resources to learn technical analysis ?

[hooligan]

Hey guys.

I've waded in the waters of trying to learn TA a few times but it never quite stuck. I like the way that Sol seems to get "creative" with it and "tries out" different indicators, seeking hidden predictive power in unpopular places as the wheel of the market turns, to get an edge.

That's all very cool, and I'd love to be able to do that, but I don't even understand the basics. What even makes an indicator useful?

Anyone have a solid resource to learn?

Things I want to understand: MACD's, "demand zones", "oversold", "overbought". How to incorperate any old random indicator one may discover. Bearish and bullish candle patterns. Any of the TI propietary combo-indicators. I understand none of this.

Things I kinda sorta understand: Volume, Price, VWAP , SMA.

Appreciate anything anyone can offer.

[AstuteShift]

Well I find the best way really is to read then apply it, whether it’s real trading or to paper trade

You can purchase books or search PDFs on pdf drive

First things first. Read all the mass psychology books that SOL recommends. Stock Operator, Aesop Fables are essential. TA eventually will die and MP will be the only thing that will give you a big edge now and later on.

However, if you want to persist then here are resources I use.

For chart patterns, Charles Bukowski encyclopedia, his latest book is excellent. It’s full of data and statistics on which ones work the best in bull or bear markets. Excellent resource

Another classic imho is Technical Analysis of Stock Trends by Robert D edwards. Trend analysis is extremely important

The Handbook of Technical Analysis By Mark Andrew Lim is also a good resource on all indicators and styles of trading.

Now with chart patterns there is also another way to trade using such things called harmonic trading. It uses Fibonacci and it’s pretty advanced. The best technician imho who uses this is a guy called Scott Carney. He has three books and resources which are free from his website if you want to go down this rabbit hole

The goal here is to find a system that you like with also a good emphasis of MP in it. Customize your tools.

My suggestion is to keep it simple and that Rome was not built in a day. TA is not the holy grail but does give you clues in top and bottom formations.

Mass psychology is the only thing that should be number 1. That requires observing the sentiment of the market, the stock, investors in the stock, insiders who are in it and also the crowds perception. This skill will only get better the more you apply it

[hooligan]

Well I find the best way really is to read then apply it, whether it’s real trading or to paper trade

Thanks for this detailed reply. Will pursue some of this.

MP I have a knack for, always did. That's why I'm here. One's mind for MP . . . . it involves a lot of right brain, a lot of right-left brain integration, a lot of Sense and sensitivity. This is my personal specialty. My knack. Many here share that I believe. Of course I'm always improving. But I am obsessed with improving in that area and always have been haha

I'm weak on the technical side, and it's harder for me to push myself to study it. I want to ground my MP sense and processing with solid technicals.

My first aspiration would be to understand the market updates pdfs more completely. As in understanding the fundamentals of Sol's TA style, since I already trust that it works, as I've seen the results for some time now.

[stefk]

I think the indicators that Sol uses are enough. Monthly MACDs crossings in the oversold territory are useful, this one combined with RSI is powerful. On the daily, I like to use the OBV, on balance volume. You can also learn to draw trend lines, its funny.

[hooligan]

I think the indicators that Sol uses are enough. Monthly MACDs crossings in the oversold territory are useful, this one combined with RSI is powerful. On the daily, I like to use the OBV, on balance volume. You can also learn to draw trend lines, its funny.

Thanks, will focus on these specifically for now.

I remember Sol saying he uses a sort of "edited" MACD.... wondering the details there.

This video just blew my mind. Ilustrates the "drama" in price action. Really helpful for me. More short term oriented but it applies to everything imo.

https://www.youtube.com/watch?v=B75Bzg1I9lA

[hooligan]

What are the indicators on the charts in the updates? There's the sort of "guide lines" on the actual candlestick chart, two blue and one grey in the middle.

Then there's the green wave below the chart, then the red/blue waves, which i think are a modified MACD.

Can anyone shed light?

edit: learned the green oscillator is RSI. still curious about the modified MACD and also the guide lines on the chart itself

[SOL]

What are the indicators on the charts in the updates? There's the sort of "guide lines" on the actual candlestick chart, two blue and one grey in the middle.

Then there's the green wave below the chart, then the red/blue waves, which i think are a modified MACD.

Can anyone shed light?

edit: learned the green oscillator is RSI. still curious about the modified MACD and also the guide lines on the chart itself

The green single line = modified RSI
Blue and Red lines = modified MACD's
The blue lines with grey band = Modified linear regression bands.

The idea as we have stated many times is to understand what oversold, extremely oversold and insanely oversold refers to and vice versa. Once you understand that you look for a host of indicators that help you spot those states and you pick those that resonate with you.

[Yodean]

The blue lines with grey band = Modified linear regression bands.

Hey Sol, from your perspective, any key advantages/disadvantages comparing linear regression bands vs. Keltner bands at default settings?

[SOL]

The blue lines with grey band = Modified linear regression bands.

Hey Sol, from your perspective, any key advantages/disadvantages comparing linear regression bands vs. Keltner bands at default settings?

You never know you might see something. Though I never use standard settings. The way I look at it, you have nothing to lose and everything to gain by experimenting.

[ultramartian]

I am also on my path to learning TA to help understand the fundamentals. Would @Sol or anyone else care to share the settings of those indicators in the charts in the updates, so that we can use the same settings i.e. MACD, RSI, etc., in our trading platform, to make more sense of what the update is talking about?

[AstuteShift]

I am also on my path to learning TA to help understand the fundamentals. Would @Sol or anyone else care to share the settings of those indicators in the charts in the updates, so that we can use the same settings i.e. MACD, RSI, etc., in our trading platform, to make more sense of what the update is talking about?

TA is useless if everyone uses the same settings, this is how the market works

Don’t bother to replicate SOLs charts but rather find indicators that suit you and customize them with mass psychology principles

[AstuteShift]

I’ve been testing and customizing all sorts of different indicators and tweaking. I have to say it’s pretty fun taking one indicator and converting it for your needs and to help you select a good pattern on charts.

Once you get those nice patterns and test them then you will be amazed at the results



As you can see, the patterns are pretty clear. Buy in oversold ranges and sell at the overbought zones.

Never ever ever use standard settings as that is what the masses do and they always lose since they don’t bother.

Have to thank SOL for those last updates, I was going to standard TA and learning old school methods but those don’t work anymore, it’s all about customize tools and MP

[Yodean]

I think when one is starting out and doing her own technical analysis (TA), it's totally fine to use default settings. As has been discussed previously, one key is to understand the differing degrees of an asset being overbought vs. oversold, as well as how to reconcile data on different time frames (i.e. daily, weekly, monthly) to form a tradable gestalt thesis. E.g. what to do if an asset is a bit overbought on the monthly charts, but somewhat oversold on the weekly charts, and really oversold on the daily charts? That sort of scenario. It's easier when all time frames point to the same direction.

The other potential advantage of using default settings is that one gets a rough idea of what the bulk of mainstream financial TA gurus are thinking, so this information could be helpful.

And when using default settings, they are still helpful if one compares the peaks and troughs of the indicators to the peaks and troughs of the asset's price. For example, if one uses standard settings, one still obtains pretty much the same information as the customized indicators of GBTC that YY posted above.

Although I consider myself a half-decent (perhaps half-assed is a better term) novice technical analyst, my strongest quality in TA is that I don't fall in love with my TA (or anyone else's, for that matter) too much, especially when it comes to volatile assets. I've seen the best TA gurus fail time and time again, especially when it matters the most (i.e. big drops or big upside parabolic moves).

Something similar has been said previously, but TA likely accounts for only 15% to 25% of a trader's success in the markets. Then the challenge is combining TA with accuracy in identifying the primary trends (i.e. bull vs. bear markets in a particular sector, etc.) and horde sentiment.

Finally, and I don't think enough ink has been given to this topic, but how to execute on a particular set-up? One could formulate a highly accurate TA on a particular asset, and align it well with a dominant trend and taken herd sentiment into consideration, but lacks the balls to enter or exit a given position in a significant manner. So heart and guts are arguably as important as brains.

I've known quite a few mediocre traders (by results) who are amazing at predicting price action over a given time frame, but when push came to shove, they are too afraid to enter positions, or exit them appropriately, due to their emotions overwhelming them.

[AstuteShift]

The best thing is really to divide money into lots and take a discipline approach

I personally like indicators that either have values of 0 to 100,
40 to -40 or 2 to -2

Then you can say based on your testing, what’s overbought/extremely overbought, what’s neutral and what’s oversold to extremely oversold

What comes next is mass psychology and the Golden principle, buy when their is blood and sell during euphoria

In a way, TA helps to visualize the process of topping and bottom formation. The rest is listening to what the masses are doing.
Luckily the media gives you a ton of crap which you can use for sentiment

The standard settings imho are pretty crap. Try using RSI and MACD in a monthly chart of the indexes or weekly and there is no good reliable patterns.

What’s extremely valuable about customizing tools is they can give you patterns and a great edge. However that’s a small part of the equation since you must execute and you cannot have fear or greed rule your decisions

[SOL]

Finally, and I don't think enough ink has been given to this topic, but how to execute on a particular set-up? One could formulate a highly accurate TA on a particular asset, and align it well with a dominant trend and taken herd sentiment into consideration, but lacks the balls to enter or exit a given position in a significant manner. So heart and guts are arguably as important as brains.

I've known quite a few mediocre traders (by results) who are amazing at predicting price action over a given time frame, but when push came to shove, they are too afraid to enter positions or exit them appropriately, due to their emotions overwhelming them.

There is only one thing to say when it comes to executing. You have to master your fear, not control it for if you control it will escape one day and the damage will be massive. You have to understand that fear is a useless emotion then like some of the other traders in this forum, you will find yourself smiling on down days.

The other thing to understand is that you can't win all the time, it's part of life, but you will win most of the time if fear is not part of the equation.