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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Smooth Drive who wrote (10966)	8/16/2000 9:31:43 AM
From: TechTrader42	Read Replies (1) \| Respond to of 12039

Eric: It's a good question, and you'd probably get different answers from everyone using technical analysis. I'm no expert, but I'll give you my two cents' worth. My three to take to a desert island (with a laptop and satellite phone) would be: MACD; the 200-day simple moving average; and support and resistance (based on trendlines, price clusters, or indicators and systems). The periods for MACD would depend on the trader and the length of trade. The signals could be based on reversals in MACD or the zero line, again based on the trader. I prefer to use the histogram, because it's clearer. The 200-day MA can be used as a signal line and as a line indicating support and resistance. Watch stocks bouncing off it as them come down toward it, and bumping against it as they move up toward it. Look at TXN and AMAT recently, for example. (Thanks, Monty. :) ) There are all sorts of ways to find support and resistance. Prices go where they've gone before. You could trade based solely on previous prices -- even based on yesterday's prices. You can focus on price clusters, draw trendlines based on highs and lows, or use a variety of indicators and systems to help find support and resistance -- for example Mel Widner's indicators for Metastock, or Gann-based ideas in Murrey Math. You can buy at support and sell at resistance, or look for breakouts above and below resistance and support. I cheated with that last one, because there are all sorts of ways to determine support and resistance. I'd have to look around the desert island, and see what was available. Just about anything does the trick. S'all based on where prices have been. Eric: What would you choose? Monty? Webb? Mike?