Category: Blog Posts

Extended Hours Trading: Benefits, Drawbacks and Strategies – TrendSpider Blog

Imagine that a stock that you’re following reports blow out earnings after the closing bell. Wouldn’t it be nice to purchase the stock before the market opens the next day? Extended hours trading enables you to make these kinds of trades, but there are important trade-offs to consider.

Regular stock market hours run from 9:30 a.m. to 4:00 p.m. Eastern Time every weekday (except holidays). If you want to react to news outside of these hours, you can place trades during extended hours sessions, including pre-market starting as early as 4:00 a.m. and after-hours as late as 8:00 p.m.

In this article, we will look at how extended hours works, important differences, benefits and drawbacks, and some strategies for active traders to consider.

Technical Analysis and Self-Fulfilling Prophecies – TrendSpider Blog

Imagine that you come across a stock that’s forming an ascending triangle pattern. You know that a breakout is likely to occur given the series of higher lows, and sure enough, the stock breaks out the following session on high volume. There was no fundamental news to justify the breakout—the price movement seemed to occur out-of-the-blue.

Did the ascending triangle pattern predict the breakout? Or, did the chart pattern cause the breakout? Does the answer really matter in practice?

Let’s take a look at these questions, what drives prices, and how traders can profit.

What’s the Relationship Between Oil and the Dollar?

Most traders have noticed the inverse relationship between the dollar and commodity prices—include crude oil. While this isn’t surprising for commodities priced in dollars, the inverse relationship also holds true for commodities priced in other currencies. Commodity traders should keep these relationships in mind when trading futures contracts, particularly when the dollar index experiences significant movements due to interest rate decisions or other factors.

Let’s take a closer look at the relationship between crude oil and the dollar and what it means for traders.

How to Trade Earnings Announcements with Technical Analysis – TrendSpider Blog

Predicting the reaction to an earnings announcement is notoriously difficult. Even if a company misses on revenue and income, the stock price could rise sharply higher if the market’s expectations were low, future guidance was better than expected, or the conference call contained some bullish language. The sharp reactions to earnings can also blow up technical charts as prices move beyond strong support and resistance levels.

Let’s take a look at how technical analysis is best used to capitalize on earnings announcements.