I remember in my first steps in the world financial markets and technical analysis I was fascinated with the possibilities supposed prediction of price movement of the shares.
Entrance seemed magically, the graphical representation of prices and trading volumes and with the help of identifying patterns possible to analyze any market in any sector at any time scale.
With the passage of time in the learning process and immersion in the trading I started to add moving averages, indicators (RSI, MACD, Stochastic momentum …), levels of Fibonnacci, Bollinger bands, Andrew’s pitchfork and a host of other studies my graphics, in search of the perfect combination – my particular crystal ball, taking me all this to achieve a degree of excessive sophistication.
how are you tools did not quite work with precision and having dreamed concern to acquire skills and abilities to improve operational, I felt the need to return to the origins. In this respect I attracted the techniques advocated simplicity, not requiring complicated indicators or studies attempting to predict the unpredictable and focusing the analysis on what really matters: the price action.
In this line, I stumbled upon the Dow Theory explained and adapted exceptionally by Francisco Llinares in his book ” Professional Technical Analysis “, which clearly and concisely examines trends in price movement and its practical application to operational in the markets.
More recently, a step further in understanding and reading of the markets ( ” reading the tape “) for their own actions in price and volume have discovered the VSA ( Volume Spread Analysis ) based on the principles, methods and studies Richard Wyckoff .
The idea behind VSA lies in recognizing where supply and demand for professionals ( “is smart money “) and who has strength at a given time. You only use prices (high, low and closing) and volume from here and depending on the action of the same act identifies as professionals.
The system lacks sophistication one can identify the signs of strength and weakness, excess or lack of supply and demand, exhaustion or accelerating momentum distribution processes and accumulation, pivot points, key levels …. and combines, identifies and integrates the recent market action by the context in which it develops.
These techniques provides an approach to the markets in a very “pure” form offers a “vision” and an advantage in them, because the fund seeks to observe and follow the professionals with the only unchanging truth of the market: law of supply and demand , however requires strong analytical skills, experience and lots of practice to read optimally.
In this way I have been helpful articles, seminars and teachings of recognized experts in the field such as Dr. Gary Dayton , Linda Raschke and Tom Williams
I think the process and the experience in finding the techniques and tools that inspire me more confidence differs little from most jutting out into the world. I found it interesting to share with readers of the blog at the same time encourage them to share their own in the comments .
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