The Importance of Charts
I had been trading blind, really. I’d been following the trends on the brokers’ websites. These graphs aren’t detailed enough to analyse properly. After scouting around a bit I found the IBFX MT4 platform which was free to install. You get much more detailed graphs of the stock, which you can extend back in time and scale to whatever time frame you like. The graphs which are most useful for traders are Japanese Candlestick charts. As illustrated above, these charts comprise of little bars, either green or red, showing up or down and according to scale they show the stocks highs and lows for each scale unit.
Whatever platform you use for your charts, make sure you can draw lines etc on it, so that you can visualise the actual trends. As for analysing the graphs, perhaps the experts know far more than a mere novice such as myself. I needed to research what patterns to look for and I found this excellent Visual Training Guide from Fennelly And Co Ltd. It’s in pdf format and can be seen here http://media.wix.com/ugd/56d156_d58ad5d3f2bd4d4e84cbf60acbbd4a22.pdf
As you can see, it gets quite complicated. But now I guess, by putting these techniques into practice I can be on the way to generating my own signals. I’ll be on the lookout for flag and pennant formations. And be in the money, for sure!