Technical Analysis

This bears repeating, but I can't quite remember when I said this, technical analysis ROCKS!!!

There is no way I can put up a line before things happen in the market, and it comes to touch that line and reverse from there or trace.

What are the questions ANY person might ask whether investor or trader? When is a good time to get in? More specifically, for those who only play to the upside, is, "When is a good time to buy?" That one may seem obvious, but many people find themselves buying when they should be selling or just waiting.

The best time to buy is when you're at support (aka "The Bottom"). You're getting things at a wholesale price. Who doesn't like a good bargain. The key, then, is to understand where that bottom is.

Some NOT good reasons to get in:

1. EVERYONE I know is buying it. How do you know they are right?

2. The analysts tell me that it's a good buy. Let me let you in on a little secret. If they're telling you to BUY, DON'T. That's secret code to tell the big guys and others that it's time to SELL. Of course, once you realize this, it's too late. The prices have dropped considerably and if you get out, it'll be a huge loss for you, so you hang on, HOPING it'll come up. It's GOT TO come up. You just KNOW it's got to come up. Sound familiar?

You don't know Jack Sh** whether it's going to come up or not. You just HOPE. Hope = Dope.

3. You know a friend of a friend that KNOWS this is a good product, service, whatever, and if you get in now, it's a sure bet. Yes, it's a sure bet that you'll lose your money. Have you done your due diligence with the company? I mean REAL due diligence, not just a bunch of heresay. This is not venture capitalism, because those real venture capitalists do their due diligence.

Yes, we probably all know people who have invested in company XYZ and years later (i.e., Yahoo or Google or whatever), they became bazillionaires by doing nothing because the stock went through the roof and they were able to cash out.

How many people do we know that have done the same thing and have NOT become bazillionaires?

Do your due diligence.

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Back to technical analysis. Good technical analysis allows you to look at the markets, stock, or whatever objectively. You're not jaded by news, the economy, world events or at the whims of people. Traders, those who control the markets, move in patterns.

We all are human, with behaviorial patterns. The market is NOT random. It moves in patterns.

When you can determine where supports & resistances (whether major or minor), this will change how you're able to make money.

@ SUPPORT: Go long, BUY, CALLS.

@ RESISTANCE: Go short, SELL, PUTS.

It's really what it boils down to.

As a technical trader, if you look back at my charts, they show the technical parameters I use. It's up to me to decipher them and to make them work for me. There is often a fine line between support & resistance, as they can almost act like one in the same, but they are not.

One of the things that makes a trader successful is to get out of costing trades quickly to minimize costs and to let the profitable trades run. You don't even have to be right most of the time if you do this. You could feasible be right ONLY 30-40% of the time and still be highly profitable.

I continue to hone my skills at determining whether I'm at Support or Resistance. The market tells me. Am I sharp enough to notice and execute properly? Learning and getting there.
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