There's a lot of material out there. Books, information on websites, advice posters. There's a lot of different styles of trading some that work, some that kinda work, and others that don't work. So on my path for figuring out this market, I've read many books, Tony Oz books, Techniques of tape reading, technical analysis from A-Z, technial analysis from stockcharts.com, studying the various chart formation on dacharts.com, reading jack hershey's strategy, reading something from a poster who said to multiply the opening price by 1.0033 or .9967 @ 1:00 CST, and probably more things I just can't think of. That leaves me kinda tired. I feel as if there are several roads to take, and that I'm learning a little bit about each road rather than not taking choosing one road and digging deep. I found a liking for technial analysis & chart formations, however I read that it is a complete waste of time. Now I don't want to spend a lot of time studying and mastering that to find out it is a waste. Could someone who is successful direct me in the right direction? What should I be studying? What road should I take? All help you have no idea is GREAT APPRECIATED Thank you
That's a big part of the journey as a trader, everyone goes through what you're going through. It's the search for the holy grail. Ultimately, you're looking for a consistent method that fits YOUR personality. The only advice I can offer is to keep looking and taking bits and pieces from others to formulate your own system.
I like the study of the chart formations and TA and I think it fits my personality, but the problem is most people say that it isn't profitable. Should I scrap this approach and find another one?
Let the screen and your trading tell you what is and what is not true. You have to continue your reading and studying, trying the techniques out for yourself and seeing what works for you, and what doesn't. That's the way. Best Regards, JJ
Agree with JJ. I've been plodding along, learning everything and trying everything I learn to find what works and what doesnt for me. Funny thing is as I get more advanced in my knowledge of the markets, things I tried in the past that I didnt get any use out of have been added back in and are core staples of what I look at. It really comes down to you, and what type of market you enjoy trading. Once you find a market and timeframe which suit your style, then its a matter of finding the set of trading tools that work for you. Most chart types and indicators are basically different ways of viewing the same information so it really comes down to what makes the most sense to you. Try them all out and you'll start finding tools that you like. -T
if you can be humble and "self aware" of when you are "breaking all the rules" you have a chance not to "blow up" in your trading career while you learn how the "pros" do everything they can to take your money good luck
I think it's crazy to say technical analysis (TA) doesn't work. You don't have to look at too many charts to see that stocks trade in patterns, and that support and resistance are a reality. Given this truth, then it is simply a matter of putting the odds in your favor. It's kind of like a casino. The house doesn't know for sure it will win this specific hand, but it does know that over an evening, or a month, it will win the majority of hands. Trading with TA is the same. You develop a system of entry and exit points that utilizes things like support and resistance, then if the trade goes against you, you get out quickly. If it goes with you, you stay in. I know this is oversimplification, but it is almost that easy. The only people that have a difficult time using TA are fund managers, or traders that can "swing a big line" (in the words of Jesse Livermore ). That is because they tend to move the market when they enter, so picking a specific entry point (i.e. a bound off support) is almost impossible, since they will move the price when they enter. Because of this, they need to stay in a position longer, so they focus mostly on fundamentals. Of course, this is my $0.02 only.
Successful trading is a combination of many things, but here are some things that I feel are vital. 1. Patience : Pick your trades, if you only trade 5 times a month, that is good. You don't need a whole lot of TA to find a day that is trending well and go with it. I cannot imagine anyone making money if they trade every single day of the week. 2. Money Management: You can have an edge and a winning strategy, but if you don't manage your money well you can still end up losing. I AM NOT SAYING THIS LIGHTLY. MONEY MANAGEMENT IS MOST IMPORTANT COMPONENT OF TRADING. If you do not have a good reason for the amount of lots you are risking any why, find out please. Type "Kelly Values" into google. 3. Keep on top of the news. Read the paper, figure out what the general feeling of the market is in terms of inflation and geo-political concerns. This is way more important than TA. Also find out when the news releases are, and keep up with them. I like barron's economic calendar. Really, most TA is just a tool to help you see what the market is doing, but there is no set rule for when to enter. That is something you have to practice and develop. And I think there is no substitute for practice when it comes to that. Like you are saying, most reading is a bit scary, and everyone contradicts everyone else. Really though, it isn't that bad, just get started and see how it goes. Just be sure you can afford to lose the money you start with, of course. Though you will read that about 50 times before you ever even can get an account.