Trade The Journey

Trade The Journey

Technical Anaylsis: It’s not just charts and bars.

When you first enter the market, the first thing you see is the charts. Depending on your preference for charts, the price bars come in many forms. My preference is candlestick bars. But what do those charts mean?

Are those bars just the price moving up and down throughout the day? Or are those bars representative of people like you and me? Trying to get the best deal for the stock being auctioned.

Candlestick charts help me visualize what is happening with the price of the stock. The sentiment towards the stock as well using the volume. If you have the opportunity I’d advise you to watch the stocks price movement before investing. Some stocks are volatile, some aren’t. Some are fast risers, others are sinking ships and some have found their sweet spot.

Technical Analysis didn’t interest me at first. I, like most, had heard of Warren Buffett’s way of evaluating stocks and I determined that was the best way. The only problem is that what you hear on the news and youtube videos is 10% of the story.

There’s often a bit of work involved in discovering some of the secrets of the greats. Mr. Buffett may not directly advertise his knowledge of technical analysis but he did study it in-depth at one time. So that means he knows what he is doing.

Which also means that a master trader will never truly share his edge. Because if everyone knew it, it wouldn’t be an edge. When I first began learning about technical analysis I studied the patterns. They patterns have interesting names like ascending triangles and head & shoulders. Each pattern you hope provides a indication of the market’s potential direction.

Although the books are quite helpful. Most books on technical analysis barely scratch the surface in describing what technical analysis truly is. Its a graphic representation of the battle between supply and demand. Using the patterns only assist in trying to understand what is truly going on in the price.

In my journey, I have found that the information truly worth knowing comes with a little digging. By digging I mean learning bits and pieces until you have enough to grasp what you’re learning. When you grasp what your learning, a website that seemed like a foreign language a month before becomes crystal clear.

One website I have found to be helpful is . This website and blog has helped me to better understand technical analysis through its course. The course is free.

The course does come with a price: your time. The course is detailed and requires a commitment to complete. For the past two months, I’ve been watching videos and doing the homework. I didn’t really notice the change until I begin paper trading.

I was seeing some of the patterns form before my eyes. Armed with the knowledge of fundamental analysis, I can see why technical analysis is important. It represents the people and emotions behind the price changes. The strength of the price changes and much more.

Technical Analysis is a difficult art to master.

It’s almost like trying to predict the direction of a crowd that has only left you clues to go on. Clues that require understanding to discern and foresight to solve. No easy task.

The most important lesson I have learned is that there are no certainties. The charts, bars, patterns, and indicators are only clues. Developing your edge will require you to develop your own set of tools you can use to decipher clues.

“There are many ways of making money in the market. The hardest way to find is your own.”


As I learn more, I share more. Thoughts? Corrections?

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