TechniTrader速 1 B101 Weekly Stock Review 082914
Why Price is No Longer the Most Important Indicator By Martha Stokes, CMT Stock Chart Analysis Should Not Be Limited To Just Price New investors and traders tend to go to the Internet to find information about stock trading. Often, they read many articles that were written decades ago or that use outdated theories and strategies. The information on the Internet is made up of mostly very old styles of investing and trading. Many new investors and traders believe that because a theory or concept has been around a long time, it has to be a good one. Unfortunately, the opposite is true. The market structure has changed dramatically since 2008, and every professional has been changing how they invest and trade as well. New investors and traders need a reliable place to receive current information that is relevant to our modern electronic marketplace, with the new regulations, etc., which will affect investments and trading short-term for monthly income. Older articles claim that price is the only part of the stock chart necessary to study. This is due to the fact that the original stock charts did not include volume, as it was not available to include this in the handwritten or manually-drawn stock charts. Only with the new charting software, which can include all 3 pieces of data, has volume become the standard all professionals use alongside price, even if they day-trade. One of the most important new facts that new investors and traders must face is that price is no longer the most important aspect of a stock chart. There are 3 pieces of data that come from the market for each stock transaction: Price, Time, and Quantity. In order to be consistently successful in the market, you need to learn how to use all 3 pieces of data in your stock-chart analysis. Quantity is defined in 2 ways: 1. The volume for that period of time, such as the volume for one day or one week for the stock. 2. The share-lot sizes traded for that period of time, aka one day, one week, and so on. Price reflects how much the stock moved up or down in relation to prior periods. The period setting on the example chart below is one day, which is the time for this data. This means you have price and time, but you do not yet have quantity.