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If the graph is pointing up, people like whatever the heck that company does. If the graph points down, people don’t. That’s what I love about technical analysis. It’s such a time saver. Technical indicators work because: • Price Knows All: There is no need to study a company’s balance sheet. The market has done that for you. A stock’s fundamentals, performance and investor views have been decided via the buys and sells of the majority. All you need to do is study the chart and decide if they’re right. • Can’t Stop The Trend: Once a trend is firmly established, it should keep going in the same direction. Of course it will eventually reverse as traders cash out. But trends can go for months and maybe years. Discovering a trend is key in technical analysis. • Meet The New Boss. Same As The Old Boss: Because the market reacts the same to pricing patterns and information; history repeats. The public acts the same way towards a stock whose price is dropping today, as it did 100 years ago. Technical indicators use the past history of a stock prices to predict the short term future. If you’re a short term trader you use indicators for swing trades or trend conformation. If you’re a long term trader, you may use them to find the best entry point. There are many indicators. And they have cool names such as: Zig Zag %, Parabolic %, Ease of Movement, McClellan Oscillator, and the artsy, Andrew's Pitchfork. I have my favorites. And this section reviews the ones I feel are the most important. One-Click Stock Picks - Short Term Movers Only!
If you use too many indicators they'll contradict each other. Why? Because they were developed by different people with different views on the market at different times. They never got together to compare notes. And last but not least, you can tweak the indicators to reflect your preference. There is no standard for technical indicators. With that being said, I believe they're extremely useful. If the MACD for Yahoo! signals a buy, many traders will jump in and do just that. That’s reason enough to move a stock price. This section reviews the most popular indicators used in the history of trading ever. And quite simply, that's why I use them.
The Indicators. Best Of The Rest.Stochastics Puts You One Step Behind The Institutions
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