Technical Analysis and Charting


To be honest, I'm not totally sure that I'm sold on technical analysis. It's been an OK tool so far and I still look at my charts everyday. Warren Buffet has said that he knew technical analysis was useless when he turned the charts upside down and saw the same thing. Phil Town uses technical analysis as a sort of insurance against a market collapse. Basically, he wants to be able to get his money out of stocks and into T-Bills before the big-guys have time to move all of their money out of stocks. I'm going to keep at it and maybe sign up for an Ameritrade account where you can backtest your strategies against 10 years of data. Anyway, Phil Town reccomends investtools. However, I'm definatley NOT willing to shell out $600 on a tool just to get me some arrows on when to buy and sell.

So, If you are interested in technical analysis, the best charts that I have found are as follows in this order:


Prophet Charts: 1 watchlist and portfolio are free! Great tools and charting options. View multiple studies on one chart. They give you the ability to annotate your charts with trendlines and save chart styles and drawing options.
MSN Money: Nice charts. Settings arent saved from computer to computer. You can only view the price line and another tool at the same time.

Yahoo Charts. Nice interactive chart. However, they dont give intra-day trading information.

After you read Phil Town's blog and book you will have a solid understanding of how to use the "3 tools" or his version of technical analysis. Those tools are:





  • Moving Average (MA , 10 and 30 day exponential are my preferred MA)

  • Moving Average Convergence/Divergence (MACD, 8,17,9)

  • Slow Stochastic (14,5)

  • Volume. Even though it's not an official tool, if you see the volume double or more in a day you know something big is going to happen to the price

So, take what you want from technical analysis. Let us know how it works for you.


Looking out for you,


The Little Guy


Posted byLookingOutForTheLittleGuy at 1:37 PM  

1 comments:

Jonathan Crawford said... May 28, 2009 at 5:49 PM  

I am interested in seeing the auto valuation sheet, but it appears the file is no longer available. Can you fix this? Thanks

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