How to improve trading skills

How to improve trading skillsYou can improve your trading skills as follows:

evaluation of various trading systems and practical testing of ideas related to trading;

keeping logs of executed trading operations with the aim of further evaluating the effectiveness of your trading operations;

monitoring the “tax consequences” of your trading operations;

maintaining contacts with other traders.

 

Quotes charts display stock price changes over time. These charts contain important information about the auction, which can be identified as a result of scrupulous analysis. Reading, interpreting and understanding the information contained in the quotation diagram is described in x 8-11.

 

Fortunately, finding quotes does not pose a problem. If your broker does not provide the proper charting package for your clients, you can find excellent charting tools on dozens of websites.If you have to go beyond your broker’s environment, then you will have to come to terms with such troubles as banner advertisements on the Internet and pop-up ads. Most charts that can be found on free websites display stock quotes with a 20-minute delay. You may have to pay from $ 9.95 to $ 19.95 per month for online charts that are updated in real time.

 

At a minimum, you need control over the timeframe and types of displayed charts. For example, you might need one-minute, five-minute, fifteen-minute, and sixty-minute charts to work with daily, weekly, and monthly charts. In addition, you may be interested in the following characteristics.

 

Trading volume

Moving averages that show the change in average quotes over time. You will need at least two types of moving averages: simple moving averages and exponential moving averages; In addition, you need control over the averaging period. Moving averages are discussed in Chapter 11.

 

Indicators and oscillators that help assess the direction and moment of change in quotes. We use the MACD indicator and the stochastic oscillator tochatic Ocillator. Indicators and oscillators are discussed in Chapter 11.

 

Ability to use different styles of charting, including bar charts and candle charts. Bar charts are the most popular type of quote charts, and it is this type of chart that we will use extensively in this book. How to interpret such charts is described in Chapter 9. Candlestick charts display data on quotes using a slightly different format that some traders prefer. The analysis methods described in this book are applicable to both charting styles.

 

Ability to display data in a journal or semi-log format. This provides the same type of equal percentage changes in quotes in the chart of quotes, which may be very useful in the case of comparing changes in quotations of two blocks of shares with different prices. If, for example, the price of shares of one company changes from 10 to $ 20, then this means a 100 percent change in price.If the stock price of another company changes from $ 50 to $ 100, then this also means a 100% price change, but on the standard price chart this price change will look much more significant than in the case of the first company. Use to display the same percentage change in quotes in a journal or half-journal format. In this case, they will really look the same.

 

The ability to group charts, allowing you to quickly find open positions or suitable candidates for trading.

 

The ability to display support and resistance levels, draw trend lines and create annotations.

 

There are two types of electronic charts: quotes charts in real time and quotes charts with a delay. Although these charts may look the same, the quotes displayed by these charts are not the same. Quotes charts in real time display data on current quotes, updated just a few seconds after the execution of each trading operation.Delayed quote charts do not reflect the results of the most recent trading operations: the quotes shown in such a chart are somewhat outdated.

 

Despite the presence on the Internet of many excellent options for constructing charts of quotations, they, as a rule, are not as flexible or configurable as those offered in stand-alone quotes charting packages or integrated trading platforms. On the other hand, you probably do not have access to software for developing and testing trading systems, which is required to create and test your own trading system. The advantages and disadvantages of online quotation diagram building systems, stand-alone quotation diagram building packages and integrated trading platforms are discussed in subsequent sections of this chapter. Methods of developing and testing personalized trading systems are discussed in Chapter 15.



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