Technical trading for beginner

[Julia]

I've always been a longterm buy and hold investor and based decisions on fundamentals.

Would like to start learning something about technical analysis and would very much appreciate any advice about where to start. I've read what the ASX website has to offer.

Had the hard sell on the phone this afternoon from a representative from Protrader. Does anyone use this programme? If so, what is good about it? Is it suitable for a novice in the field? If you don't like it, can you say why not. What sort of thing should I be looking out for? I will always be inclined towards fundamental analysis but think I should have an understanding of alternative methods of decison making.

I'd be really grateful for any input at all from any of you who obviously are very experienced in TA.

With thanks

Julia

[bvbfan]

Initially check out sites like Incredible Charts, you can see a lot of technical studies information on the site and use the program.

I however like Freecharts (Pro - costs about $100 for life) the free version does very basic stuff and I started with that available from Spacejock at http://www.spacejock.com/

Sharesmag also did a comparison of various charting packages and should have the info on their site www.sharesmag.com.au

[Julia]

Initially check out sites like Incredible Charts, you can see a lot of technical studies information on the site and use the program.

I however like Freecharts (Pro - costs about $100 for life) the free version does very basic stuff and I started with that available from Spacejock at http://www.spacejock.com/

Sharesmag also did a comparison of various charting packages and should have the info on their site www.sharesmag.com.au


Hello bvbfan

Thanks very much. Will have a look at these.


Cheers
Julia

[GreatPig]

Julia,

Technical analysis covers a number of areas: chart patterns, indicators, and money management (although the last would apply to FA as well).

Classic chart patterns cover things like trend lines, triangles, flags, and gaps. The bible for this stuff is "The Technical Analysis of Stock Trends" by Edwards & Magee. A pretty dry read, not cheap to buy, and based on the US markets of the 1930s-1950s, but I think pretty much compulsory reading.

If you're interested in candlestick charting, with all those wonderful names out of Asian kung-fu movies :D, there are a number of books on that, one of the best known perhaps being Louise Bedford's book (which I've never read myself).

A lot of the more modern books cover indicators. There are more than 200 widely-known indicators, of which any one person I think would typically only use a few they liked. You can really get carried away with these things, and read all sorts of things into them, but at the end of the day I personally don't think they're all that important, unless perhaps you want to do very short-term trading. I look at a few, but find chart patterns, basic moving averages, and simple stop/loss methods the most useful.

Then there are other theories out there which some subscribe to like Elliot Wave, Gann, and Fibonacci sequences. Not ones I've looked at closely myself.

There's another thread or two on here that covers various books worth reading, but for technical analysis in general, I found Leon Wilson's "The Business of Share Trading" pretty good. Daryl Guppy's books aren't bad either, but tend to be a bit repetitive and he really hammers on his own methods (ie. Guppy multiple moving averages and countback lines).

Money management covers stop/loss and position sizing techniques to limit losses and maximize gains. Basically it's all about letting profits run and cutting losses short. The hard part of course is deciding when a falling price is a failed uptrend that needs to be terminated or just a consolidation before further gains. Typical stop/loss techniques take price volatility into consideration to help account for this. All books on TA should discuss this topic to some extent.

As for software, I don't know the first thing about Protrader. I originally used the free version of FCharts but soon bought AmiBroker. I think it's great for the price, especially if you want to get into doing scans and developing mechanical trading systems. Helps if you have some programming experience for that though. Even if you just stick with FA, I think having some basic charting program would be useful for timing entries and exits, and for studying historic price movements more readily. If that's all you wanted to do though, one of the free programs should probably do the job.

Cheers,
GP

[Milk Man]

Ditto to what GP said. You don't need programming skills to operate amibroker though. I'm not even good at maths and have it pretty well sussed in just a few weeks (with many thanks to this lot :D ).

[RichKid]

Would like to start learning something about technical analysis and would very much appreciate any advice about where to start. I've read what the ASX website has to offer.
.......
Had the hard sell on the phone this afternoon from a representative from Protrader. Does anyone use this programme? If so, what is good about it? Is it suitable for a novice in the field? If you don't like it, can you say why not. ......
Julia

Hi Julia,
Firstly, and you've probably heard this many times, have a real long, patient read through the old threads. I know it's unlikely that most people will do that since it's too easy but that's the best start I can think of, many books mentioned in those discussions, keep going over it. Try the ASX site for example again in a few weeks and see if your perspective has changed, lots of educational material.
Same answer for your protrader query, try a keyword search using the search tool.
The Beginners forum and the trading tips forum are the best place to camp out for the next few months. Good luck and take it slow.

[brisvegas]

Technical Analysis from A to Z by Steve Achelis is a great book to start your Tech trading library with. Send me a private with your email and i will forward it to you


............. bris


also have to say Fcharts is the best value charting software out there to start with

[brisvegas]

Also for the budget conscious Quotetracker is a fantastic free intraday charting software that i still use till this day. Has features that many very expensive softwares have.

http://www.quotetracker.com/


............. bris

[Julia]

To everyone who responded to my question - many thanks. Your suggestions are much appreciated.

Julia