My Basic Trading Tools (Revised)

Author: Lee TG | Publish date: Thu, 17 Feb 06:39 | >> Read article in Blog website Before I opened up this blog to the world, I have written an article on my basic trading tools. These tools should still apply to new technical analysis learners, and the article can be found here http://fundamentalwithtechnicalanalysis.blogspot.com/2010/11/basics-trading-tools.html As times progress, with more in depth learning of other tools and basics, especially on the aspects of price and volume analysis, VSA and market psychology, I have made a change of the tools that I currently use to forecast more accurately what can lie ahead. This is necessary as we learn to discover better tools and new knowledge that can fit our investment profile and personal characteristics. The new set of tools that I will use now are: 1. Candlestick patterns: all the time 2. Chart patterns and trend lines : all the time 3. Support and resistance: all the time 4. Bollinger Band: sometimes 5. Moving average (2,5), EMA 20 days, 30d EMA, 50d EMA: nearly all the time 6. Stochastic and MACD: sometimes 7. Fibonacci retracement: sometimes 8. Volume Spread Analysis: all the time (new) 9. Fundamental analysis of the company: all the time 10. Psychological analysis of market participants: all the time (new) Though the lagging technical indicators like (4) and (6) are important for new learners, I find that the leading indicator like volume analysis will be more useful to me, and the candlestick and chart pattern. A new knowledge (item 10) is very useful to me, and I will apply all the time is the psychological analysis of the market. For new learners of technical analysis and charting, my advice is not to jump the gun to learn item (8) without going for a training program and later mentoring sessions, as it is a difficult knowledge to absorb, and you may get more confused rather than learning it. Learn the very basics from (1) to (7) first and some fundamental analysis (9), and mastering the basics of these will surely help you to be a better trader. It may take months to learn even the basics of (1) to (7), and never try to learn more than what is necessary, as most people do, because you will lose the focus and you do not have time to learn so many tools. "It takes a long time to bring excellence to maturity." - Publilius Syrus