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Chapter 7. Bull Call Spreads and Bull Put Spreads

Chapter 7. Bull Call Spreads and Bull Put Spreads

Most people think you can only trade the markets when they are going up. This is not so. You shouldn’t really care in a predictive sense. Because whichever direction it’s heading, I’ll attempt to follow the trend and then analyze potential turning points and profit objectives. That’s where advanced Fibonacci analysis comes in. Bearish strategies can be just as profitable as bullish strategies. But for now, we’ll just concentrate on being bullish.

The question, “Where is the market heading?” cannot be asked or answered with any real sense of purpose without including the context of time frame. A five-minute chart may indicate strong upward movement, while the daily charts suggest either a downtrend or consolidation. As you become more experienced, you’ll decide for yourself what time frame you’re best suited to trade, but whatever the case, you should get into the habit of looking at multiple time frames. For example, if you’re looking to trade the five-minute chart, do at least be aware of what the hourly and daily charts are doing. This will ensure that you’re aware of a potentially more powerful trend or direction. If you’re looking to trade intraday, then I would suggest you require Direct Access facilities to ensure you get fast fills.


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