Market Wizard Linda Raschke’s Technical Trading Rules
- Buy the first pullback after a new high. Sell the first rally after a new low.
- Afternoon strength or weakness should have follow through the next day.
- The best trading reversals occur in the morning, not the afternoon.
- The larger the market gaps, the greater the odds of continuation and a trend.
- The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
Continue Reading →
StockCharts.com’s Chief Technical Analyst, John Murphy, has created another set of trading rules: “Ten Laws of Technical Trading:”
“Which way is the market moving? How far up or down will it go? And when will it go the other way? These are the basic concerns of the technical analyst. Behind the charts and graphs and mathematical formulas used to analyse market trends are some basic concepts that apply to most of the theories employed by today’s technical analysts.”
The following are John’s ten most important rules of technical trading:
- Map the Trends
- Spot the Trend and Go With It
- Find the Low and High of It
- Know How Far to Backtrack
- Draw the Line
- Follow That Average
- Learn the Turns
- Know the Warning Signs
- Trend or Not a Trend?
- Know the Confirming Signs
Continue Reading →
