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Proper Position Sizing
(2009/7/30 17:02)
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How large or how small should your position be in any given trade? Before I get into the answer to that, there is one prerequisite that supersedes everything, the liquidity of what you’re looking to trade. You need to keep your position size to as small of a percentage as the average daily money volume. You can estimate the average money volume by taking the price and multiplying it by the average amount of shares traded daily. If a stock that is trading at $1 averages in between 10,000 and 30,000 shares, the average money volume is probably in the ballpark of $20,000. How much of the average money volume do you want to be? The less the better, but there is no official threshold to stay under. I’d say staying under 2% is pretty safe, but if you know what you’re doing you can push that somewhat. This really only applies to penny stocks and other thinly traded stocks, but I figured I should cover that base just to be sure. If you’re trading highly liquid securiti ...
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Building a Solid Foundation
(2009/7/28 6:50)
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The purpose of this site is to break down what I consider to be the basic foundation of chart technical analysis. It’s intended for traders of all experience levels, though it’s going to ...
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Putting It All Together
(2009/7/23 19:18)
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Now it’s time to combine the basic concepts I’ve already gone over in my previous articles, and give you an example of how to use them together. You should have a good idea of how to dete ...
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Using Candlestick Patterns
(2009/7/20 4:22)
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There are a ton of candlestick patterns out there, and some of them have very specific rules and real funny names. While it doesn’t hurt to know all of them, I don’t think it’s nece ...
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Trading Support and Resistance
(2009/7/16 18:37)
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My last article went over how to spot support and resistance, but how exactly do you work that into your trades? This article will go over the basic methods of incorporating support and resistance in ...
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Identifying Support and Resistance
(2009/7/15 21:17)
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Before I tell you how I identify support and resistance, I’ll briefly explain what they are. Support is generally thought of as a price range or level where the security (stock, future, etc.) h ...
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Identifying Trends
(2009/7/14 18:33)
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If someone says to you that the market is in an uptrend, do you know what they mean by that? Obviously they mean the market is going up, but specifically what are they referring to? It’s been g ...
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The Very Basics of Candlestick Charts
(2009/7/13 17:40)
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There are a number of different chart types, and the difference between them is how they display the data. All charts plot the data by individual periods, and each period can represent as much or as ...
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What Can Charts Tell You?
(2009/7/12 19:10)
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In my last article I stated that charts completely reflect everything that is known about a particular security, but what exactly can you learn from them and how can you use it to your advantage? Cha ...
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Do Charts Work?
(2009/7/12 5:09)
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This question is the subject of many debates but it really shouldn’t be so disputed. The answer is yes, charts absolutely work and do exactly what they’re supposed to do, but the reason s ...
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Chartta.com -The Fundamentals of Chart Technical Analysis
Last Update 2011/7/27 15:09
