Technical Analysis and Trading Study Thread

[terva_xyz]

I’ve been reading the TA thread, and a big thank you to those actively writing there; my interest was also piqued in technical analysis and the Tradingview tool. Based on the thread’s messages, it seems there are others who are only now trying out that software. I would see a separate thread as necessary, where we can discuss the use of the program itself and good tips. This would keep the TA thread itself more factual when amateurs post slightly more irrelevant things here.

As a big amateur myself, I’m only now practicing “faster trading,” as I sometimes call it. I’ve only made a handful of intraday or multi-day trades, but since it feels like I’m making a small profit, learning Tradingview is starting to interest me more.

I’ll start with the first question:
Tradingview advertises that you can do “backtesting” for your strategy with it. I’ve watched tutorial videos on Youtube, and it seems that with the program you can scroll through old price data, draw patterns, and then press play, whereupon time progresses and you see if the patterns were accurate. This was a bit of a disappointment, as I was expecting a slightly different type of testing possibility.

Can the software be set to make hypothetical buys/sells when the desired indicators are in certain positions? Simplifying, e.g., when RSI <30, the software “buys” the desired stock with a specified amount, and when it exceeds 70, it makes a sale? That would then be run through the desired time window, and as a result, one would see how many millions were gained in profit?

Edit 2.12.2019: The thread name has been modified to cover more all sorts of TA study-related matters, so that the actual technical analysis thread would remain more “substantive.” (In my opinion, there hasn’t been a problem, but perhaps it’s good to differentiate at this stage already.)

[Toni_Onatsu]

A bit related to this, I also have a question: is there somewhere I could practice trading with a hypothetical portfolio in real-time (or with a small delay)? I’d like to test out different strategies and learn before investing my own money.

[anttirs]

At least Lynx Broker has a “paper trading” option when you create an account there. Of course, it naturally requires installing the software (at least Windows and Linux supported) and creating an account.

[kabu]

Tradingview seems to have some kind of paper trading option.

[terva_xyz]

Hey, that Tradingview papertrading probably isn’t what I was looking for, but I went ahead and got the paid Tradingview Pro + OMX data anyway. I was thinking Pro vs. Pro+, but as @johannes_sippola commented earlier in the TA thread, I also noticed that the Pro version’s 5 indicators are pretty sufficient, especially if you play around with them a bit. You can easily find indicators that have several embedded in them, so you don’t have to open each one separately.

[terva_xyz]

I changed the name of the thread because I wanted to direct this thread more towards so-called “amateur” questions or other learning related to technical analysis or tools like Tradingview. The intention is to differentiate it more from the “Technical Analysis” thread.
Although I’m just starting this whole thing myself, it really helps to have one thread for all sorts of questions & learning and another for more in-depth analysis of good investment opportunities.

The idea of differentiating was already presented earlier in the TA thread, and I thought I’d implement it now because I think it’s a good idea. There probably hasn’t been a problem in the technical analysis thread yet, but I think it’s worth doing as a preventive measure.

[terva_xyz]

Regarding the risk assessment tool:
Apparently, it’s not possible to adjust the number of shares yourself? No problem, but I wonder how the program calculates the “Qty” (quantity) of shares? As you can see from the image, I set the account balance to €100, but it recommends buying 62 shares, which the funds wouldn’t cover. Does it calculate that one should invest with debt, and can that section be modified in any way? (Different debt amount or removed entirely.)

[MoneyWalker]

Off-topic. I got the Displayfusion software, which allows you to divide the screen into, say, three vertical sections. Each section is like its own monitor. Tradingview on the right, trading application (TWS) on the left, and a browser window in the middle for reading and writing. Works well on a 27-inch screen. Cost $14.50. I recommend trying it if you don’t already have something better. There are other nice features too, but this one is the most important for me. Windows 10’s built-in split into two/four parts is somehow difficult, as you always have to look diagonally.

[DayTraderXL]

This is the recommended approach. It’s advisable to familiarize yourself with the broker you register with beforehand, because once you learn to use their software on the paper-trading side, it will be easy to transition to the real side. I personally trade with IB, which has this feature. Based on comments from members of my trading community, all major US brokers have this feature. This also shows how underestimated trading is in Finland/Europe, as such a feature is not available.

[DayTraderXL]

Here’s a quick comment from my vacation: TA shouldn’t be thought of as just a short-term thing. It supports investing, whether it’s a 15-second or 15-year time horizon.
Depending on the time horizon, you just need to know how to look at different things in TA indicators.
This is a big and common misconception. If you watch a few CNBC daily broadcasts, you’ll see professionals from really large funds, all of whom use TA in some form. Some more, some less - in addition to fundamentals.

Of course, among traders there are a lot of people who don’t study companies beyond general information, meaning they believe that charts contain all the necessary information, but even for them, trading involves different time horizons for individual assets. What distinguishes “traders” from “value investors” is that traders define Risk&Reward more precisely beforehand. This means the buy-and-hold mentality is excluded.

[Musti]

@MoneyWalker

Windows 10’s screen splitting into two/four parts is somehow difficult, as you always have to look at it crookedly

By the way, Microsoft released new features this fall that allow you to adjust that screen split much better (for free): How to use FancyZones, Windows 10’s new tiling window manager - OnMSFT

I don’t know the Displayfusion software, so I can’t compare it to that, but compared to the basic Windows split, this new one is much more versatile.

[Latela]

What literature would you recommend on the subject?
In Finnish and/or English?

[LS2]

I’ve seen in a few different threads that people base sales / not buying on an overbought indicator (e.g. RSI). The Nordnet guys went through this in Traders Club.

Briefly, in a bull market, you are bound to be technically overbought quite a lot, because the market is going up.

An indicator is better, especially when overbought, if you can combine it with other ideas / indicators (for example, a trend reversal or something similar). When oversold, on the other hand, it seems to predict buying opportunities reasonably well.

From 19:51 onwards

Jokainen dippi on ostopaikka | Traders' Club 25. jakso

[Janne]

I’ve been dabbling in stocks for a few years now, and for the past year, I’ve also been trying to internalize this TA (Technical Analysis). Now I got TradingView on sale, and the plan is to cautiously start day trading. But since I’ve mainly made trades with Nordea, I now need some basic advice on what programs and instruments would be good for trying out trading with, for example, S&P500, including shorting? Or what other targets are worth trying besides S&P500? So far, I’ve mainly practiced my skills with Nokia and Nokian Renkaat curves on paper, and now I think I could invest some real money.

[terva_xyz]

Many forum members have at least switched to Degiro. Cheap prices but you have to take care of the tax stuff yourself. It’s been discussed in the “Broker discussion” thread.

[DayTraderXL]

I watched the video from the part you linked, and the ideas presented there give a somewhat simplified perspective, unless you only look at the situation from the state of the entire market.

It is true that, for example, in SPY ETF trades, one must be much more careful about whether, for instance, a weekly and daily uptrend is in effect, or merely a weekly uptrend.
Or a situation where peaks have been reached, followed by a correction, and the situation is monitored at, for example, 1H or 5min levels.

I assume Oksaharju is an experienced trader; I have no background information on him. And for that reason, he only talks about sentiment and taking it into account.
And about the fact that, generally speaking, in an uptrend, it is more sensible to trade longs than shorts, which I completely agree with.

But if we are talking about stock-specific or even SPY ETF trading (which is highly volatile), professional traders are constantly looking for shorting opportunities, even in a long uptrend like today’s. One should specify much more precisely what the time horizon target of the trade is – usually, a trader primarily considers the time horizon in addition to the target price to assess how long a particular rise or fall can continue.

SPY was overbought at the daily level during the previous peak on November 27 (RSI typically rises high when the uptrend is this long, RSI 76.5). After a three-day decline, yesterday’s close, RSI appeared to be 53. There was a very clear shorting opportunity there, and those operating with a bear mood specifically look for these. Then, if one examines the matter at, for example, a 1H time horizon, one sees the situation from a completely different perspective. The day after the peaks went practically sideways, and I look for a change of direction at the 1H level in those situations. This became downward when 314.06 was broken. So I wouldn’t have even tried to guess the peaks, but rather looked for this 1H-level change of direction, which at the same time indicates that a consolidation and/or continuation of the decline had occurred at least at the daily level.

Individual stocks then offer many more opportunities, so short shorts are sought all the time, even if SPY is in an uptrend at the daily level. One just needs to know how to time it right and find the right stocks to short.

Of course, there might be traders who would try to guess a long-term downward reversal, and their shorting time window is long. Typically, these are usually hedge-type funds, which, to top it all off, might only be protecting their own longs by taking month-long shorts. Their knowledge, skills, and capital provide opportunities that individual traders simply do not have.

[DayTraderXL]

I forgot to comment that for me, it doesn’t matter if we’re in an uptrend or downtrend when I look for trade opportunities. And I don’t see differences in whether I take overbought or oversold positions. Both work, as long as you know how to look at correlations (e.g., SPY, QQQ, XLF, XBI, DXY, USOIL, etc.) and what timeframe you’re looking for the trade in. For intraday trades, you look at different things and indicators; multi-day swings (not to mention longer ones) require much more stock-specific situational awareness. There are many such long-rising and falling stocks on the NYSE (i.e., ROKU or TSLA, for example). They might rise for many days in a row and then similarly fall back to almost their starting levels. I gladly take trades in both directions on these, regardless of the general trend. And at least I personally use many other indicators than RSI when looking for an entry or exit.

[MattiZ]

Now Nordnet’s Jukas are getting mixed up.
Oksaharju is a stock picker and a holder.
Jukka Lepikkö, on the other hand, is the trader from Traders’ Club.

[DayTraderXL]

Europeans cannot directly trade US ETFs through US brokers. They have to find European trading venues for them, which is really annoying.
However, I don’t recommend playing with fire. For example, SPY is really volatile, and leverage only increases that. Direct stocks or options are safer ground. But if you haven’t operated in the US markets, you should definitely paper trade them, for example, with software or without.

[LS2]

Look! Let’s swap in the right guy!