[09:46] <brandon> in this example, it ultimatly breaks lower into a downtrend [09:47] <brandon> however, this could have also been an accumulation phase and broke higher [09:47] <brandon> the only way to know what it is, is simply to see which way it breaks [09:47] <brandon> after the sideways trend we see the downtrend which is the opposite of the uptrend [09:47] <brandon> and is making lower lows nad highs [09:47] <brandon> hope you guys are following me so far [09:48] <brandon> in t/a there are very few tools a trader needs [09:48] <brandon> understanding trends and support and resistance [09:48] <brandon> and you can trade [09:48] <brandon> > From there you'll come across about as many different indicators and methods as there are traders. [09:49] <brandon> Since no two traders are alike, success comes from learning how to use these two characteristics present in every stock and index in a manner that suits your personal style the best. [09:49] <brandon> While plain and simple experience is a large factor in understanding the market, there are a number of things you should pick up on early to speed up this process. [09:50] <brandon> Personally, I prefer to keep technical analysis as simple as possible. [09:50] <brandon> There are very few indicators on my charts, as for the most part they simply serve to add confussion and hesitation. [09:51] <brandon> One of the best ways to learn to trade is not paying thousands of dollars for seminars and books, its simply to watch the market and observe. [09:51] <brandon> Keep records of your trades and observations [09:51] <brandon> include the charts so you can keep refering to them [09:51] <brandon> Write down the things you observe in the stock such as the type of action that attracted you to it and reasons for every action you make [09:52] <brandon> Then you can go back and analyze the results. [09:52] <brandon> Tear it apart if you will. [09:52] <brandon> I promise you that this is the way you will learn things best. [09:52] <brandon> All technical analysis is is a visual representation of human emotions. [09:53] <brandon> And anyone who knows psychology knows that mass groups of people can be charted, graphed and predicted. [09:53] <brandon> (T/A) [09:53] <brandon> on a side-note [09:53] <brandon> you can actually chart election pole numbers for prez, senete etc [09:53] <brandon> and get a reasonable idea very early on of who will win simply using trends and relative strength ideas [09:54] <brandon> this is just an interesting thing to show how well T/A plots human emotions [09:55] <brandon> What I want to do today is share some simple tools that I use to indentify nearly every trading opportunity I give you guys in here. [09:55] <brandon> Im also going to discuss Candlesticks and why most people use it ( I myself dont) [09:56] <brandon> What I want to do today though provide you with a platform on which to build, hopefully sparking a greater interest in the benefits of technical analysis and aid in your own studies of the market. [09:56] <brandon> going to recover some of what I already did here [09:56] <brandon> The first step when discussing trends is to learn what exactly a trend is. [09:57] <brandon> A trend is the primary direction of price movement in a given time frame. [09:57] <brandon> A stock tends to have a number of different trends developing at any given time, so it's important to determine rather early in the game what the time frame is you wish to focus on. [09:58] <brandon> For us (toni and i) the time periods range from 5 minute charts to montly charts (I aint the one who uses monthlies too often) [09:58] <brandon> What ones are most important will depend on whether you are daytrading or swingtrading or position trading. [09:59] <brandon> Even scalpers should pay attention to trends. [09:59] <brandon> For daytraders it is the intraday and daily trends that tend to be most important. [09:59] <brandon> For the next part here we will be using some images online. [10:01] <brandon> http://www.tradingfrommainstreet/img/trends.gif [10:01] <brandon> go back to this URL [10:01] <brandon> In the image above notice how the uptrend consists of a series of higher highs and/or higher lows. [10:02] <brandon> Typically in a trend, the last high made will serve as support on the next pullback. [10:02] <brandon> . This can be seen circled in the image and this is one type of support we will be discussing as we proceed. [10:03] <brandon> On the right side of the image we can see the DOWNTREND. [10:04] <brandon> In this note that each low is lower than the previous one and each successive high is also lower. [10:04] <brandon> To help you understand this a bit better [10:04] <brandon> here is an uptrend in an actual stock http://tradingfrommainstreet.com/img/trend1.gif [10:04] <brandon> Ill give you a few minutes to get this up [10:06] <brandon> As you can see circled in green, each high is higher than the previous one and each low is higher as well (circled in red.) [10:07] <brandon> > as many of the core setups we use are based in part on the stock's trend. [10:07] <brandon> Essentially, the downtrend is just the reverse. [10:07] <brandon> The trend that can be more troubling is the sideways trend. [10:08] <brandon> Basically what this is is a basing action or trading range in the stock or index where it trades virtually sideways for a given period of time. [10:08] <brandon> The other aspect of trends that I want to identify here are how to draw trend lines. [10:08] <brandon> This will come more into play as we start getting into support and resistance as trendlines support and resistance is one aspect of it. [10:09] <brandon> For this section the following image will be helpful: http://www.tradingfrommainstreet.com/img/trends2.gif [10:09] <brandon> Drawing a Trend Line for an Uptrend: [10:10] <brandon> In this case we are looking at a 15 minute chart. [10:10] <brandon> Thus the time frame we are talking about is for daytrading. [10:10] <brandon> Next, draw a line from the lowest low up to the highest minor low that precedes the highest high making sure the line does not pass through any price between those two points. [10:10] <brandon> This includes not crossing any tails made by the candlesticks as these tails are part of the price movement. [10:10] <brandon> NOT CROSSING TAILS [10:10] <brandon> Then simply extend that line upwards. [10:11] <brandon> Drawing a Trend Line for a Downtrend: [10:11] <brandon> Again, first consider the time frame that you wish to consider. [10:11] <brandon> Then draw a line from the highest high to the lowest minor high that precedes the lowest low making sure no prices are crossed in the process, including the tails of the candlestick bars. [10:11] <brandon> Now just extend this line past the lowest high and downwards. [10:12] <brandon> Generally, the more extended a stock gets from its trend line, the higher risk it becomes to take a setup in the trend. [10:12] <brandon> Sometimes a trend line will be made using the first two pullbacks and then the trend increases in strength so that the trend line itself does not reflect great upon the current action. [10:12] <brandon> In such cases I tend to move away from using trend lines and rely on other tools such as moving averages which we will discuss in greater detail here shortly. [10:12] <brandon> someone just asked me, How do you know if a stock is uptrending, downtrending or sideways [10:12] <brandon> so again [10:13] <brandon> With the uptrend... you must have the higher highs and higher lows [10:13] <brandon> In a downtrend you must have Lower Lows and Lower Highs [10:13] <brandon> In a sideways trend, the highs and lows are generally comparable. [10:13] <brandon> Sometimes what happens in a sideways trend is that the highs are more consistent than the lows of vice versa. [10:13] <brandon> This happens a lot when say a stock has rallied to 100 and stalls.. It will often test that level several times before breaking and the lows are thus not as large of a factor in the range as the highs are so the test of the highs is more consistent. [10:13] <brandon> As we get into support and resistance, you will find this is one type of it.
The proof is in the pudding. So how much money did you make with them? What time frame(i.e. 1 month, 2 months, ect..)? What was your trading account size? This let's me know how GOOD a chat room is.... BOLT
It is late so I apologize for the shortness of today's wrapup. The following posts contains charts with details on the charts:
I woke up with a pretty bad migraine this morning that completely blew my day. As a result I found it really difficult to concentrate this morning so while I was on the right side up things I still managed to fub things up as you can see with BAC this morning. I was looking for a bull flag in the market after alerting several downside market alerts on the morning avalanche and bear flag in the SP500 and came across BAC. It was pulling gradually into support at the 5 minute 20 sma. I knew right away as it was coming into my stop zone that the stop was too tight but it was too late to do anything about it and ended up with a small stop before calling it a day. This just goes to show you how important it is that you don't have huge distractions intraday while you are trading. Brandon faired a ton better, but don't you just hate whan you miss moves like yesterday, especially when you were looking for buying into the weekend??? Such is life though. I broke out the Amerge to kick the migraine and am looking at getting back into the swing of things again tomorrow. Since I didn't have any stops this month until yesterday (although I did have two breakevens), the market gods must have figured it was time I pay my dues =)