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How trade using Technical Analysis Safely

While I was searching for the key elements I found some useful tips provided by Steve Warshaw...They are as follows:- Quiet useful..
1. A weekly / daily routine for analyzing the overall market trend
2. Details for creating, testing, implementing, and refining screens / other methods of identifying possible trades
3. Guidelines for opening new trades
4. Guidelines for monitoring your trades
5. Open, hold, and closing guidelines
6. Rules for updating / refining the overall strategy

welcome no problem =)

Thanks for the explaination. Appreciated .

calculus1985 ( Date: 06-Dec-2010 17:47) Posted:

If i am not wrong, William % and Stochastic is about the same. But the calculation is slightly different. One of them is use Highest High, the other is use Lowest Low of the closing price over "n" period. Stochastic Oscillator also appears to be more "smooth" than William %R but you can william %R by taking the EMA or SMA of William %R. Both of them is an oscillator indicator. Mainly used for detecting of reversal.

ADX, i hardly use but from what i know (correct me if i m wrong), it is for detecting the strength of the current trend. < certain threshold (e.g. 20) it is weak trend. > (e.g. 40) it is strong trend. The trend can be bullish or bearish. It is better if divergence appears in the signal.

OBV is use to confirm the current trend. If price rise, OBV rise too => bullish. if price drop OBV rise => Positive Divergence(bullish). If price drop, OBV fall => bearish. If price rise, OBV drop => -ve divergence (bearish)

Read my detail explanation on OBV here

by the way, i do not know alot... also still learning. I documented most of the thing i learn in my website. I try to write summarize and write them in a concise manner. Cut away the grandma and grandpa story, straight to the point and share with everyone. Hopefully can help people to learn too =)

haha sadly none, i am a computer engineer working in engineering sector =P... i pick up my financial knowledge by self reading from those finance Reference text, lecture notes and investment books.

epliew ( Date: 06-Dec-2010 17:48) Posted:

for a 1985.... u seems to know alot.... is by training in school or finance sector ?

calculus1985 ( Date: 06-Dec-2010 17:47) Posted:

If i am not wrong, William % and Stochastic is about the same. But the calculation is slightly different. One of them is use Highest High, the other is use Lowest Low of the closing price over "n" period. Stochastic Oscillator also appears to be more "smooth" than William %R but you can william %R by taking the EMA or SMA of William %R. Both of them is an oscillator indicator. Mainly used for detecting of reversal.

ADX, i hardly use but from what i know (correct me if i m wrong), it is for detecting the strength of the current trend. < certain threshold (e.g. 20) it is weak trend. > (e.g. 40) it is strong trend. The trend can be bullish or bearish. It is better if divergence appears in the signal.

OBV is use to confirm the current trend. If price rise, OBV rise too => bullish. if price drop OBV rise => Positive Divergence(bullish). If price drop, OBV fall => bearish. If price rise, OBV drop => -ve divergence (bearish)

Read my detail explanation on OBV here

for a 1985.... u seems to know alot.... is by training in school or finance sector ?

calculus1985 ( Date: 06-Dec-2010 17:47) Posted:

If i am not wrong, William % and Stochastic is about the same. But the calculation is slightly different. One of them is use Highest High, the other is use Lowest Low of the closing price over "n" period. Stochastic Oscillator also appears to be more "smooth" than William %R but you can william %R by taking the EMA or SMA of William %R. Both of them is an oscillator indicator. Mainly used for detecting of reversal.

ADX, i hardly use but from what i know (correct me if i m wrong), it is for detecting the strength of the current trend. < certain threshold (e.g. 20) it is weak trend. > (e.g. 40) it is strong trend. The trend can be bullish or bearish. It is better if divergence appears in the signal.

OBV is use to confirm the current trend. If price rise, OBV rise too => bullish. if price drop OBV rise => Positive Divergence(bullish). If price drop, OBV fall => bearish. If price rise, OBV drop => -ve divergence (bearish)

Read my detail explanation on OBV here

@ calculus1985

I'm a bit confused abt william % and stochastic % K indicator.

what is their difference?

btw, ADX and OBV can explain about too.

many many thanks

Wow..

If like this, it's very hard to become rich playing stocks!

       If they 'mau' (whack big), they may lose until jialat-jialat...

          If they don't 'mau', how are they to become rich?.

            Many want to become rich with stocks,

               they don't want to waste time making kachang-puteh.

                  They like to invest big-big, so they 'mau'... Smiley

one more thing to add for trader/investor

if after calculation, you realize the trade volume is too small (couldn't buy due to small volume) or the profit is not attractive enough. Don't try to increase your risk capital. It is better to pass that trade. Money opportunity is presented everyday. There is no such thing as you miss this opportunity then you will not be rich. yes, you might feel abit regretted that you nv increase the size if the trade turn out to be good. But imagine if you predict wrongly, you will lose more!

It always take more effort to win back what you have lost. To stay in this market long enough and continue to win, you cannot risk a large capital (unless u got too much money to burn?)

iPunter ( Date: 05-Dec-2010 10:22) Posted:

You are so right...

Whether one is a trader or investor,

it is of utmost importance to first determine how much one can afford to lose.

This is because in the stock market, profit is not the rule, but the exception.

If this were not so, we would not have seen so many people distressed

and also committed suicide. too. And many of them had seriously intended

to be investors in the beginning too. This is why people say-

"Don't 'main-main' (treat lightly) with shares".

calculus1985 ( Date: 04-Dec-2010 10:25) Posted:

Trading is not just about using the technical indicator. It is not about how much you can win at one go. It is about how discipline you are. Follow the set of rules that you determine. Your trade volume is not anyhow determined. Your trade volume should always be related to the amount that you willingly to risk.

read my Tutorial on Trading with Technical Analysis here

You are so right...

Whether one is a trader or investor,

it is of utmost importance to first determine how much one can afford to lose.

This is because in the stock market, profit is not the rule, but the exception.

If this were not so, we would not have seen so many people distressed

and also committed suicide. too. And many of them had seriously intended

to be investors in the beginning too. This is why people say-

"Don't 'main-main' (treat lightly) with shares".

calculus1985 ( Date: 04-Dec-2010 10:25) Posted:

Trading is not just about using the technical indicator. It is not about how much you can win at one go. It is about how discipline you are. Follow the set of rules that you determine. Your trade volume is not anyhow determined. Your trade volume should always be related to the amount that you willingly to risk.

read my Tutorial on Trading with Technical Analysis here

I do not trade but I invest!

calculus1985 ( Date: 04-Dec-2010 10:25) Posted:

Trading is not just about using the technical indicator. It is not about how much you can win at one go. It is about how discipline you are. Follow the set of rules that you determine. Your trade volume is not anyhow determined. Your trade volume should always be related to the amount that you willingly to risk.

read my Tutorial on Trading with Technical Analysis here

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How trade using Technical Analysis Safely