| How do you scrutinize the stock you're considering | | | | "holy grail" syndrome. Many people have forgotten |
| buying as an investment vehicle? More and more | | | | that the most important considerations of the stock |
| traders are finding out that an excellent way to | | | | chart are price and volume. While indicators may be |
| perform their analysis is technically rather than | | | | helpful to some, others have tried to use them as a |
| fundamentally. As a devout technical analyst, I believe | | | | timing system almost to the exclusion of the price |
| there are more and quicker profits as a reward to | | | | chart itself. Indicators are mathematical algorithms of |
| the trader using the technical approach to study | | | | price movement, volume or a combination of both. |
| stocks. Even the most fundamentally sound stock | | | | They where meant to be used as a tool to help the |
| may not be in favor and may not gain in share price | | | | trader validate what they see on the chart, NOT to |
| for quite awhile. But when a tradable stock is found | | | | enter a trade. The most probable trades come from |
| using technical analysis, the move will happen soon or | | | | the price chart itself. The price chart tells a |
| most likely won't happen at all. No more buying stock | | | | psychological story and trades should be based on |
| and waiting for a gain that may not happen. No more | | | | the confirmed break of a pattern such as a head and |
| shotgun approach and diversifying to overcome the | | | | shoulders or bearish wedge. |
| losses you hold in your portfolio. The technician lets | | | | The satisfaction of mastering the craft of technical |
| go of losers quickly while letting their winners run. It's | | | | analysis can't be overstated. It's very satisfying to |
| an active approach to trading stocks, options, forex | | | | find a stock that screams "buy me" and then |
| and commodities. Besides, technical analysis is much | | | | watching as the price breaks out of a trading range |
| more enjoyable than pouring over a company's profit | | | | and clocks ten to fifteen percent over the next few |
| and loss statement! | | | | weeks. Learning to read charts takes time but not an |
| Proper technical analysis is the study of an equities | | | | eternity. The key is to spend some time each night |
| chart and forecasting probable price moves based on | | | | studying stock charts and over time you will begin to |
| patterns exhibited on the chart. To be a successful | | | | recognize the technical patterns that tell you if a |
| technician of the markets it's best to keep things | | | | stock has bottomed, topped out or will continue its |
| simple. One of the pitfalls a budding technical analyst | | | | trend. Keep it simple, learn to think for yourself and |
| has to overcome is the massive amount of | | | | soon you will be on your way to successful trading |
| information on the subject and not falling prey to the | | | | with technical analysis. |