When traders first come to TradingMarkets, one of the first questions is,
"Where do I start?"
For everyday traders looking to gain a quantified trading edge, you have 2
basic choices:
PowerRatings (for Traders) or
TradingMarkets Indicators. Let's focus on the Indicators for today.
TradingMarkets Indicators provide traders with quick access to an overall
market snapshot. The Indicators are broken down into two different categories:
Bullish and Bearish.
The main premise underlying these tools is that extended market
conditions will usually revert to the mean. If the market rallied like
gangbusters for the past week, the odds are that overall market conditions are
overbought, and over-extended, and history tells us that the market will
sell-off to "get back to normal." Similarly, if stocks have sold off for the
past week, market conditions are probably oversold and extended, so traders
should be looking for the mean-reverting bounce.
If you understand this simple, underlying concept (reversion to the mean),
then the TradingMarkets Indicators opens up a whole new way to look at the
market. Let's take a look at one of the Indicator pages.
Here is a screenshot of today's list of stocks which have made new highs for
5 or more consecutive days.
These stocks are extended and overbought. Our database of literally millions
of trades points to the historical fact that extended stocks usually revert to
their mean. An oversold stock will tend to bounce, and an overbought stock will
tend to fall in price.
Here is a chart of Take-Two Interactive Software (TTWO | Quote | Chart | News | PowerRating) , which
has a PowerRating (for Traders) of 3.
TTWO has rallied more than 30% in about 1/2 a month. History proves to
us that these types of rallies are not sustainable forever. TTWO will eventually
pull back from its extended, overbought levels; this stock will not rally
into infinity.
Use TradingMarkets Indicators to find and exploit these edges, every
single day.
Sign up for a free
TradingMarkets subscription to try out TradingMarkets Indicators for 1-week,
no strings attached.
The VIX Options Markets are Exploding -
Click Here to Learn How To Trade Them Wednesday
This Wednesday, September 5 at 4:30 PM Eastern Time (1:30 PM Pacific) we will be
holding a special online presentation for the TradingMarkets VIX Options Trading
Course.
Click here to register - This session is strictly limited to 50
participants.
