Technical Analysis (TA)Trading

[res321]

Hi All-

So I am hoping to make a shift from buy and hold and allocate some capital to actively trade. I have very minimum knowledge of T.A. How does one go by learning more about various methodologies and techniques? Books, courses, seminars, certifications? What is good value for money, if one needs to spend it. And are there any special software systems besides your brokers charting systems that are essential?

Any other suggestions to be a better options trader in particular? I assume TA is applicable to all derivatives but am really focuses on options so any help is much appreciated.

 

[viktor_k67]

1. I would sty away from courses, seminars unless it is from a broker. See below example of optionXpress workshops:
http://www.optionsxpress.com/free_education/ustream.aspx
The rest of seminars will try to brainwash and sell you their service. DO NOT JUMP INTO ANY SERVICE THAT PROMISE QUICK AND BIG PROFIT.

2. Keep in mind that most people you met in T.A. will consider themselves as gurus and will consider their own analysis as the only correct one. Do not get emotional. If somebody makes money on some strategy, does not necessary mean you will do.

3. Set aside some funds you are not afraid to loose and try it simply to see whether you are able to handle emotion and whether this is what you want to do. Most likely you will lose this money, but if you make a decision to continue you will be stronger and smarter. If you make a decision do not jump into active trading you will save the rest of your money.

4. In education, start from simple. Try to get free but professional charts. As an example you may get 1 free months of charts at http://www.marketvolume.com/ In a month get another free month under different email and so on.

7. define what you want to trade: stocks, etfs, options, futures, currencies and go from there. You have to define whether you will be trading only one security (like may trade SPY stock) or you will be trading a portfolio of stocks.

8. If you going to trade a portfolio of stocks, first, you have to learn how to select the stocks.

9 After you know what you going to trade you have to find out what time-frame you want to trade - how many trades per day/week or month you are planing to execute.

10. The last three steps will narrow your educational process and will help you to find a start point in your education.

8. Remember that trend is described by change in price volume traded during this change and volatility of movement during this change. It is recommended t focus on price, volume and volatility analysis or you may miss something which could lead to loss of money.

P.S. Forums are always good place to ask and learn.

 

[dbphoenix]

Hi All-

So I am hoping to make a shift from buy and hold and allocate some capital to actively trade. I have very minimum knowledge of T.A. How does one go by learning more about various methodologies and techniques? Books, courses, seminars, certifications? What is good value for money, if one needs to spend it. And are there any special software systems besides your brokers charting systems that are essential?

Any other suggestions to be a better options trader in particular? I assume TA is applicable to all derivatives but am really focuses on options so any help is much appreciated.

To start, there are three types of technical analysis. TA began with the study of price movement. It then begat the study of patterns. This begat, a few decades ago, the use of "indicators". These three areas are not necessarily discrete; many traders combine them in a variety of ways.

As for references, Richard Schabacker "wrote the book" on patterns, Technical Analysis and Stock Market Profits, and it's available free as a pdf. Richard Wyckoff "wrote the book" on price behavior. His course, The Richard D. Wyckoff Method of Trading and Investing in Stocks, is also available for free as a pdf or for the cost of copying from The Library of Congress. As for indicators, you don't have to go looking for information, just stand still and you'll be overwhelmed with it. But you will likely be better off studying the original work rather than a vendor's rehash of it, particularly with regard to Appel's "MACD", but these you can usually find at your local library.

Total Cost: $0.00.

As for trading with money you can afford to "lose", if you do so without any sort of preparation or study or research or trading plan, then you will lose that money. Figure out what you're doing before doing it. Otherwise you'll just rack up a lot of bad habits that will take far longer to correct than if you had avoided acquiring them in the first place.

Total Cost: Time.