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How to select stocks for trading using technical analysis?

How to select stocks for trading using technical analysis?

Postby clair33 » Thu Mar 21, 2013 9:54 am

Well, first of all which stocks we should go for? The ones which have high volatility or strong trend. Anything with less volatility and/or no trend will be making our investments blocked and even if it gives us returns, it won't be good enough. Hence the first thing which needs to be ascertained is volatility and trend situation. For volatility even a visual analysis can be good but otherwise indicators like Bollinger Bands and ATR etc You may find some good info at http://www.forexabode.com/technical-analysis and http://www.forexabode.com/technical-analysis/bollinger-bands. As far as trend is concerned you can use indicator like ADX. ADX can tell you the strength of the trend but not the direction, you may check +DI and -DI lines for that. You may check about ADX at http://www.forexabode.com/technical-analysis/adx.

After this you can use common technical analysis indicators like moving averages, MACD (http://www.forexabode.com/technical-analysis/macd) and others for entry and exits.

This is just a brief answer as technical analysis is a big subject but a couple of things:

1) Keep it simple and don't try to use too many indicators because that will only create confusion.

2) Do not try to use competing indicators to cross check the signals by other indicator. Have a simple system and stick to that.

3) You may use combination complementing indicators e.g. one indicator to ascertain the strength of the trend and other for getting the entry/exit signals.

4) It is not only the indicators but also what time-frame charts are using. It is always better to use longer time frame charts for overall situation and short time frame charts for trading positions.

5) Use trend lines and common chart patterns also.

6) It is always good to have an eye on the fundamentals also.

Thogh the above links are from a Forex site but technical analysis is same whether it is stocks or Forex or any other commodities.
clair33
 
Posts: 172
Joined: Mon Jun 25, 2012 10:46 am

How to select stocks for trading using technical analysis?

Postby wamblee » Thu Mar 21, 2013 10:55 am

Well, first of all which stocks we should go for? The ones which have high volatility or strong trend. Anything with less volatility and/or no trend will be making our investments blocked and even if it gives us returns, it won't be good enough. Hence the first thing which needs to be ascertained is volatility and trend situation. For volatility even a visual analysis can be good but otherwise indicators like Bollinger Bands and ATR etc You may find some good info at http://www.forexabode.com/technical-analysis and http://www.forexabode.com/technical-analysis/bollinger-bands. As far as trend is concerned you can use indicator like ADX. ADX can tell you the strength of the trend but not the direction, you may check +DI and -DI lines for that. You may check about ADX at http://www.forexabode.com/technical-analysis/adx.

After this you can use common technical analysis indicators like moving averages, MACD (http://www.forexabode.com/technical-analysis/macd) and others for entry and exits.

This is just a brief answer as technical analysis is a big subject but a couple of things:

1) Keep it simple and don't try to use too many indicators because that will only create confusion.

2) Do not try to use competing indicators to cross check the signals by other indicator. Have a simple system and stick to that.

3) You may use combination complementing indicators e.g. one indicator to ascertain the strength of the trend and other for getting the entry/exit signals.

4) It is not only the indicators but also what time-frame charts are using. It is always better to use longer time frame charts for overall situation and short time frame charts for trading positions.

5) Use trend lines and common chart patterns also.

6) It is always good to have an eye on the fundamentals also.

Thogh the above links are from a Forex site but technical analysis is same whether it is stocks or Forex or any other commodities.
its not as easy to answer this question my friend you sometimes just cant tell .
to select stocks is the very main thing which is required in the share market field and you are asking only that. but yes you can improve yourself by reading forex ebook which are available in very good plan.
good luck
wamblee
 
Posts: 42
Joined: Thu Oct 04, 2012 7:09 am

How to select stocks for trading using technical analysis?

Postby ruarc » Thu Mar 21, 2013 11:11 am

There are many different methods of technical analysis from simple trend lines analysis to some very complicated technical indicator analysis.

I like to keep it simple and mainly use trend lines with elliott wave theory
ruarc
 
Posts: 47
Joined: Wed Oct 03, 2012 5:14 pm

How to select stocks for trading using technical analysis?

Postby rald25 » Thu Mar 21, 2013 11:31 am

i would suggest the most volatile ones, forex or an index revolves around technical analysis i would suggest trade the eur/usd aus/usd or the s&p 500 just the one ofcourse. but stay away from markets where the banks set a floor price.
rald25
 
Posts: 30
Joined: Wed Oct 03, 2012 6:30 pm

How to select stocks for trading using technical analysis?

Postby taye » Thu Mar 21, 2013 11:47 am

There are countless books on the topic. I suggest that you buy some and read them.
taye
 
Posts: 134
Joined: Tue Jun 26, 2012 12:19 am


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