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Gold/Mining/Energy : Precious and Base Metal Investing
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To: Louis V. Lambrecht who wrote (14844)7/27/2003 2:56:51 PM
From: Canuck Dave  Read Replies (3) of 39344
 
I trade charts. I do ok, but everyone has to find their own style.

Charts summarize trading action over various time scales. Use them judiciously with other indicators, and you can give yourself an edge.

Just my opinion.

Markets are as much about emotions as facts and fundamentals, and emotions change. You can often (not always) see those emotions change. Statistical indicators like MACD, RSI, etc. etc. try to capture those emotions in a graphical form.

Sometimes they succeed, sometimes they don't. Once in a while they give enough of a clear warning to tilt the odds significantly in our favor. That's all we need.

Again, just my opinion.

Let's use a real example. Chesapeake Gold (CKG) has fallen on tough times because they haven't announced anything lately. It's rumored they will pick up drilling and acquisition activity in the fall. I suspect the share price will firm up in advance of that.

Look at the chart, particularly the red (selling pressure) and green (buying pressure) lines in the top figure. Also, look at the share price itself.

stockcharts.com[l,a]daclniay[pb20][vc60][iUl14]&pref=G

A firming is indeed indicated. Voila, the odds are slightly tilted in our favor for a position here. That's as good as I can do.

CD
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