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POWER TO THE PRIVATE TRADER TOUR


Technical Analysis – Powerful Tools for Timing Trade Entry and Exit

Technical analysis when used properly is a powerful tool that improves the timing of trade entry and exit. Employing the many skills involved – charting, interpretation, and confirmation – enables you to improve your overall trading skills.

Technical analysis is a process of study focusing on price and related signals. These include volume, momentum, and moving averages. A technician is most likely to employ stock charts in the search for price patterns. The intention of this analysis is to identify price reversal points, so that timing of position entry and exit will be improved.

This presentation introduces a range of tools associated with technical analysis in four primary areas:

  • Fundamental vs. technical analysis: Differences and similarities; using both together in a coordinated program.
  • Does technical analysis work? Examples and a case study showing the value of technical analysis.
  • Criticism of technical analysis: Short-term price movement is chaotic, so how does it provide meaning? The essential features of price patterns, oscillators and moving averages.
  • Assumption behind technical analysis. Even with chaotic price movement, all economic matters (including supply and demand in pricing of assets) has predictable and specific order. It does not always manifest, but it does so often enough to provide traders with guidance.


About Michael C. Thomsett

Michael C. Thomsett
Michael C. Thomsett

Michael C. Thomsett is a professional author with dozens of published books. These include many on technical analysis and related topics, such as The Bloomberg Visual Guide to Candlestick Charting (John Wiley & Sons), Trading with Candlesticks (FT Press), Getting Started in Stock Investing and Trading (John Wiley & Sons), and Mastering Technical Analysis (Dearborn Press). Thomsett also teaches several courses at the New York Institute of Finance, on the topics of options trading and candlestick charting. He is also co-founder of an educational site for options trading, ThomsettOptions.com. He lives near Nashville, Tennessee.

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