Indicators we use in our analysis (part 23)

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Indicators we use in our analysis (part 23)

At FS Securities we use indicators on the chart to tell us the direction the market or stock will take. I have developed a mechanical system so that I take all emotions out of trading. The first I will introduce here is the moving average cross over.

 Moving Average Methods

Simple vs Exponential Moving Averages………..

 

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Indicators we use in our analysis (part 7)

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Indicators we use in our analysis (part 7)

At FS Securities we use indicators on the chart to tell us the direction the market or stock will take. I have developed a mechanical system so that I take all emotions out of trading. The first I will introduce here is the moving average cross over.

Moving Average Envelope

 Another strategy that incorporates the use of moving averages is known as an envelope.

This strategy involves plotting two bands around a moving ...

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Cntd……. Ratio Spreads—Buying and Selling Unequal Amounts of Options

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Ratio Spreads—Buying and Selling Unequal Amounts of Options

The call ratio back spread is a hedged directional trade where we expect to profit from a strong upward movement, while hedging our downside.

If the stock price does rise, you will profit from the upward price movement—similar to a long call position. If your expectations turn out to be wrong, and the market moves against you, this is positioned in such a way that you either do not lose, or may ...

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cntd… Understanding Volatility—Of Vital Importance to Option Traders

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Understanding Volatility—Of Vital Importance to Option Traders

Volatility is often the most neglected of the major factors that influence option prices.

Volatility is a vitally important consideration in options trading.

Every asset has quiet periods when its options are cheap, and volatile periods when its options are expensive. Professional option traders are always aware of current volatility levels in relation to their historical context.

To gain that perspective, they view historical volatility charts. The figure below shows a sample chart:.………..

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