11 ways to make technical analysis work for you

Julie Brownlee, Fsp Invest, 25 Feb. 2015

Tags: technical analysis, charting, technical analysis tips, how to use technical analysis, trading,



When it comes to short-term trading, technical analysis (or charting) tends to yield better results over fundamental analysis.

While you can’t ignore fundamentals, learn to use your charts to take advantage of market moves and profit.

So how can you make the best use of technical analysis when you trade?

Read on to find out…



11 rules for using technical analysis


  1. Ignore what’s happening in the news when relying on technical analysis. The charts you use will show you what’s going on.
  2. Once you get a signal from your technical indicators, act on it. When you’re trading for the short-term, time is of the essence.
  3. Remember you’re trading for the short-term. Don’t let your emotions interfere.
  4. Don’t exit a trade just because it’s taking its time to get going. As long as a trade doesn’t hit your stop loss or other indicators suggest movements in the opposite direction, stay with it.
  5. If you were following a certain pattern formation for your trade, make sure to keep an eye on it. If it starts to look different, get out of the trade.
  6. Stick with your trading strategy. Don’t let anyone else’s opinions influence you or your trading decisions. It’s your money after all.
  7. Accept when you’ve made the wrong decision. Learn from the experience and try not to repeat the same error in the future.
  8. Keep a trading log and periodically look at your winning and losing trades. See what you’re doing right and wrong, and tweak your strategy if necessary.
  9. Make sure you pick a trading strategy that suits your personality and way you trade.
  10. Even if you seem to be on a winning streak, don’t start taking on higher levels of risk.
  11. Always trade with amounts that you’re happy to risk. It’s important to manage your money and limit your losses.

So there you have it, 11 ways to make technical analysis work for you.

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