Could someone please tell me, exactly how to identify stock market trends for short-term swing trading stocks?
Friday, October 29th, 2010How do you identify short-term trends in individual stocks, and be sure it’s a trending market so you can swing trade the individual stocks?
What do I have to look at in terms of technical analysis – and how do you do it in terms of chart indicators for swing trading purposes?
Could you please explain in an easy tone for a novice stock swing trader? Thanks.
Under a sufficiently short time frame, all predictable trends should be priced out already hence the trend can be modeled with a random walk. That’s how the Black Scholes model works. Of course a random walk says that on average over n time periods, the price will not have changed on the whole but it’s also a diffusion that says that on average after n time periods the price will have changed by sqrt(n)*average absolute value of change per time period in either direction (that’s just a crude one dimensional uniform change Poisson random walk, the Black Scholes model uses a Gaussian normal distribution).
There’s very little proof of causality in most Technical Analysis methods, you could try the force index as it’s essentially a measure of investor consensus. Bollinger bands and MACD seems to be a favourite for detecting trends. There’s the concept of support and resistance and the depletion of support or resistance results in the bottoms or tops converging with the respective resistance or support levels where the breakouts occur.
Matthew Arkinstall, investment director at Green Park Capital, explains private equity secondary market trends March 27, 2009, at the Thunderbird Global Private Equity Investing Conference in Arizona.
NASDAQ and FTSE still stuck at 200ma, next week should see a break in one direction. US$ continues to slide, 30 Year T bond yield rising. See my blog for a link to Colin Nicholsons newsletter and analysis of final phase of bear market.
Real Estate Trends in The Dalles OR
Gerald Celente 2010 Market Trends!