KZA Chart, page-187

Are those questions to me?

1. By default, I like to look at the daily and weekly candlestick chart with volume. I find that looking at those charts and applying my very crude understanding of Volume Spread Analysis (VSA) is the best way for me to read the market sentiment for a stock from the chart.

Someone pointed me to an online book as an introduction to VSA and to be honest I've never finished it. I must read it through this Easter.

"Master the Markets", TradeGuider, Original manuscript by Tom Williams From the book, “The Undeclared Secrets That Drive the Stock Market”, written by Tom Williams.

https://www.tradeguider.com/mtm_251058.pdf

VSA is based on old school tape reading, when traders would "read" the ticker tape to gauge momentum in a stock. One of the most famous tape readers was Jesse Livermore, and the book "Reminiscences of a Stock Operator" is a fictional work based on his real life. It is about $14 from Amazon and a great read.

The blue line in my charts is the 200 day (simple) moving average. On the weekly chart I use the 40 week MA. I find it a useful reference point for the medium term momentum of a stock. I don't pick stocks on technical analysis, but I use it to time buying, selling and taking profit. I find the 200 day (40 week) MA useful in this regard, especially for cyclical stocks.

I also find it a sobering reminder that prices tend to revert to the mean. That keeps my exuberance in check. A classic example for me has been PNV. This has been a high conviction component of my portfolio for a couple of years now but I have traded into and out of it. That blue line keeps things in perspective for me which helps in profit taking and deciding when to take my chips off the table and when to look for re-entry ( I bought back in a few weeks ago).



The problem I find with moving averages (exponential and simple) is that so many people have so many different systems, no doubt based on the sort of sensitivity they have to volatility and the time frames they tend to trade within. I don't have any trading systems and I don't want to be whipsawed into and out of stocks or more likely, caught in indecision because of conflicting signals. Also, the I do tend to hold a lot of specki stocks that can be very volatile (check out the daily chart for CYM, a stock I am very bullish on but that is a bit wild in its price action).

I'd be interested to know whether you find that the 18 day EMV works well for you across most charts in terms of indicating whether momentum is being maintained or breached?

I have a chart template set up with 9 day EMV, 21 day EMV as I believe this is a common "golden cross" chart setup. I should refer to it more. I've also set up quite a few other chart templates with many popular indicators such as slow stochastic, rsi, bollinger bands, MACD. I have recently started looking at the bollinger bands when I think the chart is indicating a potential breakout. I also have a monthly chart set up with the Coppock Curve which is sometimes useful for long term turnarounds.

2. I don't tweak any settings on a per stock level, but it interesting to observe that different stocks will move in different patterns over the medium term at least.

Talking about books, someone on another stock board mentioned that they were reading a book written about the ASX "Bulls, Bears & a Croupier (who stopped gambling and made millions)" Matthew Kidman. I've started reading it and will hopefully knock it over this Easter.