Day Trading & Forex Forum

Finally, the last piece of information is the CHLD displayed behind the chart. In the UK this is called an EPIC symbol, and in the US is called a ticker. It is a unique code allocated to the company by the exchange on which its stock is listed. Usually the code is an abbreviation of the company's name e.g.: VOD = Vodafone, MCD= McDonalds, and as in our chart above CHLD = Chloride. These codes are not hard to find, and all charting packages will include them, as will the online broker that you use. They will also appear on statements and contract notes etc. You will pick then up very quickly and even remember which is which (just like me !) - how sad I must have become. They are also important when you start in derivatives ( options etc ). One other piece of information I have just noticed is the ORD - this just means that the shares are 'Ordinary' shares ( not preferential etc ).  Right, back to the original question, and the answers are as follows :

Would you buy this share at the moment - yes or no? The answer is probably not!
Why? - because the share price is in a downtrend at the moment
This simple conclusion is your first piece of technical analysis. It has been based on a simple price vs. time chart. It has not involved hours or days studying management accounts, directors reports, financial statements. It does not require you to be a graduate of a business school ( though you may be one anyway ), or to understand PE ratios or any other ratio for that matter. You probably have little or no idea what the company does, who the management are, how many divisions there are, or where it is based. You have arrived at this simple conclusion based on what you see graphically represented before your very eyes.

Now, there is great deal more to it than that, but this is the basis of all technical analysis. The study of a chart to forecast future price movements. And finally the most wonderful part of all, is that this can be applied to ANY financial instrument in any market anywhere in the world. So it is possible to trade any instrument anywhere in the world, because all financial instruments will have a chart. Once you have learnt the basics of understanding and interpreting charts ( practice, practice and more practice ) you just need to understand the nuances of the particular market you wish to trade. Right - time for one more test!! - just to make sure you understand - would you buy or sell the following share in the chart shown below.

As you can see, the share price is showing an upwards trend, so on this occasion we would buy. One of the odd things that many traders suffer from is the fear of buying something that is trending up. The 'logic' if you can call it that, is simply that you subconscious is telling you that the prices are bound to fall soon. Perhaps this has something to do with our understanding of gravity, and that it is easier for things to fall than rise. This also becomes an issue when prices break into new high ground ( a price for the instrument that has never been achieved before ) Again the fear is that ' it can't go any higher'. I guarantee that you will suffer this yourself. It is the reason that people buy things like penny shares or try to buy when prices are falling fast ( known as trying to catch a falling knife!!) Please, don't ever be frightened about buying when prices are rising strongly - you have a much better chance of making money, than trying to predict the bottom when prices are falling - believe me!!

In a odd way, this really should be the first page of the site, as in order to start trading you need to decide whether you are going to be a fundamental or technical trader, which will then dictate your online trading and trading style. Only you can make this decision - no-one else. Hopefully this site will help a little!