Principles which make easy to read stock charts
Free stock market advice
for better reading of stock charts
in technical stock market analysis
Sometimes is it not easy to read stock charts. I often discuss stock chart technical analysis with other traders and with readers of my web site and my simple stock trading blog.Reading of stock charts is often very complicated for them. I am always surprised how some of them could complicate the technical stock market analysis that they perform on live stock charts or long term stock charts. It is not easy to read stock charts for them. I asked them to tell me what is most problematic for them. I found common points in their answers. These points I would like to address and stress some good solution how to avoid problems when using technical stock market analysis.
Common problems
in technical stock market analysis
The answers were little bid broader then this list but these points are core issues that most stock market traders and self directed investors have.
My free stock market advice how to solve
technical stock market analysis problems
I hope that my answers help to make more easy to read stock charts.
They use only one time frame
A lot of traders and investors watch only one chart . They watch daily chart if they want to hold position for days or weeks. Or they monitor only one intraday chart if they are day-traders. They are missing bigger picture. They are missing to see important levels of support and resistance. I mentioned several times on my site that I have
three different time frames
at the same time on my screens.
They do not use candlestick charts
If you are buy and hold investor you can live with line chart of stock market index charts and see if stock markets are up or down. But if you are active investor or trader you must see more information on the chart. Use
candlestick charts
. Learn what candlesticks are and
how to read
them.
Their charts are not readable
They use one chart and it is filled with many indicators. They use several moving averages and a lot of different indicators like MACD, RSI, Wilders, Momentum, Bollinger Bands, OBV and a lot of more. It is useless. Most of these indicator are only some form of price formula. Keep your charts as simple as possible. Check what I am using on
my charts.
They are not sure if stock will do what they expect
Nobody is sure.
Stock chart analysis
helps to predict possible future. But we are not able to predict it at cent per sent. We can use historical stock charts and real time stock charts to try to predict future the best way we know. But as it is not for sure, we must use
risk reward ratio
,
stop loss
limits and other
money management
tools.
They do not know what is best stock to buy now
Well neither can I. But I try to select the best possible stocks and ETF. This stock and ETF list offers best risk reward ratio. These stocks and ETFs has best chance to move in my direction. It is important to be selective. And make final decision will be hard. You have to do it yourself. What can help you is that you have your stock trading strategy tested by paper trading or previous trading with small amount of money. Such history history of online stock trading you will have described in your
stock trading journal
could lead to creation of similar
method for picking the best stocks and ETFs
like I prepared for myself.
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