Even with the surge of web-based brokerages and the sheer sum of folks trading stocks from home, I am quite surprised with the current obscurity surrounding technical analysis. Sure there is a technical analysis community out there, yet it is hardly anything if compared to the rest of the trading community. Almost no people begin their trading career with the intent of utilizing technical analysis. Traders usually get started making use of fundamental analysis and learn about technical analysis either afterwards... or maybe 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 suppose "CEO ponzi lawsuit" will usually draw stronger blog traffic than "bearish engulfing pattern".
So this is the reason why the fresh new trader is already predisposed to a distinct form of trading. They flip on the news, see a press release, and maybe read some overrated forum posts. This is a unsafe way to start, but for the fresh trader, this is all too common. On top of this, new traders will typically move towards small cap stocks. The elevated financial risk is squashed by the idea of owning a larger amount of stock and having a better chance to strike it rich.
Sure, I know- the true fundamental folks are taking part in a lot more than just watching the news and rolling the dice. But, the typical trader isn't. The fresh trader is trading on 'hot tips', blog posts, and generally speaking other forms of hearsay. The dilemma is undeniable- average Joe is the last guy in the queue to hear the headline! By the time anything of importance makes its way to the public, it has already been passed to friends, colleagues, and ultimately just about anybody who is someone on wall street. I love taking a look at a stock chart soon after bad news is publicized. What? The stock started to tank a few days ago? Gee what a coincidence.
And for those of you reading who believe the SEC can actually protect against insider trading:
Next time you're on the beach and decide to take a swim, make sure not to swim too far away - we would be so sad to see you tumble off the edge of the planet.
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.
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.
THIS is definitely what I consider 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 suppose "CEO ponzi lawsuit" will usually draw stronger blog traffic than "bearish engulfing pattern".
So this is the reason why the fresh new trader is already predisposed to a distinct form of trading. They flip on the news, see a press release, and maybe read some overrated forum posts. This is a unsafe way to start, but for the fresh trader, this is all too common. On top of this, new traders will typically move towards small cap stocks. The elevated financial risk is squashed by the idea of owning a larger amount of stock and having a better chance to strike it rich.
Sure, I know- the true fundamental folks are taking part in a lot more than just watching the news and rolling the dice. But, the typical trader isn't. The fresh trader is trading on 'hot tips', blog posts, and generally speaking other forms of hearsay. The dilemma is undeniable- average Joe is the last guy in the queue to hear the headline! By the time anything of importance makes its way to the public, it has already been passed to friends, colleagues, and ultimately just about anybody who is someone on wall street. I love taking a look at a stock chart soon after bad news is publicized. What? The stock started to tank a few days ago? Gee what a coincidence.
And for those of you reading who believe the SEC can actually protect against insider trading:
Next time you're on the beach and decide to take a swim, make sure not to swim too far away - we would be so sad to see you tumble off the edge of the planet.
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.
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.
THIS is definitely what I consider insider trading!
About the Author:
To understand the difference between an unsuccessful new trader and a successful new trader, take a look at Will Thorton's totally free Technical Analysis Class. You shouldn't trade stocks before educating yourself. Play it safe and learn Technical Analysis right now.
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