Ten lessons from my book “The Ultimate Guide to Technical Analysis”
A Thread 🧵 👇
A Thread 🧵 👇
“Technical analysis is the trading of price action, while fundamental analysis is the trading of value. These are vastly different things.”
“Technical analysis focuses only on price action & volume. The best use of TA is not the prediction of future price. It should be used to identify the path of least resistance, quantify the probabilities of what will happen next & identify a price of entry for a good R/R ratio.”
“Fundamentals can tell you what to buy and technical analysis can tell you when to buy and sell it.”
Fundamentals = Current and future value.
Price = Current buying and selling reality.
Fundamentals = Current and future value.
Price = Current buying and selling reality.
“Technical Analysis alone is meaningless outside the parameters of a complete trading system. A trader needs proper position sizing, a trading watchlist, a strategy with an edge and the discipline and perseverance to stick to their trading rules.”
“An area of supply is a price zone where many traders and investors are holding a stock and willing to sell it and exit their position. Overhead resistance is created when people sell to lock in their gains at their profit target levels.”
“Support and resistance levels are not an exact price to watch, rather it’s a zone of prices. The longer a chart trades in a price range the more valid the areas become. Also, the longer the price range the more powerful the eventual breakout can be.”
A breakaway gap is one of the biggest momentum signals indicating the beginning of a new trend or continuation of a trend already taking place. This move must happen as a breakout of a trading range to be valid, & a break to all-time highs or all-time lows is the strongest signal
“A gap in price that doesn’t get filled in the first hour of the trading day tends to keep going in the direction of the gap, most of the time for the remainder of the day.”
“Discipline is what makes it possible for a trader to allow their edge to play out over time and lead to profitability.”
Book link: amzn.to/3sPO2Ob
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