The Best Way To Learn Technical Analysis And Swing Trading

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I participated in a trading webinar this past weekend where I demonstrated a few strategies to about 1, traders. The basics of technical analysis geeks question I got asked the most over and over by at least 20 participants was to provide my favorite indicator for trading technical analysis strategies. My explanation was rather simple; the best indicator is the one that fits the type of market environment that you are currently trading.

After the seminar ended I was asked one last time a slightly different question. My answer was quick and fast, it would be the 20 day exponential moving average. The exponential moving average is a variation of a simple moving average. Before computers were widely used for market analysis, traders relied on simple moving average indicators because they were easy and simple to calculate. To calculate a day simple moving average, simply add the closing prices of the basics of technical analysis geeks last 10 days and divide by The day moving average is calculated by adding the basics of technical analysis geeks closing prices over a day period and divide by 20, and so on.

As traders began using computers in the early seventies, they wanted to find ways to make improvement to the moving average, more specifically they wanted to find a way to create less lag between the market they were analyzing and the indicator. The simple moving average was just not fast enough to react to volatile market swings. Traders wanted an indicator that was similar to a simple moving average but would put more weight on recent price action and less on past price action.

You can see in this example how the simple moving average reacts much slower to price action than the exponential moving average. This is the primary reason why most short term traders and day traders use the exponential the basics of technical analysis geeks average instead of the simple one. Take a look at another example of how the exponential moving average is quicker to react when trading technical analysis trends.

In this you can see how much faster the exponential moving average reacts to the stock turning back up. The simple moving average barely moves while the stock is gaining substantial momentum upwards.

Since the exponential moving average is very dynamic and responds well to recent price changes, I tend to use it to trade pullback or retracement strategies. The first thing you need to do is to adjust the exponential moving average to 20 days.

The 20 day is a good starting point for most volatile stocks, futures and currency markets. If you are day trading, use 20 bars instead of 20 days. The further the price is away from the average the better. You can see in this example how far the stock is trading above the moving average. This is a great filter for finding stocks or other markets that are trending strongly.

The next step is to monitor the stock or market the basics of technical analysis geeks are trading and wait for the market to trade completely below the 20 day EMA. This example shows you exactly what I mean. You want to make sure that the high is not touching the EMA and is trading completely below it. The next step after the stock or other market you are trading drops completely below the 20 day EMA is to wait for the market to trade once again completely above the 20 Day EMA.

You can see how the stock only dropped for a few days prior to resuming the strong trend, this is a good sign. If the stock was to stay below the average for more than one week I would probably be a bit concerned about continued momentum. Here is how the entire pattern looks like on one continues chart. You can get a good feel for how the 20 day EMA filters strong trending markets and more importantly, how it identifies pullbacks away from the main trend.

During the last two days I presented basic techniques for beginners who want to learn technical analysis trading strategies. The The basics of technical analysis geeks proved much more responsive to short term price fluctuations and demonstrated better response to momentum and volatility. And if you are a day trader, you can change the bars from daily to 5 minute and apply this method to E-mini Futures Contracts as well.

This gives me a good time frame and makes the EMA more responsive to short term market swings. You can experiment with different settings but I suggest you start off with the 20 day. The basic principle is to use the EMA to measure pullbacks away from the trend.

The next step is to wait for the stock to trade completely below the EMA for 5 days or less. If the stock trades below the EMA for more than 5 trading days the trade is nullified and if the stock trades completely above the EMA within the 5 trading days you would enter a buy stop order above the first bar that trades completely above the EMA.

My advice is to place your stop at the EMA level immediately between the last bar that traded completely below the EMA and the first bar that traded completely above the EMA. This may sound a bit confusing so take a look at this example for clarification. You want to make sure and place your profit target at a level that provides you with the basics of technical analysis geeks solid risk to reward level.

Most professional traders use a profit to risk ratio of two to four. This means for every dollar you risk you should profit anywhere from two to four dollars. A good tip is to always plan your exits based on the characteristics of your entry method.

I use a simple two to one risk level with this strategy. I want to see very strong momentum coming into the market as quickly as possible after I enter my order. I simply measure the distance between my entry price and the stop loss level and multiply that number by two. I then add that amount to my entry price and that becomes my profit target for the trade.

This ratio offers me a reasonable risk to reward ratio and provides me with an opportunity to take quick profits from the increase in volatility before the momentum dries up once again. In this final example you can see exactly where the entry and the protective stop loss level are placed. Since we are selling short we would subtract our risk level from our entry and that would provide us with our profit target.

We would multiply that number twice and subtract it from the basics of technical analysis geeks entry price. Always remember that pure momentum strategies that are based on volatility have lower profit to loss ratio than other technical trading methods.

Also remember that the 20 bar EMA can be adapted to any market and time frame. Market Geeks, LLC was founded in by a group of professional traders led by Roger Scott, a professional trader and a successful entrepreneur with over 20 years of experience in the financial markets industry.

After a few weeks of following the stock market over his friends shoulder, Roger knew that he found his true passion in life. This is how it all began 10 years ago, the basics of technical analysis geeks today Market Geeks, LLC is widely known for providing traders around the world with the very best in short term trading and day trading. We strive to become the finest trading education resource in the world, with the highest level of customer satisfaction. The Moving Average Indicator My answer was quick and fast, it would be the 20 day exponential moving average.

You Can See the Entire Process On This Chart During the last two days I presented basic techniques for beginners who want the basics of technical analysis geeks learn technical analysis trading strategies. About Roger Scott Market Geeks, LLC was founded in by a group of professional traders led by Roger Scott, a professional trader and a successful entrepreneur with over 20 years of experience in the financial markets industry.

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What am I doing wrong? Afternoon, This morning I tried my hand at trading. I have traded before but didnt find it worthwhile and gave up.

When I first dabbled with it I came up with the following rules: Target profit is 1. Slow and seady wins the race 2. Identify only 1 horse per race. No need to run before i can walk 3.

Study the market and Use the graphs to identify a specific patern in a horses prices before entering a trade 4. Back with a view to lay only to begin with to limit liabilities 5. Exit point is 3 ticks difference to entry point. Even if that means a small loss- its better than losing my whole stake 6. Exit 60 seconds before the off no matter what. After watching a few videos and reading some sources I have added to the above with following: Now, after putting that in to practice I am having an absolute mare: Every trade i seem to make goes against me.

I am watching the graphs of all participants looking for any movements, Im looking at oddschecker for any movement in prices from the bookmakers. Can anybody give me any advice on how i can improve? The best advice I can give you is, understand the markets and read about technical analysis. Or scalping takes place in a short time so the main trend has less sense? Ill put another question out there, what are other successful trders: Sadly, I don't think the successful guys are going to give their strategies to us.

Of course it helps knowing about technical analysis for scalping. Ive obviously been doing something wrong, has anybody got any links to any material on the net or posts on forums that they found helped them? Search for adam heathcote, jack birkhead and sam wilson. Some of the stuff they say might be helpful for you. I'd say take it slow, be patient, learn the basics, keep reading blogs and information about stock trading and technical analysis. Some of the stuff applies to betfair horse-racing trading, and other markets.

Also read the posts for newbies here on the forum. I was in the same spot you are now in january last year. It was all new to me, I spent a month eating every bit of information, even thought about studying economics just to understand price flow better: Of course you don't need to study economics, just need to be very smart and be able to understand complicated things. Video's section of the forum has lots to look at, if your not sure keep the stakes small for the moment Start off not by trying to win but to keep your losses as small as possible.

Condition your mind to accept a one or two tic loss and scratch trades quickly if the market is not moving the way you deduced. If after a month you are making a profit, not fooling yourself because you've let a few go in play and have got lucky, from pre race trading you should have picked up on movements that repeat themselves and if you've got into a strict habit of accepting losses quickly you should be feeling confident of moving forward. You may be trying to do too much. Switch the additional graphs off and concentrate on the ladder.

Like Chuck has said, look at the markets until you are sick of seeing them, and , then, look at them some more. Small stakes and take losses early as said immediately above this post. D Sadly, I don't think the successful guys are going to give their strategies to us. Learning to trade in January is not a good idea.

The races are crummy quality usually , and there is little real punter money about. Try restricting yourself to Saturdays racing card and see if it improves for you. Spend a few months watching and learning the markets before you give yourself a strategy to implement.

Don't have a target profit. Your target for the day should be to trade to the best of your ability and make good decisions. Don't pressure yourself into making money in such a short time frame, trading is one long session, from your first trade, to your last, not a race to race day to day proposition. Some days you will make lots, some days you won't, some days you will lose. Can't disagree with that. Watch a few, identify the best one that fits in with what you want.

But then, after you trade out, keep looking if another fits better now. Depends on how you wish to go. Do they really show what is about to happen? Certainly watch what is happening, but the most important thing that is happening, is where is the money being matched right now. Use liability mode and your liability is the same.

In fact, the higher the odds, the lower your liability using this staking. It is the best for staking as you are always trading to the exact same level. Obviously not as important if you are taking 1 tick, but if you are going multiple, certainly the best indicator. Also, if you want liability, this will do this regardless of the odds. Layers liability, only way I trade.

You need to study for your entry point. Exit point should be no different. You should be constantly analysing the market. If the market goes against you 3 ticks and you still think it is going to go up, then why trade out for a loss?

Your exit point should be an evaluation of what is happening at that time. If you can't be trusted or think that quick, then sure, have a set rule. But every trade is different. Well, what happens if a race is delayed?

Is any UK race ever actually on time? You should have pictures, and stop when you think the race is a certain time from jump. These are merely my opinions, not suggestions on how to make money.

Spend a few months watching and learning the markets before you give yourself a strategy to implement Along this process, I would add get yourself a 1TB extra drive record get CamStudio or something like that on it everything you watch.

You'll have the benefit to be able to walk away for a few mins, stretch yourself, go pee, drink some water, refill the tea cup, etc. Save it in a Word or Excel file, whatever.

Start to work out strategies according to what you see, you'll have the advantage of slow motion, rewind, see the stuff again, etc. Keep track of some paper trading but do not rely on it! As sessions go by see if you can make any use of some charting mumbo jumbo. I'd suggest to start to use plenty of them, up to sickness, and then skim out what you don't feel is gonna help you. Try different set ups and time frame until you find what suits you best If you really can't help the itch And remember that what works smoothly with a 2 quid stake won't go as easily with my 2 cents.

Brilliant read it somewhere. Well, the only difference I have with most of these guys, is that I guess I am more adverse to risk. I really don't understand the point of getting out at 1 tick every time. I mean, the market is noise. If the market moves your direction you are guaranteed to lock in your 1 tick profit, if it goes against you, you aren't guaranteed to get out at a 1 tick loss, often it will go straight through. Given that the market is noise, if you identify something as going up, then why get off before you identify it as stopping or turning?

In saying all this, I predominantly trade gappy markets, so the tight high volume markets aren't really what I concentrate on, but I believe in the theory of what I am saying They could go further right hand wise and downwards, but that's not the point. If you take those 2 figures it would appear that one can profit even from noise Here's an example of a note sheet i use: Thought i'd do a neat one, just for y'all.

It's just an example, modify to whatever works for you. I found this whilst searching through some of the other threads. Failing that, has anybody got any suggestions on how to make a sheet like the one above? A link to other post: Hi Chuck each table is set to to a different amount of ticks' profit see the top wide header: They become meaningful if one is able to state what one's figures are on average. Then if your ticks again on average of gain are 3 or more you're doing fine: