Charting Software And Technical Analysis
Charting software comes pre-loaded with a tremendous amount of technical analysis indicators. It’s fun to sift through the indicator tab and plot the various indicators looking for the one that best finds tops and bottoms or new trends. For my style of trading staying as close to price is the best strategy. Price is the essence of supply and demand. Every calculation made on price tends to alter the information revealed by price. For example, moving averages “average” data, the stochastic oscillator attempts to define the current price in relation to price action over a certain period of time. Attempting to define, quantify, or average price can create lag. There is a place for a few indicators in a trading system. Indicators can detect subtle changes that aren’t readily visible on a price chart. Yet some traders have a tendency to become overly confident in this information and miss trades, stay in trades too long, or delude themselves that the losing trade is about to turn around and become profitable. Perfecting a few indicators on a price chart can create a path to profitable trades. Trend lines, and support, and resistance are my favorites. Keep these simple indicators current and you can prove to yourself their value. It doesn’t take a fancy system with complex algorithms to make money. It takes discipline, repetition, and patience. I think it was Jesse Livermore who is often quoted as saying, and I paraphrase — It’s not the “doing” that makes money, it’s the “sitting”. I have had the privilege of coaching traders who wished to improve their skills. One of the most common exclamations after our sessions is, ” I didn’t know trading could be simple AND profitable!”
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