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Tracking Stock Quotes to Buy and Sell Stocks

Submitted by Mike Swanson on Mon, 2011-08-01 11:59.

There are many experts and stock trading books telling you how to pick stocks. You can turn on the TV and you are going to get a stock recommendation if you watch financial news. But most people never tell you when to buy or sell.

That is where technical analysis can come in. Technical analysis cannot tell you if a stock is cheap or expensive based on fundamentals, but it can tell you when you should buy and sell, which is just as important. Technical analysis is all about using price action to time your entry and exit points.

There are three key things you need to know when it comes to charts and technical analysis. First you must understand that the price of a stock is already factoring in the future. A stock is high because people think the future is good and low when they think it is bad. So if you want to make money based on that you are trying to outsmart the entire world.

The second principle is that prices move in trends. There are predictable trends that repeat over and over again that you can take advantage of. The trader's mantra is "the trend is your friend."

The third principle is that history repeats itself. Traders and investors will react in the same way to the same conditions of the past, because the psychological motivations that drive them never change. This enables you to profit from patterns that repeat themselves in the stock market.

The key is to distinguish important trends from meaningless short-term fluctuations in the stock market. That is why you want to combine some sort of fundamental analysis with technical analysis. You want to use price charts as a tool.

This requires a degree of skill, judgment, and interpretation. Mechanical trading systems attempt to do away with subjectivity by basing investment decisions on mathematical indicators calculated with the variables of price and volume.

There are many books worth reading when it comes to stock trading and technical analysis. There are also some good trading courses out there. The world is at your finger tips if you just start to educate yourself.

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Hello. My name is Mike Swanson. I’m the best-selling author of the book Strategic Stock Trading. In a former life I used to run a hedge fund from 2003 to 2006 that generated a return of over 78% during that time frame. In fact it was ranked in the top 35 out of 5,000 hedge funds in 2005.

After I retired from the hedge fund world I setup this website and blog. If you sign up for my free weekly email list below I’ll send you an update on average about once a week on my views of the current stock market trends and share with you actionable investment ideas.

Now I cannot promise you that every stock I find will go up in value. I can’t promise you endless 100% returns as others claim they do and as all the disclaimers say past performance does not necessarily predict future performance and you can lose all of your money in the stock market.

This is reality.

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