Stock Market Trend Analysis Made Easy.

There’s an old saying in the stock market that the “trend is your friend”.

This means simply that, as long as you’re in sync with the stock market trend overall, and especially with individual stock trends, you should be making money in the market.

A nicely trending stock will conform to Newton’s First Law of Motion – that says once an object is in motion, it will tend to stay in the same speed and direction of that motion unless acted upon by an unbalanced force.

What is the “unbalanced force” that will cause a stock to change its trend? Well, it could come in the form of several different things – an unexpected good (or bad) earnings report, a new product announcement, another company buying it out, etc. Or it could simply be overextended or underextended above or below historical price action. But the truth of the matter is, you don’t have to know exactly what the underlying cause of the “unbalanced force” is. You have other tools at your disposal to clue you in when a stock is about to change its trend.

One of the simplest tools to use in stock trend analysis is just the use of trend lines. Simply drawing a line underneath the trending price action of a stock will tell you when the trend is violated. I do that often in our Stock Fishing Videos within our daily stock chart analysis lessons.

Candlestick analysis is a crucial tool in alerting you when the trend of a stock’s price action is about to drastically change. Any of the most common reversal signals will give you a heads-up in that area.

Finally, stochastics do a great job in giving you advance warning of a pending stock trend change. Knowing how to glance at stochastics will give you instant knowledge of the probability of a trend change.

We use just a handful of tools – including those above – to beat the market year after year. Once you learn our simple, visual system of stock chart analysis, you’ll be able to immediately tell when a stock trend change is about to happen.


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ATTITUDE

It is attitude and your state of mind that determines your results, not more or better market analysis. You don't nessecerely need to know what the market is going to do next. You need to know what you are going to do next. You have to attain a mind - set, a unique set of attitudes, that allow you to remain disciplined, focused, and above all confident. Very few people who trade stocks ever learn the attitudes that are absolutely essential to becoming a consistent winner.

The successful stock trader that you want to become is a future projection of yourself that you have to grow into. Growth implies expansion, learning, education. You must create a new version of yourself. Your goal has to be to learn how to think like a successful trader, instead of learning how you can make more money by learning more about the markets. Your attitudes and beliefs about being wrong, losing money, is what causes most losses, not technique or market knowledge.

The best traders have acquired a mental attitude that allows them to trade without fear, which keeps them from becoming reckless and  committing fear - based errors. Once the fear is gone you no longer will be subconsciously distorting information, hesitating, jumping the gun, or hoping.

When your feeling confident and not bothered by fears or worries it's very easy to get into the flow, where what you need to do seems obvious. It's almost as if the market screams at you when to buy and when to sell. Because you have no fear you can execute your trades with no internal argument or conflict.

When you are in the flow their is no struggle, you see exactly what you need to see and act on it. The best stock traders stay in the flow because they don't try to get anything from the market, they simply make themselves available so they can take advantage of whatever the market is offering at any given moment.

Fear is the source of 95 percent of the errors you are going to make. You can not be in the flow if you are consistently making errors. You will make errors as long as you are afraid that what you what or what you expect won't happen.

Of course what helps you to achieve this proper attitude is a successful trading system. After all, if you are consistently losing until you wipe out your capital you will eventually give up on trading. Combine a successful trading system with the right attitude and the sky is the limit. To learn more about getting into the flow with the right mental attitude.

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Stock Market Forecasting

Stock Market Forecasting – An Exercise In Futility, A Huge Waste Of Time, And Why You Don’t Have To Do It Anyway.

I get really amused when someone asks “What do you think the market is going to do in the next few months?” As if anyone had some “secret knowledge” of stock market forecasting.

Now, like anyone else, I can come up with any one of several different scenarios of what I think the market will do in the future. And I can really sound “smart” when I expound on the future stock market trends based on what the Fed will do with interest rates, looking at chart trends and extrapolating them into the future, etc.

But here’s the real truth when it comes to stock market forecasting. It really doesn’t matter one iota what you or I think the market will do in the future. The market is going to do what the market is going to do.

Remember, the “market” is made up of human beings. These human beings have these things called “emotions” that will go bonkers to the “fear” side of things, then will go berserk to the “greed” side of things. That’s related to another thing called “human nature”. Can you confidently say you are able to predict how humans will react to anything 100% of the time? I rest my case.

But what if there were a way to effectively measure and monitor these human emotions at any point in time – especially as they relate to stock market investing and trading? That would be a much more useful thing to have,than the ability to forecast the stock market over a broader time frame.

The truth is, and this is where 99% of investors and traders go wrong, you don’t have to know where the market is going, you just have to know what it’s doing today.
And you know something else? Human nature is not going to change. It’s the same today as it was 2,000 years ago, and it will be the same 2,000 years from now.

A certain Japanese rice trader family in feudal Japan – over 400 years ago - tapped into this concept, and developed a system of rice trading that made them the equivalent of billionaires in their time. They developed a series of little markings on rice paper that indicated whether the price of rice was going to go up or down the next day. These little symbols look like candlesticks, and today the system is called the Japanese Candlesticks charting system.

And guess what we discovered over the past 400 years? This system works for any tradable entity with a high, low, open and close price. That includes the stock market of individual stocks. These patterns tell anyone who learns the intricacies of the system the probable direction of that entity the next day, especially at key reversal points. Using this system, you don’t have to know what the market is going to do six months from now, because you can tell with reasonable certainty what the market will do the next day!

The ancient Japanese rice traders called this concept “let the market tell you what the market is doing.” And the system is a visual depiction of human emotions, especially at the extremes of fear and greed.

So now you don’t have to worry about stock market forecasting. Not when you have a system to measure human emotions in the stock market each and every day.

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