What I always find fascinating are all of the different ways people look at charts and all of the different pieces of information people try to attain from a price chart. With so many different schools of thought on money, markets, charts, and so on, what should we really be looking for in a price chart? I mean, conventional technical analysis books have hundreds of pages in them with information on so many indicators, oscillators, chart patterns, and more. With all this, there must be some edge to be gathered, right? I speak with thousands of traders around the world and everyone is trying to make something “work.” This is where I see most people are off track. They spend more time trying to make the latest strategy or indicator “work” instead of taking a moment and “thinking” about how money is made and lost in the markets because after all, isn’t that what all the “work” is for?
Let’s go down the simple logic path for a moment and ask ourselves a few questions to make sure we are very focused on what information we need to get from a price chart.
Question: How is money made when trading a market?
Answer: Buy low and sell higher or sell high and buy lower.
Therefore…
Question: How do we buy low and sell high?
Answer: Figure out where price will turn and where it will go.
Therefore…
Question: How do we figure out where price will turn and where it will go?
Answer: Identify where willing demand exceeds willing supply.
Therefore…
Question: What does this look like on… Continue Reading
