The Tools and Techniques
In this brief introduction I am going to outline the trading tools and techniques I use, then from the initial introduction to each, I shall let you know of the other technical analysis and further hints that I use. Then as a grand finale, I shall explain to you how these work as a whole.
Before I begin. I know I keep moaning at you to read and reread these modules over and over again. Well you DO need to do this here more so than ever. This is where you are going to be learning how to make your money from Financial Spread Betting.
Don’t take these brief introductions to each Tool and apply them separately. The whole concept of what I am teaching you here is, that each tool compliments the next and works well together. Separately, they tend to be less accurate. To cut a long story short it has taken me a long time to develop the right collection of simple to use tools, that are freely available on most online services and software programs, that combined with the additional techniques I will teach you, all compliment each other and work as one together. Culminating in a powerful system for spotting price movements.
Once we have all the tools set up, I will then cover ‘Candlestick’ charting. A Japanese method of reading financial data that was introduced less than 20 years ago by Nison. I will cover how to read them and the best indicators of ‘candle formations’ that I use to gauge market sentiment and potential direction.
Next, I will cover the additional techniques that I use to scalp quick profits from highly
volatile stocks; such as those found within the NASDAQ and the S&P100. This technique, which I call the ‘Bounce’, is highly effective and easy to apply and use.
Finally, I will put all of this together, so that you can see the tools in action, along with the techniques, cementing your understanding of the techniques and tools used.
Right, before we begin, you will need a pen and paper just to note down a few things as we go along. OK, so after I have hammered the point to death, let’s get busy and do some work shall we?
The Tools:
The tools I am going to be discussing with you should be available for you to apply on most online charting services and free downloads. They are common tools that are simple to use, when combined with the additional focus of the tips and tricks, that I will also be teaching, you will end up with a very powerful system in place for spotting trends.
One final thing! Some of you may be experienced with some of the tools that I will show you. Do not because of previous experience decide that the tools are either too simplistic, or you didn’t like the tool before and as a result not use it.
The Logarithmic Chart (Log Scale):
The first thing that we have to check before we proceed is to make sure that we’re using the correct chart for our system. There are two ways for chart data to be presented on screen.
Standard Linear Scale:
The standard default view is the view that the majority show. It shows the chart in relation to point movements. The view we see is based on the movement in price form.
Log Scale:
The prices are still the same for obvious reasons. The chart is a little different. The chart movement is based on the percentile change in the share, indices etc.
This gives us a little edge. It tends to show the less obvious chart movements. Which can help in spotting the price movements in the short to medium term, by smoothing out for want of a better word the ‘Noise’ sometimes created by large price movements.
The best way is to try this out for yourself. Once again return to your favourite online service or software. Within the chart setup will be an option that will say something like ‘Log’ or ‘Log Scale’. Click between the standard view and that of the Log view and notice the little differences in the price line.
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