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More About This Title Trading Options + Website: Using Technical Analysis to Design Winning Trades
English
Though still not widely practiced or accepted in the options market, technical analysis is becoming increasingly common. As the practice spreads, traders are discovering how useful technical analysis is for determining clear entry and exit signals. Trading Options: Using Technical Analysis to Design Winning Trades takes the standard technical analysis approach and applies it to the options market. Author Greg Harmon combines technical analysis with a deep understanding of the options market to explain how to design technically created trades that lead to outsized gains with low costs of entry and managed risk. The book covers trend determination, security identification and selection, tools and trade design, and executing, hedging, and adjusting trades.
- Ideal for individual investors and options traders
- Identifies and applies mainstream technical analysis methods to the volatile options market
- Perfect for stock traders that wish to delve in to technical analysis and options
- Written by the founder of Dragonfly Capital Management, which provides daily technical analysis of securities markets and trade ideas, and CIO of Presidium Capital Management which provides money management for clients
English
GREG HARMON, CMT, CFA founded Dragonfly Capital Management, LLC to provide daily technical analysis of securities markets and consulting services to the marketplace. He is also a Founding Partner and CIO of Presidium Capital Management, an asset management firm investing for clients in separate accounts. Prior to that, he spent time trading in the Securities markets beginning in 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy, and Director of Equity and Portfolio Swaps Trading at Chase Manhattan, State Street Corporation, and BNP Paribas. Greg earned an MBA in Finance from NYU Stern School of Business, and a BS in Mechanical Engineering from Cornell University.
English
Foreword xi
Introduction 1
Part I Identifying and Understanding the Trend 7
Chapter 1 Identifying the Major Trend 9
Market Influencers and Intermarket Relationships 14
Significant Market Ratios 19
Other Indicators 22
Conclusion 27
Chapter 2 Sector Review Analysis 29
Case Study: Sector Ranking 30
Relative Strength 37
Conclusion 38
Part II Technical Analysis for Identifying Individual Stocks 41
Chapter 3 Classical Technical Analysis 45
Support and Resistance 45
Patterns 49
Conclusion 63
Chapter 4 Japanese Candlestick Patterns 65
Reversal Patterns 66
Continuation Patterns 76
Indecision Candles 80
Conclusion 83
Chapter 5 Derived and Quantitative Analysis 85
Fibonacci Analysis 85
Harmonic Trading 91
Elliott Wave 100
Andrews’ Pitchfork 101
Conclusion 103
Chapter 6 Price Derivatives, Momentum, and Other Indicators 105
Relative Strength Index (RSI) 105
Moving Average Convergence/Divergence (MACD) Indicator 110
Bollinger Bands 112
Moving Averages 114
Conclusion 119
Chapter 7 The Watch List and Initial Plan 121
Create the Mosaic 121
Other Information 123
The Plan 125
Conclusion 130
Part III Options Strategies 133
Chapter 8 Introduction to Options 135
Definitions 135
Expiration and Exercise 136
Contract Size 137
Price Terminology 137
Why Use Options 138
How Different from Stock 139
Option Tables 140
Some Basics Applied 142
Conclusion 144
Chapter 9 Options Combinations 145
Covered Call or Buy Write 146
Long a Put or Call 147
Short a Put or Call 147
Long a Put Spread or Call Spread 149
Short a Put Spread or Call Spread 150
Long a Ratio Put or Call Spread 152
Long or Short a Calendar 154
Long or Short a Diagonal 156
Long or Short a Butterfly 158
Long or Short a Straddle 161
Long or Short a Strangle 163
Long or Short an Iron Condor 164
Long or Short a Risk Reversal 165
Conclusion 167
Part IV Design and Execution 169
Chapter 10 The Elements of Design 171
The Elements 171
Position Sizing and Stop Losses 174
Conclusion 179
Chapter 11 Trading Plan 181
What to Look For 181
Conclusion 198
Chapter 12 Execution and Beyond 199
Execution 199
Hedging, Profit Taking, and Adjustments 203
Conclusion 209
Conclusion 211
Additional Resources 213
About the Companion Website 215
About the Author 217
Index 219
