The DOW Moves Higher
If you had read my post on 26/10/18 I gave you my views on where I thought the DOW might be heading over the coming weeks and months. I said that I expected the DOW to move higher.
This was my own personal analysis from reading the daily charts and taking in to account the midterm elections.
There was no inside information or indicators in use here.
My analysis was mostly based on basic price action.
The DOW had seemed to hit a stubborn support level and I had expected the price to rebound from this level… which it did.
The price then moved up, back down to the support level and back up again, forming what you may call the start of a head and shoulders chart pattern.
You could also add into my trading decision that the seasonality bullishness was also a factor.
You Don’t Need a Crystal Ball
The main point that you should take from the above example is not that the DOW moves higher… it is that practically anyone can make an informed decision with a good degree of accuracy on which way the market is likely to go, just from applying the simplest of price action theories.
You really don’t need anything other than your support and resistance levels and some basic candle patterns to hand.
You certainly don’t need the news channels or forums to gauge whether the DOW moves higher or lower.
Simple Strategies Work Best
You’ll know from reading my posts that I favour the simplest of trading strategies.
The only indicators I use with any degree of regularity are moving averages and the MACD.
I am not one for reading a chart with dozens of indicators here there and everywhere.
When I’m reading a chart and looking for an entry point, I will often use price alone to make my decision.
Sometimes I’ll use a moving average crossover. Sometimes I’ll use a MACD. And sometimes I’ll use a combination of all three.
But even if I were using all three indicators to make my entry, my chart is still very simple and my strategy clear and basic.
I often stress this point to students that email me asking what I think of this indicator or that indicator… my answer is always/often the same… I have no idea as I have never used them.
Learning to Trade
My spread betting course is still currently closed to new students. However, I will let a few more in at some stage in January. So if you want to join, please make sure that you are on the waiting list.