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What is accommodation trading?

Accommodation Trading is when two traders enter into a non-competitive trade agreement which disregards the current market price for the securities being traded. The primary reason to engage in accommodation trading is for an investor to avoid taxes by harvesting more losses than actually occurred. One investor will buy shares from another investor for a price significantly below the market value so that the selling investor can report more losses. The partners will typically agree to allow the selling party to buy the shares back later at the same price. Continue reading...

What is an 'expiration date' in reference to option trading?

An ‘expiration date’ refers to the time when an option contract must either be acted upon by the owner (buying or selling the security in question) or left to expire. With derivatives such as options and futures, there will be an expiry, or expiration date in the contract, after which they expire worthlessly. Most options contracts will expire in 3, 6 or 9 months from when they are generated, and they all share the same expiration day of the month on their contracts in the United States, which is the 3rd Friday of the month at 4 PM. Continue reading...

Paper Trades: Learn How to Trade, Risk-Free

Tickeron's Paper Trades are the best way to start trading on paper without losing money. Paper Trades can be used as a testing environment for ideas generated using other products. You can review your gains or losses and adjust your trading style, risk-free. Paper Trades are available for 4,000 stocks, 1,000 ETFs, 30,000 mutual funds, 500 cryptocurrencies, and 100 Forex pairs. From any Tickeron, product page, click the Paper Trades button to extract your trade ideas and test them using Paper Trades. The system will run a record of the securities you want to buy and sell, and will generate the modeled outcome. The more Paper Trades you make, the more statistics Tickeron will generate for you to determine your trading style and preferences. Continue reading...

What is Insider Trading?

Simply put, insider trading is the crime of trading in a company’s stock based on information not available to the general public. According to the efficient market theory, any publicly available information is immediately "priced-in" to a stock, so any article you might find in a news publication is not going to give you a competitive advantage for a stock's future price movements. Insider trading tips give an unfair advantage to the holder of the information, since the market has not had a chance to react to it yet. Of course, insider trading is illegal and several notorious cases have been well-publicized, like that of Martha Stewart. She was jailed. Continue reading...

What are trading models?

Trading models are emotionless systems for decision-making in trading that can be automated or just used for reference. They tend to have logical parameters, such as “if x, then y” which can use popular trading indicators to implement a strategy that might only be used in certain conditions. Trading models are strategies employed with a specific design. Different trading models will use different technical indicators or types of charts to define and search for certain conditions in which a strategy can be used. Once the conditions are met, the model provides the decision-making logic that is intended to carry out a profitable trade without guesswork or emotion. Continue reading...

Day trading with RSI

Relative Strength Index (RSI) is a momentum oscillator developed by Welles Wilder. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI over 70 (out of 100) can be considered overbought, while a security with an RSI under 30 (out of 100) can be considered oversold. Continue reading...

What is active trading?

Active trading is the pursuit of returns in excess of market benchmarks. Investors are advised to have a diverse portfolio, to hedge against the risk of seeing future financial plans devastated due to significant losses in one holding. When attempting to diversify, investors will hear from the increasingly popular camp which believes that the best strategy is to use only passive index funds, which follow indexes using computer algorithms and have low expense ratios. Continue reading...

What are Envelopes and Trading Bands?

Moving average envelopes and trading bands help traders filter their decisions to trade. These tools set thresholds on the amount of movement above and below a moving average to trigger a decision to trade (or at least prompt further consideration by the trader). A moving average envelope often takes a moving average line for a security or index and duplicates it, moving one line a certain percentage above and one a certain percentage below (the distance may depend on volatility levels). Price fluctuations in a security then might trigger a decision to sell when the price hits the upper band, or a decision buy when the price hits the lower band. If it crosses the bands it might be seen as a new trend. Continue reading...

What is technical analysis in trading?

Technical analysis is a method of evaluating the worth and probable future direction of security prices using charts and data concerning prices and volume. This is the counterpart to fundamental analysis, which looks at the physical operations of a company and their place in the market to determine value. Those who practice technical analysis are sometimes called “quants” or chartists because they believe that the most important information about a security will be found in the data on the price, volume, and the moving averages and volatility associated with them. Continue reading...

Trader Clubs

Tickeron’s Trader Clubs is a great opportunity to be a part of a community, interact with fellow traders, exchange ideas, and compare your skills. These clubs also help create an audience if you want to monetize your skills in the future. To access from the menu bar, simply click on the marketplace and then select Trader Clubs. Here in Trader’s club, you have two options You can start your own club or join any club that suits your trading or investing plan. Continue reading...

Keywords: stock trading, Tickeron,

How to use Bollinger Bands in trading?

Bollinger Bands were developed by famous trader John Bollinger as a technical analysis tool to discern the likely trading range of a security. A Bollinger Band is typically two standard deviations from a moving average line, both above and below the average. Standard deviation is another word for the average volatility of a price over a length of time. It is typical for a trader looking up the historical price chart for a security to compare it to a moving average line. Continue reading...

How to use the Accumulation/Distribution in trading

The Accumulation/Distribution Indicator (originally called the Cumulative Money Flow Line) tracks cash flow into or out of a security and correlates the cash flow changes to changes in the security price. By following the trading volume into or out of a security, it establishes the degree of correlation between this trading volume and the price of the security. Accumulation/distribution is designed to reveal divergences in price trends (specifically between stock price and trading volume). These divergences indicate the degree to which a security may be overbought or oversold at a given time. Continue reading...

How to use the On-Balance Volume in trading?

On-Balance Volume (OBV) is a popular leading indicator introduced in the 1960s by Joe Granville. OBV is a line built using differences between daily trading volume – in Granville’s estimation, the major driver of market behavior – adding the difference on days that the market or stock moves up and subtracting the difference on days when the market or stock moves down. It looks for instances of rising volume that should correlate with price movement, but price movement has not occurred; additionally, OBV can be used to confirm lag. Continue reading...

How to use Momentum Indicators in trading

A momentum indicator allows for a quick comparison of a security’s current price relative to its past prices using a flexible time period, allowing traders to decide the parameters. The formula to calculate momentum is M = V – Vx (where V is the current price and Vx is the closing price from x number of days ago). A current price in excess of past price is a positive momentum indicator; a lower current price represents negative momentum. Continue reading...

What is After-Hours Trading?

After-Hours Trading on the Nasdaq can take place after market close from 4-8pm EST or in the pre-market hours from 4-9:30am EST. Pre- and Post-market trading used to be reserved for large institutional investors or high net worth individuals, but is now made possible through the improvements to electronic trading networks and the demand from individuals trading from their computers at home. Interestingly, institutional investors can trade anonymously on the after-hours Nasdaq market, such that virtually no one knows what positions they take during that time. This is called trading in “dark pools of liquidity.” Traders on the after-hours Nasdaq cannot make certain kinds of trades or use certain instruments. Continue reading...

What is swing trading?

Swing trading is active trading that is not frequent enough to be categorized as day-trading but generally follows short-term trends. Swing trading can describe long or short positions traded on upswings and downswings of a security or index, and these positions are generally held from one day to two weeks. Generally, these are going to be momentum investments which are entered into after there seems to be confirmation of a trend, and the positions are closed out when there seems to be confirmation that the trend has ended. Continue reading...

What is an Alternative Trading System (ATS)?

An ATS is a platform separate from an exchange where securities are traded. ATSs provide marketplaces for buyers and sellers to transact in securities, much like a stock exchange. However, they are not available to the entire investment public, and they do not necessarily provide public information on the best prices available to traders within their system. They also do not set rules governing the conduct of subscribers and they perform no self-regulation, while exchanges perform all of these functions. Continue reading...

What were the Biggest Insider Trading Scandals?

In 2007, Qwest Communications CEO Joseph Nacchio was convicted of making over $50 million dollars through illegal trades. Essentially, Nacchio knew that the company wasn’t doing well, while telling the public that it was on track to pursue highly exaggerated revenue gains. He capitalized on the inflated stock, and was, of course, caught and found guilty. He’s currently serving a six year prison sentence. Continue reading...

How to use the average directional index in trading?

Trend traders can use the Average Directional Index (ADX) technical indicator to spot and confirm the strength of a trend in a security, then combine the ADX reading with other indicators to determine whether it makes sense to trade with the trend. Click here to view the current news with the use of other Technical Indicators Technical Indicators are charting tools that appear as lines on charts, or as other kinds of graphical information, and serve as guidelines for buying and selling opportunities. Traders use technical indicators like the ADX to make predictions about future prices. They verify how well a specific indicator works for a particular security, often by calculating the odds of success under similar market conditions to guide their actions. Continue reading...

How to use Simple Moving Averages in trading

Investors and traders are in constant search of tools they can use to gain any possible advantages from shifting markets. Technical indicators are especially vital parts of any trader’s kit, and few indicators are as consistent (and dependable) as moving averages. A Simple Moving Average (SMA) is a technical indicator that can help traders determine whether a bull or bear trend will continue or reverse course. It typically adds up closing prices for a given time period, then divides that figure by the number of time periods used for the average. Continue reading...