charting help (first post please dont bite)

[littlechops1]

Hi everyone,I'm Rob,I've been trying to turn my hand to trading for a while, Firstly buying and holding stock for a period before selling,then tried my hand at a little day trading but being full time in employment meant it was difficult.After being off line for a while i've came back to spread betting, whith a hand in buying some stock to hold also. whith the US markets being the main target,i'm trying to understand the charts and intraday movements to figure out entry points and exits,withall this to consider could anyone give a simplified vesion as to what to look for,as with all things it would only be opinion,and with lots of different opinions,something will be learnt
Rob (UK)

 

[Grey1]

Quote " whith the US markets being the main target,i'm trying to understand the charts and intraday movements to figure out entry points and exits "..

Before you trade , you have to understand that stock market is a near to random game.. This means it is difficult to gain an edge over the market.. Once gained the edge using various methodologies all you need to do to make money is learn techniques of money/risk management to create nice profit days. weeks and month to come.. Just like casinos.

Edge + correct money/risk management ----- > $$$$

Remember the maximum edge one can get in LONG TERM is not greater than 5% and jesus this is a lot.. and this is all you need . ( one might get 100% edge in short term , just like coin tossing , you might get 5 heads one after another but in long term the there is no edge between betting on head or tail .)

Once you understood the above principle, then you could look for chart patterns if you prefere pattern trading ..


Break out pattern is well known in the industry and is a good pattern to look for in a chart..

The rule is :--

Break out is nearly always in the direction of the previous trend times 2



so , if the previous trend before congestion was UP then you would go long on the bottom of congestion channel with setting a
tight stop just below the channel ..

I would say this is the most basic trading skill you need to learn and a good start :-0 :-0 :-0

 

[oatman]

A quick search found this http://www.chartpatterns.com/
It'll give you something to peruse for a while :cheesy:

 

[darktone]

hello littlechops

If your interested purely in the technicals side ie:charts and indicators etc then maybe you would do better to look at FX. Its far less random than the stock market (especially in the majors) imho. If you still wish to pursue stocks then might i suggest you look at sentiment analysis. Put/call ratios + open interest..sentiment polls are very useful at gauging possible future direction (market bottoms in particular).

sentiment:
www.schaeffersresearch.com
www.decisionpoint.com

charts and stuff:
http://www.incrediblecharts.com/index.htm
http://www.equis.com/Education/TAAZ/?page=6


5%?? id like to think we can do a little better than that.

GL

 

[qaza]

Grey,

I think you are confusing time with trading frequency ?

 

[littlechops1]

Thank you all for your advice and links, they will be followed up,
ROB