Technical Analysis for Beginners Part Two: Riding the Stock Market Cycle

First, this book will not cover Elliot Wave. This book complements my first book, Technical Analysis for Beginners, or Stop Blindly Following Stock Picks of Wall Street’s Gurus and Learn Technical Analysis.

Any new entrant to the financial markets will be eaten by financial sharks in a short period of time. To protect themselves, investors must rely on technical analysis. By using technical indicators, it’s possible to anticipate trend reversals. But to get there, the use of a charting platform and the understanding of the market cycle stages is essential for the investor.

Anticipation via technical tools
This book focuses on the four stages that make up the stock cycle. Being able to detect, before the crowd, the appropriate time to enter an upward stage is the key for any investor. Each stage can be recognized using technical indicators. In fact, everything you know about technical analysis will be used to analyze the market cycle.

Combination of indicators, volume, lines and patterns
The use of technical indicators remains fairly simple. In this book, the technical indicators are grouped into two categories:

  • one that launches buying and selling signals
  • the other that detect reversals
  • .
    The combination of indicators, volume, lines and patterns with the stages of the stock market cycle leads to better control of trading. Understanding each stage is a great way to anticipate the reaction of the markets. The concept of stages raises some issues Is my stock in a consolidation period? Are indicators are about to launch an imminent breakout signal? Is the initiated sell signal confirmed by other indicators?

    Searching for stocks
    It’s not so easy to find the good stocks! The best way consists of using free or inexpensive screening solution. The use of a screening platform allows you to find the rare gems. Sample forms or search filters are available in this book. These filters can be adapted to any screening platform. The logic in creating search filters remains the same, no matter the screening service provider.

    Like in the first book, the visual aspect of technical analysis plays a very important role. The book contains over 70 figures to assist investors in understanding the interaction between the stages of the market cycle and the technical indicators and other patterns.

    This book does not sell a miracle solution to reap huge profits. The price of a stock is subject to external pressures. Understanding the four stages of the market cycle makes us able to identify when a stock is headed for an upward trend, about to fall, or simply sitting neutrally.