Articles for: Technical Analysis

In Jack Schwager’s famous interviews of the ‘Market Wizards’ he compiled a list of the ten criteria that are present in all successful traders. Amongst that list was one which I believe to be the most glaringly difficult to master, that of patience. Sinan Koray and his excellent pieces on trading psychology will be the most expert individual to help you come to terms with and master the art of waiting, however, there are some very simple technical indicators that you can employ to decide whether or not now is a good time to be trading a given share, index or future.

It’s been a very interesting time in the currency markets. Mind you, I can’t remember too many boring times since I started trading these markets!

What do you think of when you see ABC Points on a chart? Very probably, you look at it as a potential trade, and then proceed to evaluate its strength or weakness. However, there is another very powerful use for ABC Points, and that is to give potential prices where moves may end and the trend may turn. As usual we will illustrate by looking at Santos (STO:ASX).

Back in March when the markets took off there were many reasons to believe markets globally could have fallen much further. So few investors got on board as risks were still high. Many traders – short term players – may have taken some positions but few would have been fully invested. Well done if you picked the low.

As we close on the end to the current financial year many are asking are the recent sell offs in the equity markets the sign of more to come. It has to be said since the early May we have travelled predominately sideways and this last climb to yearly highs has been very weak with volumes and average ranges shrinking. The fundamental news in the market has also been negative against a rising prices, this combined with the need for many stocks to go into capital raising by issuing more shares may have finally weighed the market enough for it to take a break.

Welcome from me to all our Safety in the Market traders to this month’s dedicated newsletter. I’ve just got back from the Adelaide Interactive Trading Workshop yesterday that was conducted with my mate Tim Walker. It is the second one in a row for us and really gave us a chance to build upon the current market action we had been following for the past couple of weeks. It’s personally given my stock CFD trading a boost as we have come across so many great set-ups that were just too good to pass up. I want to share a potential beauty with you on Seven Network (SEV).

The market myths that many people seem to hold as truth often amaze me. One from an Australian perspective is that if the US Market has a down day (overnight in Australia) the Aussie market will finish lower the next day. No doubt a similar belief may be held in the States regarding Australian and Asian markets, though I am sure their movements are far less publicized.

Reporting season can be a tricky time at best. In the good times the odd negative surprise can be brushed off as just being a mere blip and all will be forgiven in time.

When we last left Santos (STO:ASX) in Issue 309, it had suffered a significant sell-off in the aftermath of a 2-day trading halt due to a capital raising. The market was clearly oversold after falling 14.5% from the close of trading on 8 May to the close on 14 May. It then came back and made a first higher bottom on the 1-Day Swing Chart. I finished the analysis with the words, ‘this is yet again a time to watch this market carefully for a signal.’

Two names synonymous with Technical Analysis are Gann and Elliott, each having their die hard followers. As in many walks of life, people claim their area of study to be the best. Just look at diets, martial arts, weight loss programs or anything related to some kind of personal improvement. Practitioners of each style or method claim theirs is the best, hands down. The funny thing is most work in a similar manner to the same end. Trading in many ways is no different. I am a fan of the saying, “If it works use it!!”