Article The Hidden Secrets of Technical Analysis

[T2W Bot]

Did you know that there is a whole ‘other world’ of technical analysis that most novice traders are either totally ignorant of, or fear to go due to the fact that it might actually require some work?
Well, there is! And I’d suggest that if most novices fear to go there, then perhaps it might be worth some investigation.
What is technical analysis? For most novice traders it seems to be one of, or a combination of, the two following approaches:

The art of defining recent price action through classical charting techniques such as the Dow Theory definitions of an uptrend and downtrend, and recognition of patterns such as channels, triangles, head and shoulders, cup and handles, and on and on, or
The art of representing price action through the numerous indicators available on your charting platform, such as moving averages, stochastics, MACD, and on and on.

This is great. It’s a good start. But the fact is that no matter how we define the structure of the market, whether based on...

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[accendotraders]

I really enjoyed this article. Price action is definitely first on my steps for analyzing a stock's performance. If it passes that test, I then go on to additional indicators for confirmation. I will definitely share this with my friends.

Michael Glass
http://blog.accendotraders.com

 

[skuberski]

All questions, no answers.

 

[STARBORG9]

Where/what are the answers?

 

[jeff2]

Price is it's own best indicator..sadly way too many traders don't understand that..

 

[Strangelydifferent]

Hi, you've got me interested but I confess am a little stuck on what you mean by the phrase "internal nature of price movement".
I'm guessing that you mean "those price movements that happen on a shorter and more recent timescale than that for which the indicators were evaluated".

As I say, this is a guess. Could you provide an example or so to illustrate it please?

 

[dinsy]

Hi Lance. I really enjoy your articles. I think what you're saying here is that for instance if the price is above the 50 MA thus implying a general uptrend, put a magnifying glass on the situation by maybe waiting for a pullback from 8 or 10 up sessions (signifying an easing of an overbought situation) and some sign of support, maybe using candle patterns and/or fibonacci levels for continuation of the uptrend. Is this what you're saying or am I barking up the wrong tree?
Your paragraph about "...the psychology of the people sitting on the sidelines.." is deep, I'll have to ponder that one for a while. Can't wait for your future articles on that subject. Thanks. Dino.

 

[Purple Brain]

Useful reality check into what's really going on

I thought the essence of the usefulness of this article were the bullet-points. The first 4 were insightful and real food for thought. The last one was on the psychology of the crowd and I'm afraid I have a blank spot with trying to assess what each one of the participamts in any specific market might be thinking or doing. It's just too complex for me to even embark on research and I appreciate that's my limitation rather than that of the author.

 

[foroom lluzers]

Guessing the noise for psychological misinterpretation?