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Pastimes : Market Gems - Gigantic Humanoid or Lame Ripoff? -- Ignore unavailable to you. Want to Upgrade?

To: Patricia who wrote (17)	5/22/2001 11:15:47 AM
From: Don Pueblo	Read Replies (1) \| Respond to of 25

I am not a fan of looking at something that is incorrect to try and understand a concept. Jenna's "double top" was posted to illustrate a breakout, when a true double top is a reversal pattern! Better idea is to look at something that actually illustrates the chart pattern. Here's a daily chart of HDI. The Jan-Feb Double Top is easily observed... siliconinvestor.com But before you get into chart interpretation, it's important that you understand the basics of Technical Analysis. Not everyone in the whole world is a fan of TA, but the majority of competent analysts use TA in conjunction with various forms of Fundamental Analysis. Asking about TA is like asking about cars. There are thousands of different cars, with thousands of different motors, and a Ford fan might not be the best guy to ask about Fiats. Similarly, there are literally hundreds of different ways to try and interpret price action on a chart. People who are new to the discipline (like Jenna) tend to "over-think" and obfuscate chart interpretation, where people who are true masters, like Tom Dorsey, Martin Pring, or Thomas DeMark, gravitate towards simplicity. My personal favorites are Dorsey and DeMark, because they insist on things that can be actually observed and totally understood by anyone who understands their books. Further, it is important to understand the nomenclature and the specific "rules", since if one is confused about that, one is doomed as far as valuable interpretation of price movement...and technical analysts do not always agree on their definitions. (This is most evident in one kind of TA, called "Elliot Wave Theory"; it's hard to find two "wave dudes" who will agree on two things in a row.) Unfortunately, TA is not a simple thing to try and learn. There are hundreds of books on the subject. Some are quite valuable, some are totally useless, and most have some valuable information and some nonsense - and it's hard to tell the two apart. <G> The best single book on the basics of TA and interpretation of traditional chart patterns is probably the book I referenced in my prior post. amazon.com and the study guide that goes along with it: amazon.com ...but keep in mind that these books could be considered only an introduction to TA. In my personal opinion, the key to success in your study is an understanding of what you are studying. Fortunately there are many good on-line dictionaries and glossaries equis.com traders.com ...and good tutorials for some technical indicators e-analytics.com My advice is to pick one thing - anything - like for example "moving averages" (since CNBC talks about them a lot) and work on understanding that. Then pick something else. Keep looking at things until you see something that makes sense to you, and then stop right there and concentrate on that one thing. Study it until you really understand it. Most successful strategies that involve TA include other things, such as reward/risk ratios and diversification of assets. The best single source for everything you want to know, in my opinion, is right here on SI, and it is free! The emphasis is on day trading, which is NOT NOT NOT the way to learn these things, but overall, Eric's thread and his thread summaries are just outstanding. Many great people contributed to this thread. If you find someone that "fits" you personally, then pay attention to him or her. Pay attention to what works and ignore things that don't work. Subject 28776 Aside from investing in books that you can refer to, you need not spend any money to learn everything you will ever need to know about Technical Analysis. Although some "not advisors" can provide a very valuable service, people that charge money for picking stocks should be approached with a healthy dose of skepticism IMHO, especially if they have disclaimers on their sites stating that they are not in the business of advising people or picking stocks.<G> There are many excellent TA people on this site. Rather than point out ten and miss one, I'll let you roam around and find them. One hint - Jenna is not one of them. Let me know if I can be of any further help!