gator Oscillator, also known as the Gator Indicator, is a technical analysis tool that is used to identify market trends and potential changes in momentum. Developed by Bill Williams, a well-known technical analyst and trader, the Gator Oscillator is a combination of two indicators: the Alligator Indicator and the Awesome Oscillator. The Alligator Indicator is a trend-following tool that uses moving averages to help traders identify the direction of the market. The Awesome Oscillator, on the other hand, is a momentum indicator that measures the difference between the 34-period and 5-period simple moving averages. When the two indicators are combined, the Gator Oscillator is able to provide a clearer picture of the market's direction and momentum. The Gator Oscillator is displayed as a histogram on a chart, with the bars representing the difference between the two moving averages. When the bars are above the zero line, it indicates that the market is in an uptre...

by: Ivan Cavric The DeMarker Indicator, also known as the DeM, is a technical analysis tool that compares the current price action of a financial instrument with its price action over a specified time period. It was developed by Tom DeMark, a market technician and founder of Market Studies, LLC. The DeM is used to identify potential market tops and bottoms, as well as potential trend reversals. The DeM is calculated using the following formula: DeM = (Hn - Ln) / (Hp - Lp) where Hn is the current period's highest price, Ln is the current period's lowest price, Hp is the previous period's highest price, and Lp is the previous period's lowest price. The DeM oscillates between 0 and 1, with readings above 0.7 indicating overbought conditions and readings below 0.3 indicating oversold conditions. A reading above 0.7 is generally considered a sell signal, while a reading below 0.3 is generally considered a buy signal. One of the main advantages of the DeM is that it is a lea...

by:  Ivan Cavric The Aroon indicator is a technical analysis tool that helps traders identify trends and potential trend reversals. It was developed by Tushar Chande in 1995 and is composed of two lines: the Aroon Up and the Aroon Down. The Aroon Up line indicates the strength of the uptrend and is calculated by measuring the number of periods since the highest high was reached. The Aroon Down line indicates the strength of the downtrend and is calculated by measuring the number of periods since the lowest low was reached. When the Aroon Up line is above 70 and the Aroon Down line is below 30, it is considered a strong uptrend. Conversely, when the Aroon Down line is above 70 and the Aroon Up line is below 30, it is considered a strong downtrend. When the two lines are close to 50, it indicates a weak trend or a potential trend reversal. The Aroon indicator can also be used to identify potential trend changes by looking for crossovers between the Aroon Up and Aroon Down lines. A cr...

by: Ivan Cavric Penny stocks are low-priced securities that are traded on over-the-counter (OTC) markets or on the pink sheets. These stocks are often considered to be high-risk investments due to their low trading volume and lack of financial transparency. Despite the risks, many investors are drawn to penny stocks due to their potential for high returns. In this article, we will explore some of the reasons why people buy penny stocks. High returns: One of the main reasons why people buy penny stocks is the potential for high returns. Because these stocks are often priced at a fraction of the cost of more established stocks, even a small increase in price can result in a significant return on investment. Small investment: Another reason why people buy penny stocks is that they can be purchased for a relatively small investment. This makes them accessible to investors with limited capital, who may not have the resources to buy more established stocks. Speculation: Some investors buy...

by:  Ivan Cavric A stop loss is a risk management tool that is commonly used by traders and investors to limit their potential losses on a trade or investment. The basic idea behind a stop loss is that it allows you to set a specific price at which your trade will be automatically closed, in order to prevent further losses. This can be a useful tool for managing risk, but it also has its pros and cons. Pros: Risk management: A stop loss allows you to limit your potential losses on a trade, which can help you to manage your overall risk. Emotion control: By having a stop loss in place, it prevents emotions from driving your trading decisions. If you know that you have a set point where you'll get out of a trade, it's easier to stick to your plan. Time saver: Setting a stop loss in advance can save you time and effort since you don’t have to monitor the trade constantly. Cons: Execution risk: In fast-moving markets, it's possible for your stop loss to be executed at a price t...

by: Ivan Cavric The relative vigor index (RVI) is a technical analysis tool that aims to measure the strength of a security's price trend. It is calculated using the difference between the security's closing price and its moving average, and is plotted on a chart alongside the security's price to help traders identify potential buy and sell signals. To calculate the RVI, you first need to calculate the security's moving average. This is done by taking the average of its closing prices over a certain number of periods, such as 10 days or 20 days. The difference between the security's closing price and its moving average is then plotted on a chart as the RVI. The RVI is often used in conjunction with other technical indicators, such as the moving average convergence divergence (MACD) indicator, to provide a more comprehensive view of the security's price trend. If the RVI is rising while the security's price is also rising, it may be a sign of a strong uptren...

by: Ivan Cavric The Money Flow Index (MFI) is a technical indicator that is used to measure the buying and selling pressure of a stock or other financial asset. It is typically used by traders and investors to identify potential reversal points in the market, as well as to confirm trends and trend strength. The MFI is based on the concept of "money flow," which refers to the amount of money that is flowing into and out of a particular asset. When there is a high level of money flow into an asset, it is considered to be a bullish sign, indicating that traders and investors are confident in the asset and are willing to pay higher prices for it. On the other hand, when there is a high level of money flow out of an asset, it is considered to be a bearish sign, indicating that traders and investors are losing confidence in the asset and are willing to sell it at lower prices. To calculate the MFI, a trader or investor needs to have access to three pieces of information: the asset...