Technical Indicators for Newbies

The technical indicators you are looking at in your charting package are primarily based upon price.

Past price is not a predictor of future price. If you like driving your car by looking in the rear view mirror then price will work fine for you. But if you like staying on the road then you will consider indictors that are predictive of future price...causitve factors in all auction markets that tell you where price will go.

"Most" people in the markets do just what you are starting to do by using a charting package and the technical indicators. "Most" people lose, so don't do what "most" people do.

"Fear and greed drive markets. That's why to succeed as a trader, you must learn to respect the two principal driving forces
of price. To win consistently, you must put the odds in your favor by understanding when sentiment reaches an extreme at
either end of the scale and take advantage of the markets at that time."
--Boris Schlossberg, author of Millionaire Traders: How Everyday People Beat Wall Street at its Own Game
 
Quote from Richjohns12:

Hello everyone, first post on the site :)

I was wondering, since there are so many indicators to look at, I’m using a demo account to learn but I find myself overwhelmed with too many options, can you give us newbies an opinion on which indicators are easier to learn or use at the beginning?
More...


FWIW Sir

Pull up a couple / three price charts (of the same stock but in different time frames

Put one or two MA's/ EMA's on them

Then trade what you see

Learn to see price consolidate (and why is does)

Learn to anticipate where price is going next

AND - Always remeber ANYTHING can happen - so protect your capital

Wash
Rinse
Repeat

Trading Redneck Style - No indicators / or shoes :) required

Good Luck
 
Sorry - previous mail was a mistake of mine......


Learn to anticipate where price is going next

REDNECK PLEASE TEACH ME HOW YOU DO THAT - (no joke):


AND - Always remeber ANYTHING can happen - so protect your capital

VERY TRUE INDEED

Timeframes (and volume just once) have not been mentioned yet.

GG
 
Quote from Goalgetter:

Sorry - previous mail was a mistake of mine......


Learn to anticipate where price is going next

REDNECK PLEASE TEACH ME HOW YOU DO THAT - (no joke):


AND - Always remeber ANYTHING can happen - so protect your capital

VERY TRUE INDEED

Timeframes (and volume just once) have not been mentioned yet.

GG
More...


I admit the sentence "Learn to anticipate where price is going next" - is egotistical

what I should have said is "Learn to anticipate where price is likely to go next"


And Sir

I am just a dumbass trader, not really a teacher


But what I would offer is;

Every stock has a personality - pick one and learn it backwards and forwards

Learn the price levels it likes, and the ones it runs away from

Learn to distinguish heavy days from a light days

Learn to identify when it is acting strange

You'll get to a point where you to can anticipate where price is likely to go next

But I, along with the other great traders here (you'll be able to identify them after awhile) will help answer any questions you may have

Take Care


eta - remember to just keep it simple, - it's just trading, nothing magical, or hard to it
 
Quote from Redneck trader:

Every stock has a personality - pick one and learn it backwards and forwards

Learn the price levels it likes, and the ones it runs away from

Learn to distinguish heavy days from a light days

Learn to identify when it is acting strange

You'll get to a point where you to can anticipate where price is likely to go next
More...

This is a very strong strategy that I use as well. I will get to know a stock's major and minor support and resistance levels, how it behaves, earnings date (and ex-dividend date, if applicable), analyst upgrades/downgrades and other news. Then when the stock approaches support/resistance areas I like to trade, I go for it. I usually have 6 stocks on my hot list and they will stay on my hot list and get traded until they fizzle (which to me is when they start to diddle in the middle).

I believe you should keep it simple. 8- and 20-period moving averages in any time frame are great. Also know the 50- and 200 day moving averages, because they will act like a magnet or trampoline.

I also like to reference stochastics to help me time entries and exits when other indicators don't take precedence.
 
Quote from PatternMaster:

The technical indicators you are looking at in your charting package are primarily based upon price.

Past price is not a predictor of future price. If you like driving your car by looking in the rear view mirror then price will work fine for you. But if you like staying on the road then you will consider indictors that are predictive of future price...causitve factors in all auction markets that tell you where price will go.

"Most" people in the markets do just what you are starting to do by using a charting package and the technical indicators. "Most" people lose, so don't do what "most" people do.

"Fear and greed drive markets. That's why to succeed as a trader, you must learn to respect the two principal driving forces
of price. To win consistently, you must put the odds in your favor by understanding when sentiment reaches an extreme at
either end of the scale and take advantage of the markets at that time."
--Boris Schlossberg, author of Millionaire Traders: How Everyday People Beat Wall Street at its Own Game
More...
===================

I am sure one can find some useful info in Mr Schlossbergs notes.

And since he used the autoMobile illustration, yes windshields & rear view mirrors are useful, planned road map lines & mapped measures are also. 55 mph signs are good if you like avoiding tickets.

Railroads crossings are good to know, no way could one fight those & win;
also its hard to stop a train, hard to stop a towboat , hard to stop a truck, hard to stop a trend .

Not really a prediction;
but useful if you drive wise or invest/trade.


:D
 
Quote from PatternMaster:

The technical indicators you are looking at in your charting package are primarily based upon price.

Past price is not a predictor of future price. If you like driving your car by looking in the rear view mirror then price will work fine for you. But if you like staying on the road then you will consider indictors that are predictive of future price...causitve factors in all auction markets that tell you where price will go.

"Most" people in the markets do just what you are starting to do by using a charting package and the technical indicators. "Most" people lose, so don't do what "most" people do.

"Fear and greed drive markets. That's why to succeed as a trader, you must learn to respect the two principal driving forces
of price. To win consistently, you must put the odds in your favor by understanding when sentiment reaches an extreme at
either end of the scale and take advantage of the markets at that time."
--Boris Schlossberg, author of Millionaire Traders: How Everyday People Beat Wall Street at its Own Game
More...

We have a winner!! Pattern Master said it well.... :D

http://www.elitetrader.com/vb/showthread.php?s=&postid=2294742#post2294742

Why do people use price charts and the technical indicators that come with charting packages? Because its easy. Why would they supply all those indicators if they didn't work? They help resolve the movements of price. Price is the result of what is know and has nothing to do with future price...period. Once you understand what really causes price movement then you will be on you way to mastering the market. Easy is for idiots; the hard work takes real thinking.
 
You must log in or register to reply here.
Back
Top