If you’re a technical trader and a technical analyst, what does that mean? Does it mean you’re glued to CNBC all day long trading any symbol that shows up in the news? No. Does it mean that you hunt through pages of economic data and reports and try and figure out what it all means on a global level? No. Does it mean that you look at fundamental data like P/E ratios, debt, revenues, sales, etc.? No.
To be a technical trader and a technical analyst means one thing and one thing only. That you get all of your info from this:
The price chart. This is where you make all of your decisions. This is your stomping ground. The price chart and price activity. You use it to discover where price is NOW. What it’s doing NOW. And what you are going to do NOW.
You don’t try and predict where price is going to go. You look at where it could go. And you remain open to all possibilities. You don’t marry yourself to any direction and you strive to make money in all directions.
In the above chart of the S&P 500 ETF SPY you might notice the following:
And the following:
And based on your experience you might note that the current trend on the daily chart is down. All from looking at the chart. All from taking notice of where price is now.
Knowing that 3 out of 4 stocks follow the market you might decide that now is the time to either be short or in cash but definitely not long.
All from looking at a chart.
