Please tell me if I'm correct. I'm not a professional trader.
I see too many methods and systems just encouraging follow the indicators and not telling WHY. So I'm going to tell what I understand so far.
This is how trading really works.
Basically you Buy in at a good price, known as the pullback or the dip. Literally when price dips below the average price.
So if the daily high is 10 and the daily low 3 you want to buy when price dips to 3 and sell or short when price reaches 10.
You are basically buying things at a good price. If you go to a thrift store and see a brand iPad selling for lower than the average price you buy.
When it is higher than average you sale.
Price is driven by people selling and buying. Once it is bought too much it is overbought,buyers drive the price up. selling too much drives the price down.
So you buy oversold signals to get a good price and sell when it overbought because the price is high.
The indicators that calculate overbought and oversold are CCI and Stoch and I think the RSI but not to sure on the RSI.
Then you can also use a moving average. when Price is below the average it makes sense to buy when it is above the average price it makes more sense to sell.
Combined with an overbought or oversold indicator you can identify good places to enter the market.
Last and not least... the TREND is your FRIEND.
When a price it trending means it keeps hitting a certain price, like trendy clothes. Everyone wearing a similar style of clothes. The prices keeps hitting a similar price range.
A Uptrend is when the market is trending at a price then GOING UP a certain amount. The trend is increasing little then going down.
A Trending market is Key to trade in because the market is moving up and down in a predictable way ( according to the trend). Usually in an "ABCD" format to a "123"
I'm still fairly new to this , can you all fill in the blanks to this system? What are the right indicators of the trend? What are the best indicators for overbought and oversold? What are the best moving average indicator.
How do you find the daily high and lows?
I see too many methods and systems just encouraging follow the indicators and not telling WHY. So I'm going to tell what I understand so far.
This is how trading really works.
Basically you Buy in at a good price, known as the pullback or the dip. Literally when price dips below the average price.
So if the daily high is 10 and the daily low 3 you want to buy when price dips to 3 and sell or short when price reaches 10.
You are basically buying things at a good price. If you go to a thrift store and see a brand iPad selling for lower than the average price you buy.
When it is higher than average you sale.
Price is driven by people selling and buying. Once it is bought too much it is overbought,buyers drive the price up. selling too much drives the price down.
So you buy oversold signals to get a good price and sell when it overbought because the price is high.
The indicators that calculate overbought and oversold are CCI and Stoch and I think the RSI but not to sure on the RSI.
Then you can also use a moving average. when Price is below the average it makes sense to buy when it is above the average price it makes more sense to sell.
Combined with an overbought or oversold indicator you can identify good places to enter the market.
Last and not least... the TREND is your FRIEND.
When a price it trending means it keeps hitting a certain price, like trendy clothes. Everyone wearing a similar style of clothes. The prices keeps hitting a similar price range.
A Uptrend is when the market is trending at a price then GOING UP a certain amount. The trend is increasing little then going down.
A Trending market is Key to trade in because the market is moving up and down in a predictable way ( according to the trend). Usually in an "ABCD" format to a "123"
I'm still fairly new to this , can you all fill in the blanks to this system? What are the right indicators of the trend? What are the best indicators for overbought and oversold? What are the best moving average indicator.
How do you find the daily high and lows?