dbphoenix
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Given the newfound popularity of "trading price", and as slogging through my old threads is a punishment I wouldn't inflict on my worst enemy (well, yes, maybe him
), I offer the following as a result of my never-ending efforts to make all this as simple as possible.
Charts are among the most mysterious aspects of the financial markets that the beginning trader will face. For many people, charts look like a child's experimentations with a Spirograph. But charts are really nothing more than stories, using symbols rather than words, like algebra uses symbols instead of numerals (yes, I know that words and numerals are technically symbols, but you know what I mean). They are a bit like the storyboards used in producing movies and cartoons, except we use dots and lines rather than drawings or photographs. Understanding the stories these charts are trying to tell can make you money. Or, at the very least, save you what could become a great deal of money.
Many technicians and technical analysts sabotage their own case by making the subject of charts and charting so elaborately complex as to be ludicrous. More than a few beginners have visions of wizened old crones with palsied hands, stroking – in a vaguely obscene way – ancient leather pouches filled with dessicated chicken bones which they scatter onto pitted and scarred tables while muttering invocations to Chaikin, Bostian, Donchian.
These technicians then explain the results of their analyses much as Lewis Carroll might, by pointing out how brillig the pattern is, and how the slithy toves are gimbleing in the wabe, while over here (they point), the borogroves are mimsy, which indicates a possible outgrabe by the mome raths, unless of course the Bandersnatch whiffles, in which case . . .
It's just not that hard.
A chart is a visual representation of transactions. The results of these transactions are depicted by either a line which will look like a map of the Pacific Coast Highway, or by a bar which represents the opening price (the little notch on the left side of the bar), the low for the day (the bottom of the bar), the high for the day (the top of the bar) and the closing price (the little notch on the right of the bar). At the bottom of the graph you'll usually also find volume bars which will tell you how many transactions were completed that day.
But beyond all this, a chart is a visual representation of buying and selling behavior on the part of investors, not just a tally, and this behavior creates patterns, like ranges, or "boxes". Thus if you approach this from the viewpoint of psychology and sociology rather than cut-and-dried mathematical models, you'll have a leg up. These patterns do not exist in nature. They are created by the buying and selling dynamic.
(for the rest, see the pdf attached below)
), I offer the following as a result of my never-ending efforts to make all this as simple as possible.Straight Line Approach, The
Keep Your Hands And Feet Inside The Stochastic
Until Your Oscillator Comes To A Complete Stop
Until Your Oscillator Comes To A Complete Stop
Charts are among the most mysterious aspects of the financial markets that the beginning trader will face. For many people, charts look like a child's experimentations with a Spirograph. But charts are really nothing more than stories, using symbols rather than words, like algebra uses symbols instead of numerals (yes, I know that words and numerals are technically symbols, but you know what I mean). They are a bit like the storyboards used in producing movies and cartoons, except we use dots and lines rather than drawings or photographs. Understanding the stories these charts are trying to tell can make you money. Or, at the very least, save you what could become a great deal of money.
Many technicians and technical analysts sabotage their own case by making the subject of charts and charting so elaborately complex as to be ludicrous. More than a few beginners have visions of wizened old crones with palsied hands, stroking – in a vaguely obscene way – ancient leather pouches filled with dessicated chicken bones which they scatter onto pitted and scarred tables while muttering invocations to Chaikin, Bostian, Donchian.
These technicians then explain the results of their analyses much as Lewis Carroll might, by pointing out how brillig the pattern is, and how the slithy toves are gimbleing in the wabe, while over here (they point), the borogroves are mimsy, which indicates a possible outgrabe by the mome raths, unless of course the Bandersnatch whiffles, in which case . . .
It's just not that hard.
A chart is a visual representation of transactions. The results of these transactions are depicted by either a line which will look like a map of the Pacific Coast Highway, or by a bar which represents the opening price (the little notch on the left side of the bar), the low for the day (the bottom of the bar), the high for the day (the top of the bar) and the closing price (the little notch on the right of the bar). At the bottom of the graph you'll usually also find volume bars which will tell you how many transactions were completed that day.
But beyond all this, a chart is a visual representation of buying and selling behavior on the part of investors, not just a tally, and this behavior creates patterns, like ranges, or "boxes". Thus if you approach this from the viewpoint of psychology and sociology rather than cut-and-dried mathematical models, you'll have a leg up. These patterns do not exist in nature. They are created by the buying and selling dynamic.
(for the rest, see the pdf attached below)
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