Technical Analysis for Stock Option Trading

We are an investment group focused on options trading. Our trading strategies are based on the teachings of A.J. Brown, a renowned options trading expert.  We rely heavily on charting analysis to guide our trades.  Our goal is to build a steady stream of income from options trading, but not necessarily go after the get rich quick avenues.  We prefer to concentrate on those securities where the "smart money" tend to have higher investment interests. We also prefer those securities with a good history of trend. Although, we also dabble in the explosive breakout stocks that tend to develop around the quarterly earnings seasons. We typically target only those stocks residing in the Nasdaq, Dow, or SP500 whose fundamentals are strong.  We further narrow the list of securities to only those with market price of $50 or higher. We typically trade on a short-term basis and do not utilize Leaps. Our trading techniques consist of selecting stock candidates after the market closes each day and then evaluating those candidates by applying charting analysis to help uncover price trends. The data gathered from the charting analysis are used to generate a final list of stock candidates, with specific information in entering a trade and also specific criteria for exiting the trade. We utilize a small set of indicators, in addition to the price and volume charts, to help determine the trending bias of a particular stock. The stock indicators that we employ are the Williams %R, the MACD, the Chaiken Oscillator, the Relative Strength Index (RSI), On Balance Volume (OBV), Accumulation/Distribution, the Commodity Channel Index (CCI), the Stochastics and finally, the Fibonacci Retracement Lines to help guide our trade decisions. Although these indicators were created from logical mathematical formulas, an experienced trader will recognize that the price movement of a security is not always predictable and no single indicator or sets of indicators will be 100% accurate. Thus far, we are not aware of any mathematical formula that can truly predict the price behavior of a stock; simply because no formula exists that can accurately account for the HUMAN factor. Many traders tend to trade the same securities day-in and day-out. As a result, each stock over time, tends to develop a unique personality that reflects the trading mentality of the investors who follow that particular stock. As the traders' behaviors change over time, the stock's personality will also evolve. At first glance, it may seem contradictory that our members continue to utilize the charting analysis and the stock chart technicals to study the price behavior of a stock. But we have come to realize that all of the traders have access to the same indicators and are using the same charting analysis tools.  It would seem logical for our members to utilize the same set of tools, in order to gain insight into the trading behaviors of the masses. By learning to find clues in charting analysis, we learn to anticipate the movements of the masses... and to-go-with-the-flow.

By recognizing that certain combinations of indicators work well together in helping to predict price movement, AJ Brown developed a set of templates that can be used to identify the personality of a particular stock. These combinations of  leading and lagging indicators, can be categorized as exhibiting either a REACTIVE personality, a BUFFERED personality, a CHAIKEN personality, a BREAKOUT personality, or an OSCILLATORY personality.  By setting up these templates to help filter stocks to their appropriate personalities, we have been very successful in identifying stock trends and in determining entry points (i.e. buy call and put options) and exit points (i.e. sell call and put options). AJ Brown's trading system has been successfully utilized by many of the investing members of the optionsoutlet.com website, in addition to the 900+ options trading students that are currently under AJ's tutelage.  Anyone interested in learning how to chart stocks or to gain a better understanding of stock chart technicals, we recommend that you visit AJ's stock tradingtrainer.com website. Investors interested in obtaining additional trading mentoring services, we recommend evaluating the Rockwell Trading Coaching Program. It provides personalized coaching that helps to shape your trading habits to become a more disciplined trader. The site currently offers a free one hour one-on-one coaching session to interested investors. We came across this review site (Rockwell Trading Review) when we were looking for additional coaching.  It provided some insights into the coaching program and also gave us a feel for what others are saying about the Rockwell coaching program.

The following links provide a log of our investment activities, in addition to the  stock option candidates that we are currently monitoring: 

DISCLAIMER: This website is intended as a vehicle for our members to share stock and options investment ideas. This options trading website is not meant to be an investment advisory site, nor does it claim to have expertise in stock analysis nor technical analysis.  This site does not produce nor provide any type of investing newsletter or stock trading advisory services to the public.  Everything on this website is offered to our viewers for free and updated on a daily basis with new stock picklists. Although a list of trades are provided for all users who are interested in options, we do not recommend any stocks or options to anyone viewing these pages. If you are currently not a member of our club, you are still more than welcomed to browse the website and download any of our materials at your leisure, for free. However, if you decide to trade a stock or option based on what you find within these pages, then you must also do your diligence in researching each security thoroughly. Optionsoutlet.com is not responsible for your actions and will not be held accountable for your losses or gains. If you are looking for validation on our stock picks, or looking for stock trading education or similar investment mentoring programs, we recommend you research the following sites:

The Options Industry Council - provides free information on options trading and also offers online options education to the public.

The Options Clearing Corporation - as a guarantor of options trading transactions, the OCC ensures that the obligations of the options contracts are free of errors and the transactions are fulfilled in the most expeditious manner. The OCC provides documentation and publications on options trading for the general public.

The US Securities and Exchange Commission - The mission of the SEC is to protect the investors, maintain fair, orderly and efficient markets and facilitate capital information.  The reader may obtain legal documents and trading practices and guides from this site.

Learn to trade options with tradingtrainer.com - This site offers training on options trading with a daily online trading seminar, providing daily broad market analysis, daily stock chart technical analysis, daily recommended stock candidates and weekly webinars where students are able to interact with the teacher in a live conference call. To read reviews on AJ Brown's tradingtrainer.com options education program, visit the options trading advisory website.

Stock Trading Service - This site provides the trading tools to enable the investor to scan for stocks that have high probability of winning and also provides entry and exit signals for each stock. We found a couple of good reviews of this trading tool at the following websites:  Market Club Trading Tool Review and MarketClub Options Advisory Service. Promotional offers and testimonials can also be found at these sites: Market Club Trading software and INO TV Education.

Trading Education - The Options University website is a great source of education on options trading. The site offers ongoing trading webinars, in addition to numerous trading courses both online and face-to-face classroom. Some free trading materials from Options University are identified at this page: Options University free trading materials. Recommended reading - The Trend Strategist Handbook by Price Headley is a good ebook for the novice trader as well as long-time traders.  The book goes into details on technical stock chart analysis.  For more information on the contents of the ebook, visit the Price Headley Handbook review website.

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