The Federal Open Who?


Background information:

If you’re actively trading, one thing you’ll hear other traders talking about from time to time is “FOMC Day”. Eight times a year, the Federal Open Market Committee, or FOMC, gets together and discusses various topics including economic growth, unemployment, interest rates and inflation. After the meeting the committee makes an announcement to the world regarding what they discussed. Often you’ll see the market react violently to this announcement, which usually happens at 2pm, so it’s worth it to understand exactly what implications these meetings have, what the FOMC is talking about and how …


Trading a Parabolic Bounce


I figured I’d do something a little different here since I had some free time during the day. I'd like to give everyone a peek into my thought process on some of the stocks I’m trading. One of my favorite setups to play is a parabolic bounce where the stock has been beaten down a lot over a period of several days and then has a strong bounce which you can hold for a couple days as the early shorts take their profits from way above.

My most recent parabolic bounce trade was in REN. It’s actually …


Effective Position Sizing


Among the many mysteries you’ll encounter as you progress through your trading career, the mystery of effective position sizing will undoubtedly be one of the biggest and most confusing. The mystery seems simple enough to solve, right? Since the solution is really just the answer to the simple question, “How many shares should I trade?” it should be a piece of cake to figure it out. It’s not as simple as you might think though, and here’s why:

When traders, especially new traders, question what size position they should take, most often they are only questioning when …


Crunchy Leaves


Have you ever been walking down a sidewalk or a street on a crisp fall day and seen a really crunchy looking leaf lying on the ground?

Admit it, you wanna step on that leaf!

We all do it. It’s like some weird addiction. When you see a crunchy looking leaf, a pinecone, a collection of branches, you have to step on it. We live for the crunch! It’s so satisfying! It’s kinda like scraping the bottom of your ice cream bowl to make sure you got all the chocolate-syrup-melted-ice-cream-mixture out of it, or sopping up the …