In the Money - Stock Charts

Trading using stock charts is about attempting to predict the highest winning probability or the next move or direction in which the price will go.

It is all about attempting to capture mass human behaviour or crowd psychology in the market place.

This resulting action or reaction is what makes the price and this is captured in the charts.

How traders had reacted in the past to a given situation in the market, will almost always repeat it self and hence becomes predictable.

Nothing can prepare you enough for your initial step onto the trading world!

This mass trader action captured in the charts can be analysed and traded with a certain degree of accuracy.

Technical analysts’ will tell you that every thing is built in the price, the fundamental, technical and psychological trader behaviour.

Technical analysts or Chartists as they are sometimes called claim that charts “speak” a language of their own and traders passionate about technical analysis can sit and gaze at trading charts for hours on end without ever getting bored.

It is believed that the longer a chart is studied the more information one can gleam about the market or instrument being traded. This is probably why most traders are very private individuals

In my strategy, chart analysis is a simple setup that makes use of a minimum of indicators. I explain how these indicators work in tandem to give the final analysis and also show you when to ignore some of them!

In the above chart setup which I use for all my trading illustrates just how simple it can be. All it comprises of are Bollinger Bands, Moving Averages, Parabolic SAR, RSI and Stochastic Indicator

Bollinger Bands get spiked or tagged at the top left green corner expect price reversal, moving averages below yellow ball stack up in required order to confirm down trend, SAR indicates "short" trade and candlestick chart supports bearish sentiment closing below the 8MA.

After 15 years of trading I found this simple method of predicting and analysing charts works best when traded with strict discipline.

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