Options trading software has really become more powerful in recent years. At one time, the software that option traders used did little more than calculate the fair value of an option and possibly create in options P&L chart. These days, options traders can perform analysis which was not previously available to them.
If you look, you can find options trading software which includes the ability to create price charts. This means that you can do technical analysis and options analysis all in one piece of software. While this is not common, the fact that you're able to perform technical analysis and options analysis in one piece of software allows a trader to have a lot more flexibility in his approach to the markets.
Another development that options traders have benefited from is the availability of options data. Not that long ago, options traders were not able to obtain options data so easily. Options traders used to pay heavy monthly fees for the options data that they needed to obtain in order to create the types of spreads necessary to trade options affect only. But, in recent years, online brokers make a option data available for free to clients.
Modern day options trading software also has the functionality to scan the available options for different types of spreads and compile a listing for the active options trader. Selecting from a list of different options spreads is a feature which allows a trader to select those which meet his trading criteria. So, since a trader maybe looking at a diagonal spread, this can will show a listing of different diagonal spreads which more easily allows a trader to observe the characteristics side by side.
Options trading software which is and accessible has really changed as the need of options traders have changed. While the more sophisticated options trading software available today can take some time to learn, this added time can really help you select the spreads that help you achieve your trading goals.
Thursday, December 3, 2009
Tuesday, December 1, 2009
Benefits of Trading The Elliott Wave
Professional traders that use the Elliott Wave to understand the market's direction place themselves in a considerable advantage over those who do not. The decision to incorporate Elliott waves and their trading may seem obvious to some people and not others.
Some traders may not realize that that integrating Elliott waves into their trading can allow them to assess where the current market move falls within an overall sequence. This type of information can be quite beneficial. Being able to determine whether not the current swing in signaling the end of the current move, he in a position to more accurately assess the current trend.
Elliott waves allow a trader to observe one wave within another. One of the primary benefits that Elliott waves delivers is that the current wave can be broken down into a smaller wave which allows a trader to more easily correlate different time intervals. Knowledge of this type allows a trader to more easily understand how the relationship between a daily time frame in a 60 minute time frame complement each other.
After a trader is somewhat adept that it's Elliott wave understanding, he can begin to apply Fibonacci ratios to what he is seeing in the markets. This is the kind of information that could allow a trader to project where the current market swing could end. This is the type of benefit that that would allow a Elliott wave trader to have a significant advantage over others in the marketplace.
Even though you don't necessarily need to have a full understanding of Elliott waves, it is beneficial to understand that there is different information that can be derived from these techniques. For some, this information is pretty obvious. For those traders who haven't been exposed to Elliott wave trading before, using them can help them gain a different perspective on the postions that they may want to take in the markets.
Some traders may not realize that that integrating Elliott waves into their trading can allow them to assess where the current market move falls within an overall sequence. This type of information can be quite beneficial. Being able to determine whether not the current swing in signaling the end of the current move, he in a position to more accurately assess the current trend.
Elliott waves allow a trader to observe one wave within another. One of the primary benefits that Elliott waves delivers is that the current wave can be broken down into a smaller wave which allows a trader to more easily correlate different time intervals. Knowledge of this type allows a trader to more easily understand how the relationship between a daily time frame in a 60 minute time frame complement each other.
After a trader is somewhat adept that it's Elliott wave understanding, he can begin to apply Fibonacci ratios to what he is seeing in the markets. This is the kind of information that could allow a trader to project where the current market swing could end. This is the type of benefit that that would allow a Elliott wave trader to have a significant advantage over others in the marketplace.
Even though you don't necessarily need to have a full understanding of Elliott waves, it is beneficial to understand that there is different information that can be derived from these techniques. For some, this information is pretty obvious. For those traders who haven't been exposed to Elliott wave trading before, using them can help them gain a different perspective on the postions that they may want to take in the markets.
Monday, November 9, 2009
Elliott Wave Trading 101
A good study of ElliotWave theory would benefit the new traders as they do the professionals the world over who use them. The time taken to really understand then and where they can from can add more depth to ones trading. The advantages gained in implementing the theory can far outweigh the costs in terms of time to learn it.
R. N. Elliot (1871–1948) was a financial mastermind. His financial genius is reflected in his formulation of the Elliot wave theory, which is still being used successfully, 75 years from the time of its inception (1934). Elliot opted for the accounting profession when he was 25 years old, and then for the next 25 years, he occupied top financial positions in railroad companies in Mexico and Central America. During his stints, he rescued many companies from the brink of financial crises, earning himself the reputation of an expert business planner and organizer.
Eventually, Elliot moved into a hotel in Brooklyn, which was a stone’s throw away from Manhattan’s financial hub. In 1939, Elliot was contracted by the magazine Financial World to write a series of articles around his Wave theory. These articles further cemented Elliot’s rock-solid reputation with investors and fund managers.
In the year 1920, Elliot moved to New York and his reputation and expertise got him a top accountant position in a U.S. Government’s International project. Then in 1924, he was chosen as Chief Accountant of Nicaragua, which was then controlled by U.S. Marines. In early-1925, Elliot applied his expertise and experience in managing and restructuring the finances of Nicaragua – an entire country!
He suffered from the symptoms of an alimentary canal illness, which he had picked up from his Central American stint. His reputation was on the rise – his book was selling well, his background and references were the talk of the town, and he was an always-in-demand speaker, and his practice was booming. In the best of times came the worst of news – Elliot was diagnosed with pernicious anemia, a debilitating medical condition, and became bedridden at a relatively young age of 58.
In November 1934, Elliot presented his theory to Charles J. Collins, a reputed member of the financial community. Apart from exchanging telegrams, nothing much happened between the two until 1935 – the year in which the Dow index was in a bear grip and was falling to pieces. Everyone was bearish and it seemed like the end of the financial world.
According to Elliott, herd mentality in general follows cycles of optimism followed by pessimism, and the same holds for the minds of the investors/traders. These are reflected as a sequence of predictable ups and downs in the stock market, the ups representing the dominant trend and the downs the corrective phase in a bullish market - and vice versa in a bearish market. Elliott discovered that the wave patterns made on the charts had the unique mathematical characteristics of what came to be known later as "fractals" - mathematical/geometric structures that keep repeating themselves infinitely on an ever-diminishing scale.
By applying fractal mathematics to price movements in the market, Elliott developed his wave theory to make market predictions based on collective crowd behavior.
Elliot passed away in 1948, but his brilliant formulation – The Wave principle or The Elliot wave Theory – continues to produce amazingly accurate results till this day, rewarding the faithful in the process.
R. N. Elliot (1871–1948) was a financial mastermind. His financial genius is reflected in his formulation of the Elliot wave theory, which is still being used successfully, 75 years from the time of its inception (1934). Elliot opted for the accounting profession when he was 25 years old, and then for the next 25 years, he occupied top financial positions in railroad companies in Mexico and Central America. During his stints, he rescued many companies from the brink of financial crises, earning himself the reputation of an expert business planner and organizer.
Eventually, Elliot moved into a hotel in Brooklyn, which was a stone’s throw away from Manhattan’s financial hub. In 1939, Elliot was contracted by the magazine Financial World to write a series of articles around his Wave theory. These articles further cemented Elliot’s rock-solid reputation with investors and fund managers.
In the year 1920, Elliot moved to New York and his reputation and expertise got him a top accountant position in a U.S. Government’s International project. Then in 1924, he was chosen as Chief Accountant of Nicaragua, which was then controlled by U.S. Marines. In early-1925, Elliot applied his expertise and experience in managing and restructuring the finances of Nicaragua – an entire country!
He suffered from the symptoms of an alimentary canal illness, which he had picked up from his Central American stint. His reputation was on the rise – his book was selling well, his background and references were the talk of the town, and he was an always-in-demand speaker, and his practice was booming. In the best of times came the worst of news – Elliot was diagnosed with pernicious anemia, a debilitating medical condition, and became bedridden at a relatively young age of 58.
In November 1934, Elliot presented his theory to Charles J. Collins, a reputed member of the financial community. Apart from exchanging telegrams, nothing much happened between the two until 1935 – the year in which the Dow index was in a bear grip and was falling to pieces. Everyone was bearish and it seemed like the end of the financial world.
According to Elliott, herd mentality in general follows cycles of optimism followed by pessimism, and the same holds for the minds of the investors/traders. These are reflected as a sequence of predictable ups and downs in the stock market, the ups representing the dominant trend and the downs the corrective phase in a bullish market - and vice versa in a bearish market. Elliott discovered that the wave patterns made on the charts had the unique mathematical characteristics of what came to be known later as "fractals" - mathematical/geometric structures that keep repeating themselves infinitely on an ever-diminishing scale.
By applying fractal mathematics to price movements in the market, Elliott developed his wave theory to make market predictions based on collective crowd behavior.
Elliot passed away in 1948, but his brilliant formulation – The Wave principle or The Elliot wave Theory – continues to produce amazingly accurate results till this day, rewarding the faithful in the process.
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