John J.Murphy – Ten Laws of Technical Trading (Article)

Only registered users can download.

Please LOGIN/REGISTER

 

Ten Laws of Technical Trading (Article)

Sale Page : amazon.com

This product is available

Get John J.Murphy – Ten Laws of Technical Trading (Article) now.

The following are John’s ten most important rules of technical trading:

Map the Trends
Spot the Trend and Go With It
Find the Low and High of It
Know How Far to Backtrack
Draw the Line
Follow That Average
Learn the Turns
Know the Warning Signs
Trend or Not a Trend?
Know the Confirming Signs
1. Map the Trends
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you’re trading in the same direction as the intermediate- and longer-term trends.

2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes – long-term, intermediate-term and short-term. First, determine which one you’re going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you’re trading the intermediate trend, use daily and weekly charts. If you’re day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.

3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old “high” becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies – the old “low” can become the new “high.”

About the Author

John J. Murphy is an American financial market analyst, and is considered the father of inter-market technical analysis. He has authored several books including Technical Analysis of the Futures Markets. He later revised and broadened this book into Technical Analysis of the Financial Markets.