Stock and Option Trading Blog

My new project...

2017-01-23T11:14:00.000-08:00

If you are interested in trading with futures, this may be interesting for you. I developed simple trading system for trading with futures, especially Nasdaq futures, that is suitable even for beginners. You can see more information at Simple Futures Trading System.

Candlestick chart patterns - Bullish Engulfing

2012-10-21T09:13:00.002-07:00

As you can see on a picture above, bullish engulfing occurs when one candle surrounds or engulfs the previous one after a downtrend. The bullish engulfing represents a reversal of supply and demand. At first there was a downtrend, the stock, commodity or index has been selling off. But suddenly strong buying interest comes in and turns the market around. The larger the bullish candle in

Candlestick signals - The Doji

2009-11-23T08:20:00.000-08:00

The doji is candlestick chart pattern consisting of one candle line. The ideal doji occurs when in a trading session the opening and closing prices are the same, but this rule is sometimes relative and you can consider candle line as a doji even when the opening and closing prices are few points or ticks away from each other. For example this is especially true in the forex market due to slightly

Candlestick chart patterns - Spinning tops

2009-11-19T05:26:00.000-08:00

From start, I will focus on single candle lines. Here belong also spinning tops. Some candle patterns consist of more candle lines, but we can get valuable information also from single candle line. Candlesticks help us visualize market psychology. They portray the battle between the bulls and bears. The essence of market move is in real body. Real body is part of candle line between opening and

Option Greeks-Introduction

2009-03-23T13:50:00.000-07:00

If you have ever traded options, maybe this scenario is familiar to you: you bought a call when you thought a stock was going to go up but that call lose value when the stock did go up and you didn't know why? It is because the price of option is not affected only by change in price of underlying asset but also by the effects of time and volatility. Many of us can relate to this situation. The

Introduction to Candlestick Charts

2008-11-06T02:37:00.000-08:00

What are candlestick charts? If you know something more about technical analysis, you probably know, that candlestick chart is type of chart used to describe price movement of an equity over time. In technical analysis in western world are more popular classic bar-charts than candlestick charts. Differences between these two I will show and describe later. One from reasons that candlesticks are

The Stock Market and Financial Crises that We Live In

2008-09-18T04:12:00.000-07:00

As you probably realize, we live in financial times, like one advertisement says. We realize this now more than ever, mainly because of recent news in the stock market and financial industry. Even big banks with long history like Lehman Brothers have serious financial problems and the whole financial sector has bad times.Stock Market has record drops since 9/11 and majority of people are scared

How Does the Stock Market Work?

2008-08-21T03:30:00.000-07:00

In order to properly answer the question how does the the stock market work, first I have to explain what is the stock market. The stock market is a place where stocks are traded. And as for every market, there must be buyers and sellers. Buyers represent demand and sellers represent supply.The price of any stock is determined by relationship between supply and demand, by market participants

Example of One from My Last Option Trades - Call Option on ESI

2008-05-12T12:43:00.000-07:00

In this post I want to show you example of one from my last actual option trades with call option on stock ITT Educational Services(ESI) with exact option name ESI GP. I don't want go into more depth, but only to show you how can option trade look like. In the picture below you can see chart of ESI(as underlying stock of this option) with enter and exit of the trade and other circumstances.With

Technical Analysis of Stocks - part 2

2008-04-02T11:41:00.000-07:00

Technical analysis is based on principle that history repeats itself. Behind this principle is human psychology. Charts reflect psychology of the market. Chart patterns have been studied and categorized over one hundred years. Some of these patterns have worked well in the past, so it is assumed that they will continue to work well in the future. These are based on study of human psychology,

Technical Analysis of Stocks

2008-03-06T09:27:00.000-08:00

For some of you who don't know what is technical analysis and how it works, I will try to explain it to you what it is about. Technical analysis is trading and investing tool that involves the study of past share prices or indices and is helpful in showing you when to enter and exit the trade. For technical analysis are needed charts. One example of chart you can see in the picture below. It's

Paper trading - ground school for traders

2008-02-11T04:24:00.000-08:00

What is paper trading? It's trading without real money - trading only on the paper. And without money means without real risk of losing real money. As pilots are learning to fly first on the simulator so should do traders (to simulate trade). On simulators pilots don't risk loss of their life or destroying plane (and traders losing money). But they are improving their skills. I hope that this

Benefits of Stock Options

2008-01-08T14:31:00.000-08:00

Stock options are wonderful financial instrument and tool. Maybe you heard famous saying that options are risky. Sure it's true when you know nothing about them. I think that not enough knowledge is the only serious reason why not to trade options, because benefits of options trading can easily outweight any obstacles. This is list of some benefits.Leverage. One from the most important words

A word about risk

2008-01-05T12:06:00.000-08:00

Trading and investing and no matter in what - be it stocks, real estate, oil or stock options has associated risk. In every aspect of life there is a risk. When you go to shop you have some probability that you will have a car accident. When you approach someone you don't know you risk that you can be rejected. Risk is part of life. We must face it. Life does not offer a money-back guarantee -

Major Stock Exchanges

2008-01-04T08:08:00.000-08:00

To recognize on what stock exchange a symbol is traded use the following rule :Amex 2 to 3 Letter symbolNYSE 1 to 3 Letter symbolNasdaq 4 Letter symbolAMEX (American Stock Exchange) New YorkTrades small to mid-size stocks. The AMEX is known to have more liberal policies concerning company listing, as most of its companies are generally

The Psychology of Trading

2008-01-03T09:54:00.000-08:00

The basic principle of trading psychology is that trading should be based on rational decisions and not on emotional reactions. Emotions are not wanted in trading. Emotional control from large part determines trading success. Why?Because you could do everething good and other factors(I will takl about them later in this blog) can show that it's time to close your position and that greed pig

Options trading for beginners

2008-01-02T09:09:00.001-08:00

When you buy a stock you purchase partial ownership in the company. An option is a contract that gives the owner the right but not the obligation to either buy or sell the underlying financial instrument on wich it is based. Value of the stock option is in part based on, or derived from, the value of it’s underlying stock. I will try to explain this later in this post on one example. As probably everything what we do has some motivation my trading also has some deeper reasons. One from main reasons I like about stock and option trading are big profits. With stocks you can have common profits in tens of percent in time period of few months and with stock options are common gains even in hundreds of percent in few days or weeks. This is my first post so forehand I would like to welcome you in my blog. My intention is to share my knowledge and personal experience with you. At start I will talk about stock and option basics and later I will move on to more advanced informations. I will talk about stock market, option trading strategies, trading