1 Study the trends Study long term charts Begin a Chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long term perspective on the market Even if you trade only the short term you will do better if you are trading in the same direction.
2 Follow the trends Make you sure you trade in the direction of the trend. Buy dips if trend is up sell rallies if the trend is down.
If you are trading intermediate trend use daily and weekly charts. If you are day trading use daily and intraday charts.
3 Draw the trend line
Trend lines are one of the simplest and most effective charting tool. The breaking trend lines usually signals a change in the trend.
4 Find the Retracement
Measure the percentage of retracements market corrections up or down usually retrace a significant portion of the previous trend.
A fifty percent retracement of a prior trend is most common.
5 Find the support and Resistance The best place to trade is near the support and resistance.
6 Follow the Averages
Follow the Moving Average. Moving averages provide buy and sell signals. Trading with Moving averages are very easy. Price crossing above and bellow 40 day moving average provide good trading signal.
7 Trace MACD
Trading with the help of macd indicator avoids failure in the trading.
8 Track oscillators
Oscillators help the traders to Identify over bought and over sold markets. There are many oscillators. Traders can use RSI and Stochastics.
Oscillators work best in the trading market range.
9 Follow the Sectors Scroll all the sectors charts at least once in a month and establish which ones are going up and which are not. Trade according to the sector