Learn Stock Market Investing Techniques Through Technical Analysis
For people looking to learn stock market investing techniques, a great place to start is through gaining an understanding of technical analysis tools. Although technical analysis is never enough determine whether to execute a trade, it can provide statistical data on entry and exit points.
With hundreds and hundreds of different technical signals available, the following three are among the most reliable and solid indicators. When investors start to learn stock market investing techniques, these three provide an excellent introduction as well as reliable indicators when it comes to making those first trades:
Head-and-Shoulders. Long considered the strongest technical indicator, a head-and-shoulders formation provides a very reliable trend indication as to whether to buy or sell a position in the stock under consideration. A head-and-shoulders top pattern has three sharp high points, created by three successive rallies, with the second rally reaching a higher point than the first and third rallies. This formation is a strong indication to sell the stock and is quite easy to spot, even for people who want to learn stock market investing techniques. Investors should use volume as a confirmation of this patter, with volume highest on the first rally (the left shoulder) and lowest on the last of the rallies (the right shoulder).
Gaps. One of the easiest technical formations to spot, people who want to learn stock market investing techniques will automatically become drawn to gaps (up or down). Typically, gaps provide support or resistance to stock trends. Although trading on a gap up or down can become risky for people who are just starting to learn stock market investing, when a regular trend breaks through that previously formed gap, it is quite possibly a sign of a strong price movement.
Bollinger Bands. Considered an Oscillator when it comes to technical analysis, this does not provide a pattern, per se. Instead, it measures the volatility from the stock's trading mean. Volatility here is defined as two or three standard deviations from that mean, or moving average. Traders who have started to learn stock market investing techniques need to understand that when the stock price crosses the upper "band" a sell signal is triggered and, likewise, when it crosses the lower band, a buy signal is triggered. Cross-overs typically happen during periods of high volatility.
For people who want to learn more about stock market investing techniques, there is a wealth of information available on line, most of it at no cost. However, for more serious investors, stock trading software completes much of the work for you. In fact, many brokerages offer technical analysis resources for free with most accounts. - 23223
With hundreds and hundreds of different technical signals available, the following three are among the most reliable and solid indicators. When investors start to learn stock market investing techniques, these three provide an excellent introduction as well as reliable indicators when it comes to making those first trades:
Head-and-Shoulders. Long considered the strongest technical indicator, a head-and-shoulders formation provides a very reliable trend indication as to whether to buy or sell a position in the stock under consideration. A head-and-shoulders top pattern has three sharp high points, created by three successive rallies, with the second rally reaching a higher point than the first and third rallies. This formation is a strong indication to sell the stock and is quite easy to spot, even for people who want to learn stock market investing techniques. Investors should use volume as a confirmation of this patter, with volume highest on the first rally (the left shoulder) and lowest on the last of the rallies (the right shoulder).
Gaps. One of the easiest technical formations to spot, people who want to learn stock market investing techniques will automatically become drawn to gaps (up or down). Typically, gaps provide support or resistance to stock trends. Although trading on a gap up or down can become risky for people who are just starting to learn stock market investing, when a regular trend breaks through that previously formed gap, it is quite possibly a sign of a strong price movement.
Bollinger Bands. Considered an Oscillator when it comes to technical analysis, this does not provide a pattern, per se. Instead, it measures the volatility from the stock's trading mean. Volatility here is defined as two or three standard deviations from that mean, or moving average. Traders who have started to learn stock market investing techniques need to understand that when the stock price crosses the upper "band" a sell signal is triggered and, likewise, when it crosses the lower band, a buy signal is triggered. Cross-overs typically happen during periods of high volatility.
For people who want to learn more about stock market investing techniques, there is a wealth of information available on line, most of it at no cost. However, for more serious investors, stock trading software completes much of the work for you. In fact, many brokerages offer technical analysis resources for free with most accounts. - 23223
About the Author:
Chris Blanchet spent over 16 years as a Financial Advisor at one of the largest banks in the world. For investors who want to learn stock market investing techniques, visit Online Trader Today.com. Chris also maintains a Debt-Free Blog at How To Repay Debt.com
posted by X - Men @ 2:31 AM
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