It is definitely not easy for the beginner trader to know when to take the trade. After you come out of a class, there are a lot of elements that you need to master, starting with your platform, and then there is the trading software, charting, deciding what tools to use, and, last but not least, get in front of the market.
It came be overwhelming, and a lot of “freshmen” traders get confused.
In trading, you need to take it one step a time. Slow and steady are going to point you in the direction of the money. So, no matter what kind of trader you are, a day trader, swing trader, or investor you need to respect the market rules and your trading plan before ever making the trade.
Once you have everything under control, start your analysis. Make sure that all the time frames are in sync with your choice of direction. When you have the odds in your favor, and the risk to reward ratio is there – pull the trigger.
Everything you do in life is better with a lot more planning ahead of time.
The Trade
DOW – Dow Chemical Company is a leader in specialty chemicals delivering products and solutions to sectors such as electronics, water, energy, and coatings.
- Technical Pattern
Very strong uptrend on the major time frame charts (monthly and weekly). After hitting a high last year in September at $54.97, the stock entered into a steep retracement, testing prior resistance from earlier in the year from which it bounced then sold off again testing the same area of support at $43.00 area.
For the last five weeks, the stock digested the new support, and it is now making smaller moves, which suggests it is ready for another move higher. Price on the weekly chart is also hovering over the 89 SMA, which, for many traders, and investors suggests a strong buy area. The sideways action on the daily chart (represented below) suggests that the stocks might be getting ready to push over $45.50 area. That could send the price into the next resistance areas (marked on the chart) $46.70, $47.30, $50.00, and, ultimately, into $54.00.
- Technical Picture
Good trading everyone …
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For more from Anka Metcalf, please click here.
Remember, as always, you should not risk your own money unless you understand and are comfortable with the position and you have a full understanding of the risks of trading securities.
