Those of you who’ve been with me for a while know I like to say the first move after the Federal Open Market Committee’s latest meeting is usually the wrong move…
And the latest Fed rate hike was a doozy…
The U.S. central bank announced a 0.75% benchmark interest rate hike to a range of 1.5% to 1.75%, its biggest hike since the Clinton administration way back in 1994.
Fed Chair Jerome Powell admitted the move was unusual and said he didn’t expect hikes this big to be common moving forward. He also said he expects the Fed to raise rates again in July, either 50 or 75 more basis points, and stocks rallied hard on the news — the wrong move.
There was no shortage of talking heads on CNBC claiming that the worst was over and a market bottom was in…
Then the bottom fell out Thursday morning… By lunchtime on the East Coast, the Dow was down over 750 points while the S&P 500 and Nasdaq sank 3.3% and 4.1%, respectively. So we gave back all the gains and then some in a flash, especially growth stocks, which got taken to the woodshed.
Everyone needs a few different chart patterns for beginners to focus on when they first start out trading.
Most people learning how to trade start with what I call an “indicator fascination.” They dive right into advanced analysis methods that confuse and oftentimes discourage them from continuing to trade.
When I first started out, I was under the impression that the more difficult methods would produce a higher probability of winning trades.
I purchased several books and magazines that discussed Gann Lines, Geometric calculations and Elliot Wave Principles that required a Ph.D. in physics to understand. I can promise you the only thing I learned after following these methods was to stay as far as possible away from them.
Swing Trading attempts to capture gains in a stock (or any financial instrument) within an overnight hold of several weeks. Swing traders use technical analysis to look for stocks with short-term price momentum. These traders may utilize the fundamental or intrinsic value of stocks in addition to analyzing the price trends and patterns.
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