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Analysis method assessment, How to rate them?
ontiK
post Posted: Apr 14 2006, 11:07 PM
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Posts: 2



Thanks for the replies all and sundry. It's much appreciated.

I'm obviously at a very early stage in my trading career but I've picked up on something that made a lot of sense recently (although I'm yet to test the idea).

It has been suggested that when assessing a stock, that you look at the historical charts, and apply a variety of your preferred patterns. The idea here is to look for patterns that have been the most indicative historically and apply those to assist you read whether or not the stock is heading in a direction you can work with. IE let the pattern demonstrate it's worth before you consider it worthy.

Once understanding this point, it made me realise how naff my initial question was. weirdsmiley.gif

From here the next tests are;

-Apply this rule to identify potential entries
-Check the industry sector index for happiness
-Analyse for any divergence using MCAD & RSI to see if the patterns have not highlighted weaknesses in the trend.
-Check that Volume is inline with the picture painted
-Make sure the stocks is comfortably liquid
-Implement Risk & MM strategies to identify position
-If all's happy, commit!

I'm still paper trading but ya' know cool.gif For now I'm just focusing on stocks and my methods are crude but I see how I can make them effective. Once I understand stocks, then I'll start investigating other instuments. Thanks again.


ontiK.

 
motorway
post Posted: Apr 13 2006, 11:38 AM
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Thanks: 14


In reply to: crystal on Thursday 13/04/06 08:29am

Think about what indicators are derived from..

The historical price and Volume data..

So in many cases they are very lagging and need to be optimised ( but to what ? the past ? eg What moving average lengths .. the ones that will work best tomorrow !! )

The are all fine if they help you see something clearer.. But there is nothing in them that is not in the chart itself...

So start with a chart and a trendline... A price series and a trendline is very powerful..

Then you can visually see... trend..reversal..momentum support resistance accumulation distribution activity etc

When you can judge everything from the chart itself.. then you will understand what indicators are trying to do and what use they might be for you...And be able to ignore the many false signals.. eg RSI overbought signals in a strong up trend

Volume analysis can probably more benefit from the use of accumulation distribution OBV etc
because they are not really indicators like price indicators are. But more a form of a chart of volume .. Which can be compared to the price chart for convergence and divergence.





motorway

 
RobAde
post Posted: Apr 13 2006, 08:32 AM
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QUOTE (crystal @ Wednesday 12/04/06 02:29pm)

I use 200 day MA, and I also like William %R (google Williams %R for a better explanation than what I could write). I also like candles as well

You really have to find what works for you, but I would recommend understanding market depth before going into analysis as Market Depth can help you with your entry/exit timings etc.

 
crystal
post Posted: Apr 13 2006, 08:29 AM
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HI ontick

for me any how,trendlines ,support and resistance and a couple of moving averages

and candles ,do the job ,all the otherr stuff seems to be just a rehash of what the chart

is saying

good luck


mick

ps ZAITECH has made a good post on trading recently ,click onto his name and recent posts and you should find it

 
ontiK
post Posted: Apr 13 2006, 08:21 AM
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G'day Stockies

Just wondering if there is any way that we can determine the reliability of an indicator? Or maybe a collection of indicators? Please excuse my noob status but as I'm starting out, I'm considering all these indicators that I'm learning about and wondering which ones, if any, I should focus on.

For the moment I'm working my way up from those I find easiest to grasp and then letting the more difficult ones sink in over time. Are there any that stand out as being the most reliable? Or does this come down to what works best for each individual trader?

I'm expecting the response to be varied, but is there any widely accepted thinking about what a sound analysis toolset consists of?


Cheers,
ontiK

 
 



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