Today I will show you a simple process so you can learn how to analyze stocks in a systematic way. I will show you some of the same steps that I teach my students and practice myself daily. One of the biggest pitfalls that beginners make is not looking at the big picture and only focusing strongly on certain pieces of the puzzle. Unfortunately, learning how to analyze stocks involves looking at several different pieces of the puzzle and putting them all together the right way.

This means that stocks that have reasonably good volume tend to follow and mimic the Indices. All you have to do is take a look at a few popular stocks and you will see that for the most part they follow the index.

This is not always the case but it happens enough of the times that you want to consider what the Indices are doing. You can get a great idea of the current stock market climate by looking at how many stocks are making 1 year highs or lows. This step is often avoided by traders especially beginners.

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You have to force yourself to go through this step because not monitoring fundamental news is one of the biggest pitfalls beginners make. There are several sources of news that are available at Market Geeks Resource page that provide daily schedules of news that is going to be released in the upcoming hours, days and weeks.

Avoid trading particular stocks prior to earnings and other news that may cause random volatility to your position. This is one of the biggest reasons traders get stopped out of their positions prematurely. Last few days I spent some time discussing market cycles and the important of knowing which cycle your stock is in. You how to analyze stocks markets to know if the stock your trading is in a trending cycle or a range bound cycle.

Cycles typically alternate so always look at the previous cycle to give you clues in determining the stocks current cycle. Once you determine the current market cycle you can begin applying basic technical analysis tools to help you gain better understanding of the current market environment. For example if the stock is in a trending cycle you want to bernie madoff stock market rigged basic trending tools such as moving average indicators and trend-lines to determine if the stock is breaking out, retracing or beginning to reverse.

You may want to see if the stock fits into any easy make money runescape2 ways chart patterns to help you decide what phase of the cycle the stock is currently in.

The final step is to apply the correct entry and exit strategy to the stock. If your analysis shows that the stock is in a strong momentum phase and the general stock market confirms this as well a breakout strategy with wide stop loss to take advantage of the volatility that comes with momentum would probably be the best strategy.

If on the other hand you notice that the stock is in a range bound trading pattern you may want to stock market crash october 2010 an oscillator to help measure divergence and overbought and oversold levels. If you notice that a reversal pattern is underway you would want to look for Gaps and reversal entry patterns such as the Gap Tail method or other method that works well with this type of pattern.

If you follow these steps you should have a better idea of the current market cycle and the current stock cycle as well.

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Always begin with the big picture and work down from there. You have to look at the big picture and following these steps will help you do just that. For more information on this topic, please go to: Member Login Technical Support.

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How To Analyze Stocks Using Technical Analysis

Check The 52 Week High Low Numbers. Check Fundamental News Daily Before The Opening Bell. Learn To Determine Current Market Cycle. Use The Correct Indicator For The Job. Related Posts Cup And Handle Pattern Recognition And Chart Analysis.

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