I agree. Only keep indicators that predict in advance where price is going to move. Also, never keep duplicate indicators that both show the exact same thing. I will give an example, my indicator says price is going down, I see price is going down. We then come to a place where if price continues to go down it would invalidate the previous bullish trend. Since the indicator has told me in advance that trend has possibly turned bearish, once price action confirms I would consider going short. I would not think about going long since the indicator told me advance that the probability of a long trade is low.
How would you analyze this chart?
- Thread starter nxt7
- Start date
The chart reminds me of my first few months of trading where I lost my money consistently.
I am using a plain OHLC chart now.
YOu have price indicators, you have volume (CMF) that is good.
1. You do not have volatility and you do not have Breadt data. You are missing two important factors. You need to know when volatility starts to rise and you need to see what stocks listed in the S&P 500 are doing (Breadth indicators).
2. S&P 500 represent the strongest stocks on the market and reflects the overal markte health. I would also recomend monitoring the Russell 2000, Nasdaq 100, DJI and NYSE Composite to understand what moves market at the current moment. If you take a look at the Russell 2000 (check volume) you will understand that corent recovery is mainly caused by small- and mid size stock. It is not GOOG, not AMZN, not AAPL, not NFLX (high index weighting stocks) who moved the indexes up know... It is going to be difficult for small stocks to move the indexes up high withought "market giants"...
On my opinion, based on volume, volatility and Breadth data the S&P 500 will be side-way most likely until the next FED's rate meeting.
See example of nalysis which was done in December (you may check wayback machine archive that it was actualy don in December) at
http://www.marketvolume.com/analysis/marketanalysis2015.asp
The lates report could be found at
http://www.marketvolume.com/forum/?t=140
I know I am new to this site but I have been watching/reading this site and trading using TA for about 4 years now. I am no expert but will tell you that I have found the best TA to be most helpful when taken in context with other time frames and when multiple time frames tell you the same thing it's most useful. Remember a chart is just a photo in time. Based on the clues you can usually tell what is LIKELY to happen. Just as a photo of a car on the road doesn't tell you if it's slowing or speeding up or hitting the up coming wall.
Having said that, my analysis of THIS chart suggests that there is a DAILY uptrend and that a trend is a trend UNTIL ITS NOT. However, a trend will first change course on the smaller time frames and then on the longer time frames. Now when comparing similar indicators on a WEEKLY chart you see a DOWN TREND forming/formed. But the same indicators and chart settings on a MONTHLY chart suggest a bounce off of major support of a well formed UPTREND. On the HOURLY chart there is an UPTREND that is weakening and pulling back to a support level that may indicate the daily uptrend is reversing OR is getting ready to bounce and continue. So my analysis of these multiple time frames says monthly UP, weekly DOWN, Daily UP, Hourly UP. Which do you follow? The answer is what time frame do you want to trade? I like seeing 3 timeframes separated by a factor of about 5 or more matching up (week/ daily/hourly OR monthly/weekly/daily OR daily/hourly/10 min). I trade the shortest time frame of the set. So, looking at daily and trading that (it appears from your post) you should look at weekly and monthly and make your decisions from there. I hope this helps.
Just my 0.02
Bro, I am new to trading too.
Had been using TA for the past 5 years tracking/predicting stock movement as a hobby. "No money involved yet"
But only recently, would like to jump into the pool and try swimming and hopefully won't get myself drown.
Your indication on the result is pretty much like mine and i would like to ask whether for your past 4 years of trading using TA, is it overall positive?
Actually I have been LEARNING TA for the last 7.5 years and trading using them for just over 4 years or so. Losing money or break even the first 2.5 to 3 years and now beating the market pretty solidly over the last 1-1.5 years and I have a full time job.
Hohoho~ Hopefully i can follow your footstep. Cheers!!!
Nobody has, even though many think they have!
Trading decisions are best made based not on price alone, but also using _ _ _ _
Price is used to determine key S&R levels, no matter what time frame you trade, as it is at these key levels that price is more likely to change it's current momentum, which does not necessarily mean a change in overall current direction!
The best thing you can do for yourself, is start again, and, remember, if you do what everyone else does, then, you will get what everyone else gets!
It is all relative!
E=mc2
c2=E/m...or should it be...1/c2=m/E
m=E/c2...or should it be...1/m=c2/E
J_S
Bro, what with that numbers and A5, B1???
Are you some crazy quant scientist using formula to break the code?
That is freaking cool~~~