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Which indicators to use?
There are SO many to choose from !!!
I got the MACD, RSI Moving Average, and the Stochastic....
I somewhat starting to learn how to read these chart, however,
- The stock in the attached picture, SPX; how would I guess which way it will turn?
- XYZ is on an upward trend for a week, how do I know it won't start going down as soon as I buy them (I know that no one can predict that, but I'm sure some of you pros have a "calculation" or "sign" that you use to make a decision)
I know none of my questions can be answered in a short sentence, and there is no certainty in this stock market, however, I was wondering if you guys could give me a few pointers to help me make "better" decisions.
I started to watch tastytrade videos along with youtube, etrade videos. They are great but does not cover a whole lot.
Thanks guys !!
Tastytrade does not give a whole lot of attention to technical analysis (aside from Slim and a couple of the other guys). The reason is that they come from the fair market school of thought. They assume that in an efficient market everything that can be know about a stock is already priced into it. When new information becomes available it quickly is priced into the stock. As far as they are concerned as long as a stock is trading efficiently and is liquid the movement either way is basically a 50/50 shot. They are contrarian traders and therefore will go long when they believe something is weak and go short on something they think is too strong. They do scalp on the side but the bulk of their philosophy is wrapped around selling premium (theta (time decay) and volatility). They do allow that technical analysis has it's place but mostly just as a tool to give someone a direction to choose. They believe that you can use whatever you want to pick a direction but it is the option strategies themselves that give you the edge.
Tom and Tony have been trading since the 70's or early 80's and started out as market makers on the CBOE floor. Tom developed Thinkorswim, Tastytrade and Dough.com.
How do you choose your options? I mean if you were to scan using thinkorswim, which fundamentals do you and what values return results for suitable underlying stocks?
I find it comical when people think they can pop up an indicator and be successful at trading. Think about it, if the market was exploitable who would be first to catch the exploit, you or a billion dollar fund with more resources than you could conceive (looking at the performance of most of these funds, it's a safe bet there is no exploit)? Your only edge as a speculator will be to stand apart from the crowd and to act opposite of their beliefs and expectations.
