A picture is worth a thousand words …
• DON’T YOU HATE the days you’re staring endlessly at your screen and have no clue what to trade? To get ideas, you visit your favorite chat room, and you listen and read as much as you can to see if anything gets you excited, but still, nothing.
We all go through this from time to time. And since you can’t predict the future, there must be something out there that brings clarity to your trading mind. Lucky for you, you have charts. They may not be able to show you what a stock will do, but they’re good at capturing all that information you hear and read about into one price bar, like a snapshot in time. And that price bar could reflect any time period—a minute, an hour, a year.
Think of charts as silent storytellers. As you watch them unfold during the trading day, they have a lot to say as they evolve and reveal things you didn’t know before the last tick. You can see where price is relative to past highs or lows, past support or resistance levels, and what’s trending or stagnant. You can add a ton of things to charts—indicators, trendlines, arcs, patterns with strange names, and more. And with the right amount of information, charts can be great visual tools for traders.
Our cover feature, “Three Indicators to Check Before the Trade” (page 16), shows you one way to choose the right mix of indicators that’ll indicate a trend’s direction and momentum. Yes, there is a method to the madness!
Once you’ve figured out which way and how quickly prices are moving, your next step is to figure out what type of strategies to trade. You have several choices there as well, some simpler than others. If you’ve been trading options for a while, you may want to venture into something new. In “Pile On With Multi-Spread Organic Trading” on page 24, find out how you can turn a strategy you often use into something else by overlaying another strategy.
Trying new things can be nerve-racking, but it could make your trading life more interesting, too. The next time you’re stuck not knowing what to trade, try something different with your charts.