FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Ten Laws of Technical analysis by John Murphy

Ten Laws of Technical analysis by John Murphy

Go down  Message [Page 1 of 1]

notme

notme
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Posted by JC Parets on July 3rd, 2013


John Murphy is the Author of a few of my favorite books. He is a legend
in the field of Intermarket Analysis. And his website, Stockcharts.com
is one of the best out there – I use it everyday.

When people ask me what they can do to start learning some Technical
Analysis – I always say the same thing, “Read Technical Analysis of the
Financial Markets and then read Intermarket Analysis“, both by John
Murphy.

He is, in my opinion, one of the best that ever did it. These are his
Ten Laws of Technical Trading:



1. Map 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 a market. Once the
long-term has been established, then consult daily and intra-day charts.
A short-term market view alone can often be deceptive. Even if you only
trade the very short term, you will do better if you’re trading in the
same direction as the intermediate and longer term trends.

2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes –
long-term, intermediate-term and short-term. First, determine which one
you’re going to trade and use the appropriate chart. Make sure you trade
in the direction of that trend. Buy dips if the trend is up. Sell
rallies if the trend is down. If you’re trading the intermediate trend,
use daily and weekly charts. If you’re day trading, use daily and
intra-day charts. But in each case, let the longer range chart determine
the trend, and then use the shorter term chart for timing.

3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is
near support levels. That support is usually a previous reaction low.
The best place to sell a market is near resistance levels. Resistance is
usually a previous peak. After a resistance peak has been broken, it
will usually provide support on subsequent pullbacks. In other words,
the old “high” becomes the new low. In the same way, when a support
level has been broken, it will usually produce selling on subsequent
rallies – the old “low” can become the new “high.”

4. Know How Far to Backtrack
Measure percentage retracements. Market corrections up or down usually
retrace a significant portion of the previous trend. You can measure the
corrections in an existing trend in simple percentages. A fifty percent
retracement of a prior trend is most common. A minimum retracement is
usually one-third of the prior trend. The maximum retracement is usually
two-thirds. Fibonacci retracements of 38% and 62% are also worth
watching. During a pullback in an uptrend, therefore, initial buy points
are in the 33-38% retracement area.

5. Draw the Line
Draw trend lines. Trend lines are one of the simplest and most effective
charting tools. All you need is a straight edge and two points on the
chart. Up trend lines are drawn along two successive lows. Down trend
lines are drawn along two successive peaks. Prices will often pull back
to trend lines before resuming their trend. The breaking of trend lines
usually signals a change in trend. A valid trend line should be touched
at least three times. The longer a trend line has been in effect, and
the more times it has been tested, the more important it becomes.

6. Follow that Average
Follow moving averages. Moving averages provide objective buy and sell
signals. They tell you if existing trend is still in motion and help
confirm a trend change. Moving averages do not tell you in advance,
however, that a trend change is imminent. A combination chart of two
moving averages is the most popular way of finding trading signals. Some
popular futures combinations are 4- and 9-day moving averages, 9- and
18-day, 5- and 20-day. Signals are given when the shorter average line
crosses the longer. Price crossings above and below a 40-day moving
average also provide good trading signals. Since moving average chart
lines are trend-following indicators, they work best in a trending
market.

7. Learn the Turns
Track oscillators. Oscillators help identify overbought and oversold
markets. While moving averages offer confirmation of a market trend
change, oscillators often help warn us in advance that a market has
rallied or fallen too far and will soon turn. Two of the most popular
are the Relative Strength Index (RSI) and Stochastics. They both work on
a scale of 0 to 100. With the RSI, readings over 70 are overbought while
readings below 30 are oversold. The overbought and oversold values for
Stochastics are 80 and 20. Most traders use 14-days or weeks for
stochastics and either 9 or 14 days or weeks for RSI. Oscillator
divergences often warn of market turns. These tools work best in a
trading market range. Weekly signals can be used as filters on daily
signals. Daily signals can be used as filters for intra-day charts.

8. Know the Warning Signs
Trade MACD. The Moving Average Convergence Divergence (MACD) indicator
(developed by Gerald Appel) combines a moving average crossover system
with the overbought/oversold elements of an oscillator. A buy signal
occurs when the faster line crosses above the slower and both lines are
below zero. A sell signal takes place when the faster line crosses below
the slower from above the zero line. Weekly signals take precedence over
daily signals. An MACD histogram plots the difference between the two
lines and gives even earlier warnings of trend changes. It’s called a
“histogram” because vertical bars are used to show the difference
between the two lines on the chart.

9. Trend or Not a Trend
Use ADX. The Average Directional Movement Index (ADX) line helps
determine whether a market is in a trending or a trading phase. It
measures the degree of trend or direction in the market. A rising ADX
line suggests the presence of a strong trend. A falling ADX line
suggests the presence of a trading market and the absence of a trend. A
rising ADX line favors moving averages; a falling ADX favors
oscillators. By plotting the direction of the ADX line, the trader is
able to determine which trading style and which set of indicators are
most suitable for the current market environment.

10. Know the Confirming Signs
Include volume and open interest. Volume and open interest are important
confirming indicators in futures markets. Volume precedes price. It’s
important to ensure that heavier volume is taking place in the direction
of the prevailing trend. In an uptrend, heavier volume should be seen on
up days. Rising open interest confirms that new money is supporting the
prevailing trend. Declining open interest is often a warning that the
trend is near completion. A solid price uptrend should be accompanied by
rising volume and rising open interest.


Technical analysis is a skill that improves with experience and study.
Always be a student and keep learning.

- John Murphy

source-http://investors.lk/13593

prasadrmb

prasadrmb
Manager - Equity Analytics
Manager - Equity Analytics
Thanks for sharing

D.G.Dayaratne


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I think technical analysis is based on hypothesis " Rational behavior of Economic man"

Western societies percentage of economic men is very high.due to various factors effected in the process of evolution of society
But our percentage of 'Economic men is very low comparing with western societies.You can't see rational behavior in our stock market as
in case of other developed western countries

Therefore it very difficult to apply technical analysis in this country
I do not reject technical analysis compleatly


Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum