Novice chess players know the basic moves and they focus on their game plan. They are oblivious to what their opponent is doing and they are quickly mated. The market is your opponent. It doesn’t care about your game plan; it has its own agenda. You need to reveal it and then use that knowledge to your advantage.
More than 75% of all stocks follow the market. This is the most important piece of the trading puzzle. If you get the market right, your probability of success increases dramatically. If you get it wrong, the odds are against you.
What You’ll Learn
Our market analysis starts with a longer-term fundamental analysis and we describe it in detail. We need to know the macro forces that are driving the market and we need to be aware of key events that might impact price. Next, we will perform technical analysis on a long-term and a short-term basis to form our market opinion. We describe the indicators and the methods we use in detail. This forecast drives all of our trading decisions and we need to get it right.
In this section you’ll learn how to form a market opinion.