Eat, Sleep, Trade
Technical Analysis Through Charts
Stock Trading Basics
Now that we have established a basic understanding of technical analysis and candlestick charts we can begin to look at stock trading basics. The most important thing for new traders to realize is that trading is not about winning. while winning can be very rewarding, the reality is that losing is much more common, especially for new traders. Losing is a part of trading and the quicker you can learn to accept and take a loss the better chance you have of survival. Trading is not about how much money you make but more about how much money you don't lose.
Position Size & Risk Management
The most important aspect of trading that new traders constantly over look is risk management. If you do not provide yourself with a cap on the amount of capital that you are willing to lose per trade, you have already set yourself up for failure. Position sizing goes hand in hand with risk management and most traders start firing off buys and sells without ever even thinking about these two very important aspects. The stock market thrives on the unprepared and has no remorse for anyone. Entering a trade without a set risk will ultimately end with a trader losing a lot more than they expected, if not everything.
Lets dig deeper into Position Sizing and Risk Management.
Identifying Market Trend & Drawing Trend Lines:
It is extremely important to be trading with the Market Trend. Every trader that goes up against the market is at a disadvantage and we need to put the odds in our favor as much as possible. You shouldn't need to force a trade or feel stressed during a trade not knowing which way the market will most likely continue. Identifying and drawing trends doesn't need to be difficult and we are gonna break it down for you.
Lets look into how we identify the direction of the current market trend.
It's simple to draw trend lines so don't over complicate it. Want to learn for yourself?
Learn how we spot and confirm a trend reversal when it occurs.
Support & Resistance
Support and resistance are the keys to finding break out stocks. Once a major support or resistance area is broken with good volume, it shows significant strength in that direction. This can be applied for a stock that is going either up or down. These breakouts can be used to find entry points, set a stop loss, or confirm momentum in a trade your already in.
Lets take a closer look at how we use support and resistance.
There are 100's of indicators that you can use to assist you while analyzing a chart. The indicators that you use will greatly depend on your trading style. In this lesson video we cover a few Indicators that you can use including; Volume, Moving Averages, RSI, and MACD.
Learn more about Volume, Moving Averages, RSI, and MACD.