Starting out 2 - Technical Analysis

[theArtfuldodger]

Thanks S. I went to the library today but some sod has already got the "Intelligent Investor" on hire AND there's already another in line for it after him. I'm next though! I'm looking forward to reading it!

I'm starting to put together a general system/process of analysis for investing. I'm thinking I'm gonna go for a hybrid of FA (for identification of opportunities) and TA (for entrance/exit strategy).

Here's what I've identified (noobishly) as being what I see as most relevant/important:

FA Qualitative techniques

- Company direction and ethos
- Management evaluation
- Future expansion prospects/pending projects

FA Quantitative techniques

- EPS + P/E ratio
- Debt ratios
- Cash flow analysis
- ROA
- *Attempted* valuation of pending projects

TA techniques (I've made a bit of a distinction here...)

RIDING THE TREND

- Support/resistance theory (standard deviation channels + candle sticks in particular).

(s.d. channels really seem relevant to me for some reason, given what I've learnt in stats... does anybody else favour these?)

TREND REVERSAL RECOGNITION (entry/exit)

- Volume analysis
- Still working on this...


I realize the volatility of various stocks varies greatly, but given the analysis I've done on NZO (NZ Oil and gas) I think I'll be looking a trading time frame of roughly 2-3 weeks (medium-term trends).

Right! Time to get paper trading!

I realize most of what I've said here is pretty random crap, but I'm excited about all this and I couldn't help but share. Tell me what you think.

Cheers!

A.

[stone small green]

another important things in trading I guess is how you react to things,
don't get too excited when u earn
and don't get too sad when u loss,

[theArtfuldodger]

Thanks AA. That chart is particularly good. I'll make a good effort of fully understanding it (not sure what a "Doji" is etc) a little later.

Just a question regarding this statement:

"not good to focus too much on Trading time frames you have to re-act to the market movements which means you wont know your position time frame until the market tells you."

When I said I've decided on a timeframe of 2-3 weeks, I meant based on the historical fluctuations in price. This particular 2-3 weeks i quoted was from looking at the price fluctuations in NZO's stock price (highs/lows seem to occur alternatively at roughly 2-3 weeks intervals). I realize that the volatility of other stocks will not be the same. EG - another stock may have similar fluctuations, but perhaps more frequently, maybe every week or so. Is this not a valid way of assessing roughly how frequently I will be buying/selling? I also realize that the techniques you mentioned will probably allow me to predict this fluctations even more accurately, but for a rudimentary analysis of volatitliy, is just looking at the graph like this sufficient to decide on timeframe?