With the growing market of internet based brokers and the substantial volume of people trading from home, I am kind of disappointed at the continuing lack of knowledge surrounding technical analysis. Obviously there is a technical analysis circle on the web, yet it is nothing in comparison to the rest of the trading community. Relatively few people embark on their trading career with a technical analysis mindset. People normally start off by using fundamental analysis and learn about technical analysis either later on... or otherwise not at all.
Probably the most likely reason for this is our exposure to mainstream newspaper and tv. Any time you read a finance website, the headlines tend to be about growth rates, mergers and acquisitions, or maybe if we're lucky enough- the latest lawsuit.
I guess "CIO love triangle" will usually pull far better ratings when compared with "bearish engulfing pattern".
So this means that the fresh new trader is already prone towards a specific type of trading. They switch on the news, read a press release, and maybe read some hyped up blog comments. This is a unsafe way to start, but for the beginner trader, this is all too common. Furthermore, fresh traders will often move towards small cap stocks. The elevated risk is marginalized by the idea of possessing extra stock and having a better chance to strike it rich.
Yes, I understand that the real fundamental guys are going through a lot more than just reading a blog and shooting in the dark. But average Joe isn't. The new trader is trading on random advice, news stories, and basically a pile of rumors. The dilemma is undeniable- average Joe is the last person in the queue to hear the press releases! By the time a news story finds its way to the general public, it has already been whispered to buddies, colleagues, and just about anybody who is anybody on wall street. I love taking a look at a stock chart just after bad news is announced. What? The stock began to go down a few days before? I can't imagine why.
And for those of you reading who believe the SEC can actually protect against insider trading:
The next time you happen to be on a beautiful sandy beach and decide to take a swim, make sure not to swim too far away as you might slip off the edge of the earth.
The prospect of freedom is really what should make technical analysis so popular with the average trader. You aren't at the mercy of yesterday's stale news. Your crucial tools are your charts, and the charts won't tell lies. Moving averages, candlesticks, and chart patterns are precise and you do not need to think about an unforeseen danger showing up at any minute. When you learn a TA concept, it will not go away and it can be employed as you want, each and every day.
Give technical analysis a try, even if it simply means doing a a handful of paper trades. Turning off the press releases and depending on your own expertise is a rather awesome experience. I'll always remember my very first technical trade. I discovered a breakout stock with a nice pullback coupled with a very small flag pattern. I chucked a bit of cash at it and established a snug stop-loss. And after three days, I had earned 40% and recognized my indicator to sell. I earned eight hundred bucks on a stock that I found with my own eyeballs, my personal strategy, and all from the enjoyment of my own home.
How is THAT for insider trading?
Probably the most likely reason for this is our exposure to mainstream newspaper and tv. Any time you read a finance website, the headlines tend to be about growth rates, mergers and acquisitions, or maybe if we're lucky enough- the latest lawsuit.
I guess "CIO love triangle" will usually pull far better ratings when compared with "bearish engulfing pattern".
So this means that the fresh new trader is already prone towards a specific type of trading. They switch on the news, read a press release, and maybe read some hyped up blog comments. This is a unsafe way to start, but for the beginner trader, this is all too common. Furthermore, fresh traders will often move towards small cap stocks. The elevated risk is marginalized by the idea of possessing extra stock and having a better chance to strike it rich.
Yes, I understand that the real fundamental guys are going through a lot more than just reading a blog and shooting in the dark. But average Joe isn't. The new trader is trading on random advice, news stories, and basically a pile of rumors. The dilemma is undeniable- average Joe is the last person in the queue to hear the press releases! By the time a news story finds its way to the general public, it has already been whispered to buddies, colleagues, and just about anybody who is anybody on wall street. I love taking a look at a stock chart just after bad news is announced. What? The stock began to go down a few days before? I can't imagine why.
And for those of you reading who believe the SEC can actually protect against insider trading:
The next time you happen to be on a beautiful sandy beach and decide to take a swim, make sure not to swim too far away as you might slip off the edge of the earth.
The prospect of freedom is really what should make technical analysis so popular with the average trader. You aren't at the mercy of yesterday's stale news. Your crucial tools are your charts, and the charts won't tell lies. Moving averages, candlesticks, and chart patterns are precise and you do not need to think about an unforeseen danger showing up at any minute. When you learn a TA concept, it will not go away and it can be employed as you want, each and every day.
Give technical analysis a try, even if it simply means doing a a handful of paper trades. Turning off the press releases and depending on your own expertise is a rather awesome experience. I'll always remember my very first technical trade. I discovered a breakout stock with a nice pullback coupled with a very small flag pattern. I chucked a bit of cash at it and established a snug stop-loss. And after three days, I had earned 40% and recognized my indicator to sell. I earned eight hundred bucks on a stock that I found with my own eyeballs, my personal strategy, and all from the enjoyment of my own home.
How is THAT for insider trading?
About the Author:
To learn the distinction between an unsuccessful new trader and a triumphant new trader, go and visit Will Thorton's 100 % free Technical Analysis Course. Never go into stocks without a plan. Be smart and learn Technical Analysis as soon as possible.
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