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Technical Analysis Methodologies
Education and topics covering technical analysis methodologies, an essential skill set that all traders should possess.
Basic rules of trading: Trading with the trend
Many traders have found themselves in a position where they have got of a trade too early. Humans carry out this sort of behaviour, looking for reasons, because it’s how the natural world works. But trading is not natural, and reasoning doesn’t matter when there are more buyers than sellers. Winning traders have an open mind, and are strong enough to admit when they are wrong and close out quickly. Consequently, their position is usually strong, and they stay with a winning trend, until it ends.
Basic rules of trading: Limiting risk
Whether you are buying Government stock, or trading options, or shorting a tech stock, there is always risk in the short term. If you think about money flows around the world, they often reflect factors over which you have no control. So what was a sensible trade with everything fine can go horribly wrong, and some traders end up turning a short term position into a drawn out battle just to get their money back.
Basic rules of trading: Manage your money
One area that is rarely examined because it is very complex is money management, and the reason is probably quite simple.
Basic rules of trading: Expanding on the basic rules
The three basic trading rules are trading with the trend, limiting losses and money management. We thought it would be useful to expand on three more obvious rules that complement the above basics, and to a great extent they highlight the failings of many traders in specific situations. We will expand on trading within a bull market, buying strength and avoiding averaging down.
Basic rules of trading: Volume
Many traders ignore volume at their peril, and there are far fewer volume based indicators than there are overbought/oversold or trend based signals available on current trading software. Nevertheless, this issue of the trading academy takes a look at volume and its relevance to trading signals.
