Finding the trend in Indian shares
"The trend is your friend". This is a
statement often heard about most forms of trading in Indian
shares as well as other markets. But how do you find the
trend, and also, how does it relate to your trading system.
Trading System – Finding The Trends
By
Stephen Bigalow Bigalow
Trading System – Finding The Trends
It is safe to say that everyone who is trading commodities
wants to make money. In spite of that incredibly obvious
observation, there is a kernel of truth to be found. While
everyone wants to make money with their investment
strategies, there are investors who do not prepare The trend
is your friendfor success. Trading plans, technical analysis
and trading systems are all valuable parts of the equation
yet many people don’t take the time to implement them,
hindering their own success.
The Whole Picture
The recipe for a successful investment philosophy is only as
good as the sum of its parts. If your trading plan is solid
but you don’t do technical analysis, you going to have
problems. If you perform your technical and fundamental
analysis but you don’t have a trading system, you will
struggle to succeed. If you don’t have the best trading
system available, you are likely to leave profits on the
table during your futures and options trading. No matter
which part you consider, if you don’t emphasize them all,
you are going to be weak in a very important facet of your
trading.
Trading Plan
This is where it all begins. While you may rely on your
trading system to help you ultimately find the targets for
you acquisitions, your trading plan is what will get you to
the place where you are ready to search. Will you invest in
the stock market or commodities trading? What plans will you
put in for stop loss strategies? What about your investment
philosophy? A well constructed trading plan will help you
with these questions and many more, especially when trades
are happening quickly and you are tempted to react with your
emotions. Just as a trading system is the voice of common
sense for your target acquisitions, your trading plan is
your voice of reason for your business decisions.
Technical Analysis
After you know what you are going to do and have your plans
on how to do it, you can get down to the business of
learning. Technical analysis is really about education. If
you understand the commodities that you are trading and the
factors that affect their prices, you have a distinct
advantage in picking profitable trades. You don’t know about
pork bellies? Don’t trade them. You have researched oil
futures and understand the dynamics of their price
movements? Seriously consider investing there. This is
important because if you understand a commodity, you are
likely to understand the things that make its price move,
whether it is the weather, demand or the latest news report
on the 6 o’clock news.
Trading System
Once you have a trading plan and you have started performing
fundamental and technical analysis, you need to put a
trading system into place. The trading system represents
your approach to following price movements of your target
commodities. Trading systems can be simple like bar charting
or more sophisticated like Japanese Candlesticks. Bar charts
will give you information like the open and close of a
particular stock. With a bar chart you can get a general
idea of how a commodity has been trending but nothing about
where it is going in the future.
Japanese Candlestick charts offer you much more. This
trading system offers opening prices, closing prices, highs,
lows and whether the stock was up or down overall for the
day. In addition, this trading system offers powerful
analysis tools based on several hundred years of use.
Conclusion
Each part of a successful trader’s approach to his or her
investments is crucial. The trading plan, the technical
analysis and the trading system all contribute to the
investor’s ability to create profitable investments.
About the author:
http://www.candlestickforum.com/PPF/Parameters/1_21_/candlestick.asp
A site dedicated to stock market investing using Japanese
Candlesticks
Article Source:
http://www.Free-Articles-Zone.com
