Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Thursday 03/04/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 02/25/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 02/18/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 02/10/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 02/03/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 01/20/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 01/13/2010

Average session recording is approximately one hour and requires Windows Media Player installed on your computer. If you do not have this, Click on Windows Media Player and choose “Download Now” BEFORE you try to download your free video.

If this is your first time playing these videos on your computer, you must download the codec or you will not be able to see the charts. Click here to download codec.

Stock Chat – Wednesday 01/06/2010

Technical analysts use the moving average by drawing upper resistance and lower support lines to help them anticipate the price direction of a stock. They will also draw straight lines to connect tops or bottoms so that they can identify upper and lower price extremes. They also add parallel lines in order to identify the channel in which prices should be restricted to or contained within. The stock trader can be pretty confident that their stock prices are moving as they anticipate, as long as the prices do not move out of this channel that they have created using these two lines.

Bollinger bands are used in order to assign the upper and lower bands as price targets. Again, many traders will use these bands in order to determine overbought or oversold areas and will sell when the price touches the upper Bollinger band and will buy when it hits the lower Bollinger band.

Bollinger bands measure price volatility through a mathematical formula using standard deviation. This shows how the price varies from its true value enabling traders to figure out almost all of the price data that is needed between the two bands. This is a very basic explanation of Bollinger bands however it should give you the general basis for why they are used and what they are. 

Please also read about Japanese Candlesticks which is a trading strategy used by some of the world’s most successful traders along with other forms of technical analysis. It is the fastest way for new investors to quickly and accurately read stock market charts when trading stock. Once you are comfortable with the major candlestick signals, expand your expertise by learning the secondary Candlestick Patterns. Combine these with your favorite technical indicators and you have the perfect trading arsenal for evaluating stocks, currencies, commodities, or exchange traded funds.

Three CBOE volatility indexes
1) The CBOE (Chicago Board Options Exchange) shows the market’s expectation of 30-day volatility under the ticker symbol; VIX. Based upon implied volatilities of S&P 500 index options it provieds a broader measure of market risk. The VIX  is also referred to as the ‘fear gauge’ as stock investors‘ reactions are visible in price movement. The VIX. (CBOE introduced the VIX in 1993 based only upon eight S&P at-the-money put and call options, and expanded to cover S&P 500 approximately ten year after)

2) The VXN displays volatility based upon the Nasdaq 100 and it is
calculated using the same system as the VIX. However, the VXN characterizes implied volatility of a theoretical 30-day option that is at-the-money.

3) VXD tracks the Dow Jones Industrial Average (DJIA) and it is a reflection of ‘anticipated’ stock market volatility for this index.

Why does trading volatility matter?
By its very definition; volatility means to change suddenly in an unpredictable or potentially dangerous manner. It only makes sense to place as  many odds in your favor when trading stock, and these indexes were devised to help stock market investors  make an educated guess about implied volatility. The higher the volatility the higher your risk for placing the trade, and the harder it becomes to profit. Just one of the many facets of how the stock market works.

The ability to measure volatility becomes extremely important in stock option trading  Not only do option traders predict future price direction, they must work against time decay during the time-frame they plan to hold their option position. Regardless of your particular trading style, all stock traders can take a look at the trading volatility indexes to measure investor sentiment.

I hope you found this brief introduction helpful and invite you to join me, Rick Saddler, every Wednesday evening at 8PM Eastern Time for my free public stock market webinar sessions. (password to join the session is displayed under Weekly Chat Session column on the right-hand side of our site)