Technical Analysis

Chart Analysis

1. The first step in technical analysis is to determine whether we are in a bull or bear market. Next is in what phase of that market. I prefer Dow Theory and Pendulum Theory. Once we know what phase we are in, we look for signals to determine whether to buy or sell.

2. Trend, Support/Resistance, Gap

3. Price Patterns and Japanese Candlestick

4. Elliot Wave

Statistical Analysis

5. Trend: Moving Average

6. Momentum/Swing: ROC, RSI, Stochastics, MACD

7. Depth: CADI and ADR, OBV

8. Others: Bollinger Bands, SAR Parabolic, CCI

Efficient Market

- Three condition precedents

- Three Levels: weak, semi-strong, strong

- Random Walk

"Trend Trading for a living" says these four are the most important (at p 18):

• Price patterns (as determined by the use of trendlines and channel lines)
• Moving averages
• Technical oscillators (the exact mix I use changes with the markets, but the core five are MACD, stochastics, RSI, CCI, and OBV)
• Japanese candlesticks