Peg/Others -
Some suggestions to anyone looking at TA...
1. Get a good textbook that teaches about TA. Do not trust what you read on the Internet - much of it is too simplified, misleading, or just plain wrong. Read it cover to cover, and start to decide what fits best for you (your timeframe, risk level, etc.).
2. Buy an issue of 'Technical Analysis of Stocks and Commodities' (magazine). Use it as continuing education. If you like it (I think you will), subscribe.
3. Use something like QuotesPlus or TC2000 to start understanding TA indicators/signals.
4. Pick a simple system, and start trading on paper. Make sure that your system is profitable before using it with real money (many aren't). Do not try to use a bunch of different indicators simultaneously; that will just confuse you, because they will rarely all agree with each other.
4. If you later decide to move into serious TA, buy either Omega Research's SuperCharts (I use this one) or Equis' MetaStock. Both of these programs allow heavy-duty custom indicator building, scanning of stock databases based on TA signals, and best of all, optimization studies which allow you to fine-tune your rules/signals based on just about any criterion you might want (e.g., best $profit/trade, highest %profitability, highest %rate of return).
I use optimized DMI and MACD indicator systems, applying them to weekly data. These indicators help me find newly established uptrends, which I trade with. When the uptrend breaks down (again, shown by the same type of signals), I close the trade.
For instance, as of the end of 1/2, I showed previously established uptrends on BTO, CMGI, LTBG, and NACT.
This week there were new 'buy' signals on CGN, SATC, SEPR, and TRII.
Just my two cents worth...
Loren |
