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What Chaikin Money Flow Can Tell you About the Markets

With so many technical tools available, it’s easy to get confused.  But with time, patience and plenty of practice, it gets easier to understand. 

For example, some traders believe that Chaikin Money Flow (CMF) and the Money Flow Index (MFI) are the same thing.  However, the only major similarity between the two is that they are both commonly used momentum indicators.

And that’s pretty much where the similarities end.

The Worst Mistake Traders Make All the Time

You’re in the kitchen.  You knock the knife off the table.

As the blade begins to accelerate to the floor, what do you do?  Do you put your hand out, hoping it won’t cut you?  Or, do you allow it to safely hit the floor?

Let me ask that another way.  If you found a stock in the middle of a falling knife pattern, would you put your money in harms way, hoping it doesn’t destroy your account.  Or would you allow the stock to safely bottom out before buying?

Options Trading 101: Why LEAPS?

On October 15, 2007, the very first baby boomer to file for social security was Kathleen Casey-Kirschling.  Behind her, another 80 million baby boomers were preparing to retire, too, over the next two decades.  More than 10,000 were about to retire by the day.

Long and Short Butterfies

The Option Butterfly Strategy is a limited risk and limited profit trade, but on a typical butterfly trade, the profit potential is much higher than the potential loss and can offer a large positive Reward-to-Risk return on capital. The Butterfly Spreads involve 3 different option strike prices, all within the same expiration date, and can be created using either calls or puts.

Butterflies are very dynamic and can be traded for a variety of different reasons with different goals in mind such as Income, Directional, Non-Directional and Hedging.

Long and Short Condors

Most people invest with the expectation that a stock will go up in price. Others look for stock value to decrease. But is there a way to invest in stocks when the market is flat? There is a way to trade sideways markets with iron Condors.

The Iron Condor is a volatility strategy, where profits are based on an increase or decrease in the implied volatility of a stocks's option.

Long and Short Strangles

The option strangle is a volatility strategy, like the straddle, that can make a profit based on an increase or decrease in the implied volatility of a stock's option.

The difference is that the strikes are not set ATM but are set OTM.