Replies to post #10290 on Simple's Green Room

[friniteshopper]

So in laymans terms: If a stock is above the Moving Average, then it should bounce off the MA(Support area). If it is below the MA, then it will bounce back down when it hits the MA (Resistance Area). If it breaks through the support, then it will trend down, then it will be under the resistance. If it breaks through the resistance, then it will trend up over the support. How does that sound? Thanks

[wickw50]

Simple, btw, just what you want to hear..and this is before..

Posted by: wickw50
In reply to: None Date:9/22/2007 4:38:11 PM
Post #of 260493

Trading 101.1: Stock charts. Although some think that stock charts are some kind of mystic mumbo-jumbo, they truly have a place in trading. Some even contend now that if you are trading on the NASDAQ, that a good working knowledge of TA (Technical Analysis or stock charts) is essential. Some think that charts are not as reliable when applied to the OTC, but I think they are just as useful on the OTC...only a greater knowledge and understanding of tools is required to use them.
Just a small understanding can be very useful, and help you to know where the direction the pps is going and to what %. You might ask, "Why do I need to use charts if I can read the mm's?" It is because the mm's use charts, and with just a couple of the tools you can understand why the mm's do what they do.
Although I won't go into them, here are a few terms with which you need to become familiar.
Time Range....sounds simple, but some ranges are better based on the frequency that you trade.
Bolinger Bands...these are good indicators of how far the mm's are willing to move a stock before starting a retracement.
Moving Averages...these are good indicators of investor sentiment and direction...
Just those three will get you along pretty good. As you come to appreciate TA more you will probably learn to appreciate Williams %, Money Flow, Stochastic, Sars and a few more. A good place to learn about these terms: http://stockcharts.com/school/doku.php?id=chart_school
A good place to see these terms in action daily: http://investorshub.advfn.com/boards/board.asp?board_id=7882

Do not be afraid of charts and do not think that you can't understand them. Even the basic terms will help you in understanding why you should buy at a certain price and why you should sell at a certain price.

Next time we will discuss the hands on part of trading. The questions you have asked yourself many times, "What should I do and how much?"