The E-Book of Technical Market Indicators HTML version

The E-Book of Technical Market Indicators
The transparency of the American markets offers an array of indicators and allows
deep insights of prevailing sentiment. You find the activities of NYSE members like
specialists and floor traders, public and odd lot short sales, the Short Interest Ratio as well
as the large block transactions of the institutional investors published every week. Other
tools for technical analysis include trend indicators, daily advances and declines, daily new
highs and lows, volume, indices, put/call ratios and other useful information like Stochastics,
RSI, MACD, TICK and more. The problem is only that all these indicators contradict each
other most of the time. Countless books have been written on this subject, and no matter
how many will be written in the future: always be aware that there is no such thing as the
Holy Grail of the stock market. But some people are more successful than others and the
answer is quite simple:
No indicator is right all the time and you don't have to be right all the time. Just be
right a higher percentage of the time than wrong. Choose some reliable indicators and stick
to them. Don't follow some indicators for a while and switch to some others if they fail. Don't
be a technician in the first half of the year and a fundamentalist the next half. Be consistent
and disciplined in your approach. Don't abandon a good indicator because you think this
time everything is different.
It takes of course a lot of guts because the opinions of the most widely quoted gurus
of Wall Street are usually contrary to your indicators at that time. This is much easier if you
don't use margin. You will sleep a lot better if you buy fifty shares of IBM with the money
you can spare than two hundred shares on credit.
Happy Trading
Wall Street Courier
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