Technical Chart Reading For the Simple Traders

How many times have you wondered how to make heads or tales of technical read outs? Or that the pros make it look so simple? Well myself I have wondered and wondered. I at times in my early trading career saw patterns and recognized head and shoulders but I also lost money. So what did I do? I broke down the process to keep it as simple as possible for this simple trader. First thing I did was I found out that many things were just too technical for me. I couldn't sit there and analyze the charts for hours and see every little candlestick pattern. I couldn't find Doji's, evening stars and every other thing consistently.What was my first step to ending the paralysis I had? I broke it down I looked for the trend. As most traders say the trend is your friend and make the most out of good trades and keep your stop loss tight. So I did that. I would look at a 5 min and 15 min candlestick chart to find the best trading opportunities. I found that this combination helped me in the intraday and making daytrades. I also look at the big picture a daily chart see the overall picture of the security I was trading or for me I loved the gold market so to see the overall health for possible swing trades. Step two if the market was hard for me to see a trend I would look for simple support and resistance lines. Find the support and resistance lines in the security and you will be able to find the opportunity much better. If it breaks through my resistance then I know its headed up and if it moves down through support then I know that the security has a good likelihood of moving the other way. I know you maybe thinking how though do I find the support and resistance? Well find the levels on a chart the the high bounced off of twice and the low never crossed lower. Take a 50 day moving average and lay that in there as well it will help to see movements in the share price. If the candlesticks move above the 50 day then likely it is moving up and the opposite is true for this as well, it shows you the momentum in the share price. After plugging in the data that fits if you see a movement in the share price bounce above or below the support and resistance lines then you have a good trade. If you see the share price trending up then you know that you can have a good shot at making money of that movement. In conclusion this is a very simple way to keep profits in your pocket and to use technical analysis in a very simple way. Understanding basic technical patterns will help in any investing you do in the future. Keep profits high and loss' low and you will be the successful trader that you want to be.