Commitments of Traders: What are the Big Boys Up To?

I have discussed in past articles how volume and open interest can be used to help identify and confirm market situations and trading opportunities. I’ll take open interest one step farther in this column by examining the Commitments of Traders (C.O.T.) report, issued by the Commodity Futures Trading Commission (CFTC). The C.O.T. report is released … Read more

Claim and Defend Your Trader Status

Just because you call yourself a securities trader doesn’t make you one in the eyes of the Internal Revenue Service. In fact, Uncle Sam is predisposed to consider you merely an investor, and thus deny you more favorable tax status, unless you meet a number of tests that are frustratingly open to interpretation. That’s right: … Read more

Candle Charting Basics Spotting the Early Reversal Signals

Bio: Steve Nison, the first to reveal the power of candlesticks, has taught the top professional traders from nearly every major investment firm from 19 countries. His work has been highlighted in the financial media, including the Wall Street Journal, Worth Magazine, and Barron’s. Mr. Nison is the author of three books including Japanese Candlestick … Read more

Calculating Profit and Loss

For ease of use, most online trading platforms automatically calculate the P&L of a traders’ open positions. However, it is useful to understand how this calculation is derived. To illustrate a typical FX trade, consider the following example. The current bid/ask price for EUR/USD is 1.2320/23, meaning you can buy 1 euro with 1.2323 US … Read more

Buying New Momentum Highs

Much has been written about the use of momentum oscillators in highlighting retracements in a trend or momentum divergences. This article will show an entirely different way that momentum oscillators can be used.

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Bullish Thrusting Line

Step 1 – Look for a BULLISH THRUSTING LINE resting on MINOR PRICE SUPPORT, and/or a rising Major Moving Average (10 MA, 20 MA, or 50 MA) on the daily chart. Step 2 – Pull up a 15 min. chart of the stock. Step 3 – Note the high price of the previous day’s daily … Read more

Bullish Harami Candlestick Play Instructions

Step 1 – Look for a BULLISH HARAMI resting on MINOR PRICE SUPPORT, and/or a rising Major Moving Average (10 MA, 20 MA, or 50 MA) on the daily chart. Step 2 – Pull up a 15 min. chart of the stock. Step 3 – Note the high price of the previous day’s daily HARAMI … Read more

Bollinger Bands® – The Basic Rules

One of the great joys of having invented an analytical technique such as Bollinger Bands is seeing what other people do with it. While there are many ways to use Bollinger Bands, following are a few rules that serve as a good beginning point. 1. Bollinger Bands provide a relative definition of high and low. … Read more

Bollinger Bands® Tactics

Bollinger Bands draw their power through two important characteristics. First, they exhibit an underlying trend-range axis just like price or moving averages. Second, they constrict or expand as they move.

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