facebookCan anyone lead me to some ways how I can learn about Technical Analysis with regards to buying my stock price? I don't seem to buy in at the amount I want (when it runs overnight)? - Seedly
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Anonymous

11 Oct 2020

Can anyone lead me to some ways how I can learn about Technical Analysis with regards to buying my stock price? I don't seem to buy in at the amount I want (when it runs overnight)?

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    What are your thoughts?

    Hi there! Great question!

    Technical analysis is a huge topic. I would give you a few things to read up on.

    1. Understand a candlestick
    • this does not mean candle stick pattern

    • you only need to know what the body, colour and wick mean

    • these are crutial as they give a lot of information of the pschology of the market

    1. Learn to identify the trend

    An uptrend is:

    • Higher highs, higher Low

    • Supports respected, resistance levels broken

    • Moving averages start sloping up

    • More Significant when 50 day smooth moving average crosses 150 SMA

    Identify and draw support/resistance lines

    Learn to use Fibonnauci retracements

    Use Moving averages

    It is very difficult to share without illustrations and charts. PM me on Facebook if you want more help.

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      Ivann Fok

      Ivann Fok

      11 Oct 2020

      Level 4·Founder at pyinvesting.com

      Hi there! The main idea behind technical analysis is to identify patterns in historical prices to help you predict how prices will move in the future.

      There are hundreds of technical indicators out there you can choose from with the most common ones such as moving averages, MACD, Bollinger Bands, and the Relative Strength Index (RSI). However, you do not need to know all of them.

      The most important parameter for any technical indicator is the length of the look back period i.e. how much historical data are you using to predict future prices.

      A longer look back period means that your technical indicator is using more historical data and would be able to identify long term trends in market prices. Swing traders and investors tend to rely on longer look back periods such as the 200 day moving average where they calculate the average price from the past 200 days.

      A shorter look back period is used to identify short term trends in market prices. Day traders for example use the RSI (14) indicator which identifies overbought or oversold prices based on historical data from the past 14 days.

      Depending on whether you are a day trader or a swing trader, you will need to pick the type of technical indicator that fits your investment horizon.

      The best way to learn about technical analysis is to backtest your trading strategy. Backtesting is the process of simulating an investment strategy using historical prices to test how well the strategy would have done in the past. You need to backtest your investment strategy because it allows you to confirm whether you have an edge in the market without risking any of your own money.

      You can use backtesting software such as pyinvesting.com to create a moving average backtest easily by simply filling in a form with the details of your trading strategy.

      As an example, I did a simple backtest below where I traded the S&P 500 ETF (SPY). When the price of the S&P 500 was above its 200 day moving average, I will buy the ETF. When the price of the S&P 500 is below its 200 day moving average, I will sell the ETF.
      Happy investing and may the odds be in your favor!

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