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Technical Analysis

What is Technical Analysis?

stock chart manTechnical analysis assumes that price reflects all that is known about a company at any given point in time. Of course, the disciplines can be combined. History repeats in many walks of life and price action that represents supply and demand, driven by the psychology of market participants, should be no different. Therefore it makes sense to me, that analysis of historical data is really a search for repeatable patterns or occurrences within that data that may repeat in real time over and over. It is a process of stacking the odds in your favour rather than one of prediction. It is a process of utilising probabilities and statistics.

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Stock Trading: My Top 5 Stock Trading Books

top stock trading booksCraig Fisher, Portfolio Analyst from The Chartist, has broken out of the beginner's cycle (finally!) Craig has put together a list of his top 5 stock trading books. These are the trading books he wishes he had found earlier and that he goes back to on a regular bases.

As my trading experience grows I am tending to read less stock market trading books, but still enjoy doing so. In my formative years, I read as much as I could but still would not profess to having ‘read them all’ by any stretch of the imagination – far from it. As a beginner I tended to focus on the Australian share market and consequently Australian books. It was probably also a function of price as they were significantly more affordable than those from the US. If I had my time over, I would research books a lot more and not let price be so much of a buying criteria, as my shelves are full of disappointing books that really don’t teach you much of what really matters.

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Short Term Trading – Trailing Stops

trailing stopsTrailing stop losses are a valuable tool when short term trading using technical analysis. Once a breakeven stop is reached, the trailing stop helps lock in profits as the trade progresses. The trailing stop removes angst and decision making during the trade as it provides a definitive answer as to when to close a position. They can be part of a computerised trading system to trigger exits or as part of a discretionary trader’s arsenal.

As with profit targets, the exit criteria is known and planned for before the trade is initiated. The exact level at which the trailing stop triggers is not known, but the conditions which are to trigger an exit certainly are. Such stops can be left in the market so they are triggered on an intraday basis for the end of day trader, negating the need to constantly watch the market, and allow the user to let profits run and cut losses short.

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Free E-book: Successful Stock Trading – A Guide to Profitability

successful stock trading by Nick RadgeNick Radge’s book Adaptive Analysis for Australian Stocks has been a huge success with some readers claiming the first 50 pages to be the 'stock trader’s bible'. As only a few copies of Adaptive Analysis are still available from The Chartist, we have decided to update and release those crucial pages as a free eBook.

Successful Stock Trading by Nick Radge will show you the maths behind profitability. It really is simple and is something that ALL traders, no matter the market being traded, must understand.

About Nick Radge has been trading and investing for 30 years. He is Head of Trading and Research at The Chartist. Nick and his wife, Trish Radge, established Reef Capital Coaching t/as The Chartist in 1998 and continue to work full time on the business. They also trade the same strategies alongside their clients.

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Technical Analysis – Indicators

stock chart manOne of the early decisions a new trader needs to make is what sort of trading they wish to undertake. Usually following on from that answer, the question as to whether some type of stock market analysis tool (i.e. trading software) is required, then presents itself.

As the budding trader embarks on the due diligence of purchasing a trading software package they can be subjected to the amount of indicators the package has or can be created, as a selling point. Once the decision is made and software downloaded, a potential problem begins to manifest itself, unbeknown at this point to the trader. Within the indicator section of the software is a plethora of indicators, each with adjustable parameters, styles and colours.

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