STOCK market retail traders can learn to use technical analysis to formulate their own trading entry and exit plan for general market trades or even for specific stocks, said NextView Sdn Bhd chief market strategist Benny Lee.
Lee said that retail traders can use either 30-, 60- or 90-day moving average indicators to chart when to buy, sell or to minimise their risk of capital loss.
In technical analysis, taking note of a stock price's support and resistance levels are key. The support level is typically where the price does not go below a level due to sustained buying interests while a resistance level is when traders/investors are selling the stock, thus preventing the stock's price from rising higher.
"In a bearish market or downtrend, the best time to buy is when there is real fear in the market and when the price moves very far from the average indicator, as there will be a rebound," Lee said at a public talk titled "Crouching Tiger, Hidden Dragon! Grow and Secure Your Wealth in 2010" held in Klang yesterday.
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Traderone: Technical analysis will work if most of the traders are using them. But here, many are market timers, they time their entries and exit based on their feeling and rumours. Perhaps TA will work for those index stocks where the major players are the institutional investors.
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