When It Comes to Stock Trading Timing is Everything
There are many experts and books telling you how to pick stocks. You can turn on the TV and you are going to get a stock recommendation if you watch financial news. But most people never tell you when to buy or sell.
That is where technical analysis can come in. Technical analysis cannot tell you if a stock is cheap or expensive based on fundamentals, but it can tell you when you should buy and sell, which is just as important. Technical analysis is all about using price action to time your entry and exit points.
There are three key things you need to know when it comes to charts and technical analysis. First you must understand that the price of a stock is already factoring in the future. A stock is high because people think the future is good and low when they think it is bad. So if you want to make money based on that you are trying to outsmart the entire world.
The second principle is that asset prices move in trends. Predictable trends are essential to the success of technical analysis, because they enable traders to profit by buying assets when the price is rising, or as the popular saying goes, "the trend is your friend." Borrowing from Newton's Law of motion, technical analysis asserts that trends in motion tend to remain in motion unless acted upon by another force.
The reason why technical analysis works is because investors will never change. Throughout history they have been driven by fear and greed and always will be. There always will be people who buy at tops and sell at bottoms and you just need to know the patterns that show you when important turning points are at hand.
The important thing is to be able to tell when a price movement represents an important pattern or is just noise you need to ignore. To do that you just need to do some studying and learn the patterns. Most people don't do that and just chase fluctuations and lose money.
This requires a degree of skill, judgment, and interpretation. Mechanical trading systems attempt to do away with subjectivity by basing investment decisions on mathematical indicators calculated with the variables of price and volume.
It is all about learning and planning. You do those two things and you can make money in the stock market. Most investors don't and that is why most investors don't make a whole lot of money in the stock market or are just at average. You can do better if you just take action for yourself. - 23226
That is where technical analysis can come in. Technical analysis cannot tell you if a stock is cheap or expensive based on fundamentals, but it can tell you when you should buy and sell, which is just as important. Technical analysis is all about using price action to time your entry and exit points.
There are three key things you need to know when it comes to charts and technical analysis. First you must understand that the price of a stock is already factoring in the future. A stock is high because people think the future is good and low when they think it is bad. So if you want to make money based on that you are trying to outsmart the entire world.
The second principle is that asset prices move in trends. Predictable trends are essential to the success of technical analysis, because they enable traders to profit by buying assets when the price is rising, or as the popular saying goes, "the trend is your friend." Borrowing from Newton's Law of motion, technical analysis asserts that trends in motion tend to remain in motion unless acted upon by another force.
The reason why technical analysis works is because investors will never change. Throughout history they have been driven by fear and greed and always will be. There always will be people who buy at tops and sell at bottoms and you just need to know the patterns that show you when important turning points are at hand.
The important thing is to be able to tell when a price movement represents an important pattern or is just noise you need to ignore. To do that you just need to do some studying and learn the patterns. Most people don't do that and just chase fluctuations and lose money.
This requires a degree of skill, judgment, and interpretation. Mechanical trading systems attempt to do away with subjectivity by basing investment decisions on mathematical indicators calculated with the variables of price and volume.
It is all about learning and planning. You do those two things and you can make money in the stock market. Most investors don't and that is why most investors don't make a whole lot of money in the stock market or are just at average. You can do better if you just take action for yourself. - 23226
posted by X - Men @ 3:52 AM
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