Monday, December 21, 2015

John Murphy's "Charting Made Easy"

If you are like most small investors, graphs and charts probably remind you of your middle-school mathematics classes that you hated to attend. 

Teaching maths is an art. Many teachers turn it into memorising of formulae without explaining the relevance. Those who can make it lucid and fun hold the attention of their students. 

Charts are pictorial representations of data. They make it easy to 'see' any underlying patterns in the data. This is particularly useful for stock price charts.

Why? Because the underlying patterns represent the collective greed and fear of market participants. 

Studying price charts is called 'Technical Analysis'. But there is nothing 'technical' about it, because there is very little math involved.

Spend a little time in understanding the various price patterns, and what they reveal about investor sentiment. There is no better place to start than John Murphy's introduction to chart patterns.

You can read the eBook at this link. Bookmark the link and return to it periodically. 

You won't become an expert overnight. But you will get an idea about what is going on in the market. Why prices are moving up, or down or not going anywhere. 

With practice and experience, you will learn when to buy, when to sell and when to sit tight.

2 comments:

satvinder Pal Singh said...

Sir,
I am regular reader of your blog and benifited by it. Sir If time permit pl. see NBCC as I am looking at it. It has corrected more than 20% from 1189.5 (5/8/15) to 902.8 (24/8/15)but on other parameter it looks bullish to me. Pl. give your valuable comments on this stock. Thanks.

Subhankar said...

Hi Satvinder

Thanks for visiting my blog.

I don't track NBCC - so can't comment whether it is investment worthy or not. Technically, after touching a new high in Aug '15, the stock has been in a sideways consolidation within a range of 900 and 1050.

The stock price can break out in either direction after the consolidation gets over.