What Tools I Use to Trade.

In my first entry I said I would tell you what tools I use to trade and to predict where the markets are going. I am not going to go in to details here on the tools but, as I show my trades I will expand on the indicators I am using.

As I said earlier, I look at a stock because of it fundamentals and then trade the stock based on its technicals. So, from a fundamental standpoint I pay for a stock/leaps screener from compoundstock earnings using the default values given.

Now, what do I use from a technical standpoint. I primarily use Andrews Pitchfork, action/reaction lines and MACD.

If you are not familiar with Andrews Pitchfork go here to learn how to draw the Pitchfork. If you really want understand how Dr. Andrews traded and what he taught people I suggest you take the pitchfork primer course.

Dr. Andrews said that prices will hit the median line 80% of the time before reversing. So, I learned from Dr. Andrews where the price was going but, my problem was until recently was knowing when the price is going to hit the Median Line. Well, I found my answer in a Book By John Crane, Advanced Swing Trading. It falls right in with trading the Pitchfork by using Action/Reaction lines he talks about to predict time. Now I have a target price and a time frame of when I am going to reach that target price.

Now for the MACD. I use the MACD to help confirm what the pitchfork and the action/reaction lines are telling me.

So, where do I go from here. Next, I will make a prediction of the DOW this Friday.

Can a Part Time Investor Predict the Market ?

Predicting the stock market is very difficult since it depends on several known and unknown factors. The sheer success of stock market commentators, authors, websites and newsletters dedicated to predicting the stock market is testament to public demand for this kind of information. Until someone develops a crystal ball that works, predicting the stock market is going to remain extremely difficult or is it?

Of course, predicting the stock market is such a hard and potentially rewarding problem that its appeal will never cease. There is no one who can precisely predict stock trends consistently, all of the time. The philosophy that you can “beat the market with market timing” often leads investors to apply risky, short-term strategies such as day trading — where investors attempt to predict the market’s day-to-day fluctuations. But, is there a way to predict which way a stock will go, constantly?

That' s what I working to accomplish. A way to predict which way a stock is going to go and when. Then, profit from that move before it happens. I plan on doing this by taking a fundamentally sound stock(Leap) and applying technical analysis to the stock to determine it's future short term direction.

Technical analysis is the practice of trying to predict stock prices by examining trading patterns and comparing the shape of current charts to those from the past. By applying the tools that I use to those patterns( I will share them with you in my next post) , I hope to predict a stock's direction enough times to consistently profit from it. Can I do it? We will see.

So, as I progress I hope you will join me and give me your comments along the way. Can a investor predict the market? We will soon find out.