"Finding" shares to trade with TA

As a newbie to all of this, I am looking into and trying to learn aspects of Technical Analysis.

My question to all of you experienced traders is this...

How do you identify and determine based on TA, which shares to trade?

I have seen lots of software plotting graphs, but how do you "find" these shares?
Do you have alerts which scan the whole market?
How do you avoid "missing the boat" as such?


I work in the City of London in IT for a large U.S Underwriters and enjoy all aspects of the shares, trying to predict which way they are to go!

Cheers,

Bung

Hi,

Before I try to answer your question, one thing: don't assume we are all experienced traders - I have a mere two years experience and have only just started to make consistent profits (small ones at that).

However I do use TA completely. My suggestion to you would be to look at and read what TA is - many sites and books can help you - use this site - knowledge lab and Traderpedia. What happens is that you will decide upon something that makes sense for you but it takes time and study.

I fastened upon Point and Figure as the charts I like. I use a software package (Updata) which is good for this kind of charting system and I run scans on the FTSE 100 which will give me a number of stocks that show promise - for the last year I have doubled my money using this alone, BUT it means I moved from £1K to 2K - we are not talking and nor should you be thinking that it's easy money - I lost 2k and have spent time and money just to get this far.

Do look at TA systems then once you understand these a bit read Mark Douglas's Trading in the Zone for the psychological aspect that is key to success. Also remember Money management is a vital part of any trading system. On this point and for a good book on all these various aspects read Elder's Come Into My Trading Room.

Can I also recommend you looking at Ensign Windows software - their site has a free newsletter and many more that really go into TA in detail.

The main problem is not to be bambozzled by so many systems - you need to find the ones that work for you - that you understand the logic of why they might work.

Hope this helps and Happy New Year.

Ian

Bung77 said:

As a newbie to all of this, I am looking into and trying to learn aspects of Technical Analysis.

My question to all of you experienced traders is this...

How do you identify and determine based on TA, which shares to trade?

I have seen lots of software plotting graphs, but how do you "find" these shares?
Do you have alerts which scan the whole market?
How do you avoid "missing the boat" as such?


I work in the City of London in IT for a large U.S Underwriters and enjoy all aspects of the shares, trying to predict which way they are to go!

Cheers,

Bung

Click to expand...

Hi Bung77 -

Two additional points might be useful for you.

1.
I find it profitable to focus on large to mid-caps. That is, the FTSE350; plus there are some London listings of equvalent cap to the FTSE350 but they're not actually members of the index. Larger caps have narrower spreads whether you're buying shares or spreadbetting so your overheads are lower. Their TA also seems more transparent and dependable to my eyes than smallcaps'.

2.
I prefer to take a top-down view, by looking at TA for the main indexes, then the FTSE350 sector indexes plus the "consensus" of charts of the members within each sector, and only then getting to the individual shares. This very quickly highlights the most active places to put money with least risk. I always hope for a share trend that follows the sector trend that follows the market trend. I never trade full-sized positions against higher trends, though I might take out a small long position on a rising share in a rising sector even if the main market is flat. If the main market is falling, long positions would be even more conservative, with close stops.

Finally, never worry about missing the boat, there's always another opportunity. Don't take a leap across the gap to reach the boat that's pulling out, go along the bank until you find the bridge. Think about what you could lose before you think about what you could make.