Education

Uncovering Value: Price Discovery And Irrational Investing Behavior

This post was written with Chris Kerlow and Craig Basinger. The essence of money management can be encapsulated in searching for investments that are trading below their intrinsic value. In theory, it works like this:  Buying these companies low, and as the market comes around to realize their intrinsic value,…

Want To Automate Your Trading Edge? Start Here

I have spent most of this entire year working on automating my edge. For my style of swing trading, the only discretionary input now is picking which setups I actually want to enter. Scanning, setups, triggers, sizing, stop/target placement, trailing stop etc. has all been standardized and taken out of…

Using The $VXST To $VIX Ratio For Shorting $VXX

Recap:In our first article we examined the ratio of the CBOE VXST Short-term Volatility Index (INDEXCBOE:VXST) to the CBOE VIX Volatility Index (INDEXCBOE:VIX) as a method to improve long entries in the S&P index.  In last week’s article, we shared some preliminary numbers, using peaks in the ratio to identify opportune…

How To Take Advantage Of The Earnings Catalyst

A catalyst can provide what most traders I know prefer…volatility, or a higher than average increase in price movement. Trading Catalysts can range from potential drug approval, sales numbers, analyst day meetings, product announcements, etc. Some catalysts have known dates (e.g., Apple $AAPL product announcements, analyst day meetings); others can…

Backtesting The VXST VIX Ratio For Trading The S&P 500

Last week, we took a dive into a key volatility ratio that traders can use for timing equity trades. Recap:  In last week’s article, we examined the ratio of the CBOE VXST Short-term Volatility Index (INDEXCBOE:VXST) to the CBOE VIX Volatility Index (INDEXCBOE:VIX). As you can see from the chart…

What The VXST:VIX Volatility Ratio Is Saying About Stocks Now

With the lack of a buyable stock market dip dominating the financial news (see: WSJ’s “Markets’ Steady Climb in 2017 Defies Historic Odds“), many traders are waiting for an opportunity to enter the market on the long side and participate in what is shaping up to be a low volatility…

What Does “Edge” Look Like?

Everyone talks about edge and every successful trader I know has one (most have a few trading edges or more). However, what does “edge” actually look like? The quest for your first trading edge or simply adding one to your arsenal can be a much easier task if you understand…

Investing Trends: Why It Pays To Stay In The Now

A Simple And Powerful Concept Eckhart Tolle’s New York Times Best Seller The Power Of Now has sold over 3 million copies worldwide and has been translated into over 30 languages. The basic premise of the book is captured in the excerpt below: “Nothing has happened in the past; it…

Options Education: How To Trade Put Ratio Spreads

The put ratio spread is generally considered a neutral options trading strategy, although it has the ability to make a profit in up, down and sideways markets.  For more, check out my ultimate guide to trading Put Ratio Spreads. Yes, it can make money no matter which way the market…

Three Strategies For Buying The Dip

Buying the dip in any stock or index can be a difficult task for an active investor.  Not only do you have to worry about trade location, but also key factors such as initial position size and risk management parameters.  There is a lot to take in and easily second…