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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:

  • Charts
    • Charts - the examples show how price is combined with other indicators, like MACD, RSI and Volume.
    • Scaling - The different scales of price affect the appearance of the chart.
    • Chartists and what they do.
    • Volatility and what it looks like on the chart.
    • Charts in relation to a stock's fundamentals.
  • Types of charts
    • There are three primary types - line charts, OHLC and candlesticks. This segment demonstrates how these function.
  • Chart properties
    • This third segment discusses both time scale and price scale and how these are set up on the chart.
  • Western technical analysis
    • This fourth segment includes examples of traditional technical analysis on the chart: Resistance and support; head and shoulders; tops and bottoms; flags and pennants; triangles and wedges; and gaps.


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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