Futures Trading|Optimus Futures - Commodities and Futures Education Articles

How Renko charts can improve your outlook on prices

 

Renko charts are often an overlooked way of analyzing price data and charting markets. Renko charts eliminate the time component of trading and only focus on price itself. Potentially, Renko charts can filter out a lot of the market noise and display price in a much more organized and simpler to interpret way. Of course, Renko charts come with a few disadvantages and we will take a close look at the pros and cons of Renko charts.

 

Renko 101

Before we get into the specifics, we need to understand what Renko charts do and why they look different than regular candlestick charts.

Conventional candlestick charts print a new candlestick every hour, 4 hours, day, week or other time interval the trader chooses as his period setting. Renko charts, on the other hand, are

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Reading Market Sentiment with Price Bars – Inside and Engulfing

 

While some might argue that candlesticks are just a snapshot of market activity without any true meaning and with even less forecasting value, the trader who can interpret the subtle clues provided by candlesticks and price formations can increase their odds.

In this article, we want to explore two of the most commonly used three-bar price patterns – the inside bar and the engulfing pattern. In contrast to other candlestick patterns, the three-bar formations put more emphasis on market context and thus, allow traders to understand what is going on inside price.

 

The Inside bar

The inside bar shows a market contraction and a consolidation period often just before a reversal. The inside bar pattern consists of three candlesticks where the second forms completely inside the previous bar, hence the name. The

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When do losing streaks end? What is the gambler’s fallacy?

 

Variance drives trading performance and influences the way traders think and act. Variance means account volatility and it describes how the outcome of your trades impact your account development.

In trading, results can’t be forecasted and you will never know when you enter a winning or losing streak, or how long it will last once you are in it. Therefore, understanding variance and how wrong assumptions can lead to significant under-performance is of great importance to traders.

 

Gambler’s fallacy

The gambler’s fallacy describes a phenomenon when people misjudge the likelihood of events. If something happened more frequently than you’d expect it to happen under normal circumstances, people then mistakenly believe it’s going to happen less frequently in the near future.

For example, if you play roulette and red comes up 4 times in a

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The makeup of successful traders & observations from a veteran broker w/ Matt Zimberg of OptimusFutures

 

Last week, our very own Matt Zimberg had the pleasure of being interviewed by Aaron Fifield from Chat with Traders – http://chatwithtraders.com/ep-056-matt-zimberg/. Hit the Play button above to listen to the podcast.

Topics Included:

  • Why good traders typically have the ability to find order in chaos, and have done something successful in other areas of life – building a method around success.
  • Common misconceptions about experienced traders; I explain how many traders still experience psychological challenges, and actually trade unsophisticated methods.
  • How to go about developing your own methodology, and the three building blocks that should be understood. Plus, the downside of imitating others.
  • Exploring the topic of returns – how to manage expectations, and how independent traders differ from large Wall Street hedge funds.
  • Discuss the overlap between trading

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Price, Volume and Open Interest – The 3 components of good market analysis

 

Futures traders have the benefit of having access to volume and Open Interest data.  This isn’t possible in other markets such as Forex trading. In order to form a sophisticated trade analysis and make reasonable assumptions about what is happening on your charts, being able to combine the information provide by volume, Open Interest and price can give traders an extra edge.

 

Volume

Volume shows the amount of trading activity in a given market on any given day. Rising volume means that there was more trading activity and more contracts were traded than on the previous day.

During trends, high and rising volume means that trading activity supports the ongoing trend and a trend continuation is likely because more investors (or more contracts traded) support current price movements. Technical analysis also uses

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