[younger]

What would you seasoned pros recommend as the best way to learn technical analysis?

Can you recommend an online source for free (and fee based) technical analysis? Something that recommends entry & exit points.

Thanks in advance for your anticipated responses.

 

[osc]

My experience is that using technical analysis is gambling with lot of work (if you do it manually) and less pleasure. So I would recommend to not learn it.

If you insist on learning it, check Amazon top books for technical analysis. Some of those books recommend a few strategies that are testable. Test those strategies with stock data post book publication date and compare with S&P 500 index return. Consider to apply only those strategies that return significantly more than the index return (10-12% more). Ignore any strategy that is not testable.

 

[moneymusing]

I do use technical analysis that I've learned mostly through books from the library. There are plenty of online places to go and starting out at investopedia isn't all that bad of a spot.

Everyone certainly does have their own opinion about technical analysis, and it is most definitely an active trading approach so it doesn't appeal to buy and hold investors. I personally don't get into too much detail when I'm looking at charts. Just trying to identify support and resistance levels, divergent moving averages, and a momentum indicator (usually RSI).

There's also the Canadian Society of Technical Analysts (http://www.csta.org/) That has a library of resources, although I'm not a member. Not a bad price though at $125/year

 

[FrugalTrader]

If you are just starting out, www.stockcharts.com has some free lessons on the basics.

 

[Ben]

I know nothing about technical analysis, but it seems hokey to me.

It doesn't make sense to apply equations and patterns to a stock price, when the stock price is governed largely by human emotion and what people are willing to pay. Can you really model human behaviour like that?

I like osc's line "...using technical analysis is gambling with lot of work (if you do it manually) and less pleasure."

 

[moneymusing]

It doesn't make sense to apply equations and patterns to a stock price, when the stock price is governed largely by human emotion and what people are willing to pay. Can you really model human behaviour like that?

This is actually an argument that supports the notion of resistance and support levels. Many people buy and sell at psychological price points. Usually round numbers where people think a stock is too cheap (therefore supporting the price) or selling a stock because its gotten too expensive (resistance). Using a chart is an easy and effective way to judge these levels

 

[scomac]

This is actually an argument that supports the notion of resistance and support levels.

Agreed. There are two parts to the price of each and every publicly traded security; the fundamental value and what the market thinks that value is worth today. You can arrive at fundamental value through use of price ratios, discounted cash flows and other means of fundamental analysis, but the only way that I am aware of that attempts to gauge the mood of the market is through technical analysis.

There are lots of time honoured investing maxims that hint at the need to appraise the market's mood. "Don't get in the way of a freight train" and "The market can stay irrational longer than any individual can remain solvent" are just two examples of the importance of factoring in behavior to your investing decisions.

 

[younger]

Thanks For Responses So Far EOM

Eom

 

[humble_pie]

i'm still a relative beginner learning about tech analysis, but i never trade anything, not even an option, before running the instrument or its underlying through a series of advanced charts w saved settings & also through a 2nd, somewhat different charting service. The 2 sometimes conflict esp short-term. I pay special attention to stochastics, also bollinger bands, macd, rsi, mvng avg crossovers. Also check insider trading, news, financials, analysts' commentaries, short interest, in some cases even more. Ouf. Can get burdensome. In the end all boils down to your own decision.

for US stocks: finviz.com

for canadian stocks: several online brokers have interactive charting capability on their websites. Some are much more elaborate than others. Most also have a help pdf document. In my experience these are pretty good. Investopedia also has decent explanations.

 

[leslie]

The different confirmation metrics are listed at charting sites. But the discussion on how to use them is essentially non-existant. E.g. some are good for trending markets, other are good for range-bound markets. Some can be charted themselves, others are used as confirmation/divergents of the stock price. Etc. The library is the place to go (Dewey 332.63).
http://members.shaw.ca/retailinvestor/technical.html
http://stockcharts.com/school/doku.php?id=chart_school
http://bigcharts.marketwatch.com/help/quickchart.asp?symb=ge&sid=0&o_symb=ge&x=23&y=13
http://www.iqchart.com/101/tech.asp

 

[moneymusing]

Great resources leslie. I often use stockcharts for their very easy to use annotations on their charts.

 

[RockStar]

What about using something like VectorVest or Muathe.com or one of the myriad of other analytical sites that are available to help with the decision making process?

Do they really help or are they just 'hokum'?