Monday, September 21, 2009

TA & Price action


My idea of understanding Technical analysis found resonance in an excellent post by Newton Linchen in his characteristic clarity.

  1. Earlier I struggled with Charts having huge number of Indicators , Filled with lines. But now I feel simplicity is the best and understanding of price action is more important than indicators.
  2. Basics of candlesticks and how they are forming is intutively appealing.
  3. I find Maoxian's illustration of charts worth studying.
  4. Illustrating how the process of arriving at a trading decision and the details of building evidence before the trade is the hallmark of good trading educator.
  5. After the fact the patterns appear to be very easy and to see the Seminar gurus keeping on explaining the left hand side of the chart is irritating. The trader has the challenge of deciphering the the hard righthand side of the chart.
  6. In many cases market moves by surprise and with violence. What you see on the charts might have happened in one bar or spike. The trader studying static charts with indicators does not realize this.

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