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.
A very likely cause for this is our subjection to mainstream media. Whenever you read a finance website, the headlines are generally pertaining to quarterly earnings, mergers and acquisitions, or if we're fortunate enough- the latest court case.
I suppose "CEO ponzi lawsuit" will usually draw stronger blog traffic than "bearish engulfing pattern".
So this is the reason why the newbie trader is pretty much susceptible to a given way of trading. They turn on the tv, see a press release, and maybe read some hyped up forum posts. This is a harmful way to start, but for the brand new trader, this is par for the course. To make matters worse, new traders will usually tend to go toward penny stocks. The higher inherent danger is squashed by the perception of obtaining a larger amount of stock and the desire for a monumental gain.
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 who believe we are all on a level playing field:
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 opportunity for self-sufficiency is just what should make technical analysis so irresistible to the average joe. You aren't at the mercy of yesterday's news. Your number one tools are your charts, and your charts can't misrepresent the facts. Moving averages, candlesticks, and patterns are honest and you will not need to worry about an unforeseen threat right around the corner. When you understand a TA strategy, it will not disappear and it can be employed as you wish, today, and in the coming years.
Every new trader should give technical analysis a swing, even if it merely means carrying out a couple of paper trades. Switching off the press releases and relying on your own expertise is a relatively nice feeling. I'll not soon forget my very first technical trade. I discovered a breakout stock with a great pullback and a smaller banner pennant. I chucked a little dough at it and established a tight stop loss. And after three days, I had made 40% and recognized my indication to sell. I earned 800 greenbacks on a stock that I discovered with my very own eyes, my own personal judgment, and all from the warmth of my very own home.
So now doesn't THAT sound like a better way to trade?
A very likely cause for this is our subjection to mainstream media. Whenever you read a finance website, the headlines are generally pertaining to quarterly earnings, mergers and acquisitions, or if we're fortunate enough- the latest court case.
I suppose "CEO ponzi lawsuit" will usually draw stronger blog traffic than "bearish engulfing pattern".
So this is the reason why the newbie trader is pretty much susceptible to a given way of trading. They turn on the tv, see a press release, and maybe read some hyped up forum posts. This is a harmful way to start, but for the brand new trader, this is par for the course. To make matters worse, new traders will usually tend to go toward penny stocks. The higher inherent danger is squashed by the perception of obtaining a larger amount of stock and the desire for a monumental gain.
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 who believe we are all on a level playing field:
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 opportunity for self-sufficiency is just what should make technical analysis so irresistible to the average joe. You aren't at the mercy of yesterday's news. Your number one tools are your charts, and your charts can't misrepresent the facts. Moving averages, candlesticks, and patterns are honest and you will not need to worry about an unforeseen threat right around the corner. When you understand a TA strategy, it will not disappear and it can be employed as you wish, today, and in the coming years.
Every new trader should give technical analysis a swing, even if it merely means carrying out a couple of paper trades. Switching off the press releases and relying on your own expertise is a relatively nice feeling. I'll not soon forget my very first technical trade. I discovered a breakout stock with a great pullback and a smaller banner pennant. I chucked a little dough at it and established a tight stop loss. And after three days, I had made 40% and recognized my indication to sell. I earned 800 greenbacks on a stock that I discovered with my very own eyes, my own personal judgment, and all from the warmth of my very own home.
So now doesn't THAT sound like a better way to trade?
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