Thursday, June 4, 2009

Chart is always right

I often get a question about other markets I follow during the day, with goal to predict potential reversal points for ALSI. As far as I see, beginners are doing exactly this - They move back-and-forth between Dow futures, S&P futures, FTSE chart, ZAR chart, US market news, Bloomberg, CNBC, etc. trying to find a reason, or two, for particular market behavior.

So, let’s get this right first time: All my decisions about entries and exits are based only on ALSI chart and nothing else. Chart always knows where it wants to go and why it wants to go there. Our task, being traders, is not to know why market is going up or down, but to jump into developing trend, and ride it as far as possible.

This morning I left a link (on twitter) to some external blog that explains what the market is doing in US. Usually, I check several blogs from US every morning before our market opens. There are very clever traders out there and these traders are preparing useful charts free of charge. These charts I check just to see, in context, what we can expect as ALSI gates open. And, at the end, when our market opens, there is only one valid chart and that is the chart you trade. 

If you are starting now, I would suggest you to concentrate on the chart that you are trading. Everything else is just noise that will contribute to mismanagement of your entries and exits; that will push you to overtrade; and make you skip good trades and get into bad ones.

Trade well.


Liquid Trader said...

Cool blog Icko... Asked me mate who does the techie stuff to put a link in from my blog to yours.

Trade to trade well!

Alsi Trader said...

Liquid Trader

didn't know you have one will check what is going on there

Thanks for link

Brad Zurich said...

I agree with you that charts have a great story to tell, the 200 day moving average and 50 moving average is pretty what the stock will do in the near future.

Until of course there is a major development that either changes the entire outlook for that stock, that company or the entire sector and industry.

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