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Liverpool Trader Checklist There you have it! We have narrowed down our technical indicators to be capable of answering one of the three questions: “Where is the market going?,” “How quickly is it getting there?,” and “When will it arrive?” By mixing and matching technical analysis tools to make you feel comfortable, you will be able to answer these questions in no time. If you find technical indicators that don’t answer any one of these questions, dump them. If you have more than two or three technical indicators to answer any one of these questions, dump them. If you find yourself attempting to trade from fundamentals only, dump them. Here are the key technical analysis indicators and the questions that they answer: “Where is the market going?” 50-day MA Higher lows, lower lows “How fast is it getting there?” RSI Volume, OI “When will it arrive?” Horizontal support, resistance Fibonacci retracement, Bollinger bands. Black Box and Systems Trading When speaking of technical analysis, I could not leave out black box and systems trading. Time and time again there will be talk of 90% accuracy or a program that tells you what trades to pick. While the program may be successful at picking trades, the art of making money in leveraged investing is still based on how well you get out of trade. Don’t be fooled by high-accuracy percentages that may or may not reflect money made. If trading were that simple, why would multinational corporations still be hiring specialists and brokers to help them make money? If it sounds too good to be true, it usually is. Develop and use your own technical tools first before you turn to an off-the-shelf product that may cost you thousands when all you really needed was the ability to answer the three main questions.
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black box, systems trading, technical analysis indicators, fibonacci retracement,
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