3 Responses to “How to trade stocks using Price as an indicator?”

1. b2fnow says:

   January 20, 2011 at 1:34 pm

   What you’re talking about is Technical Analysis.

   Price is not an indicator. Indicators are derivatives of price.

   Moving averages, momentum indicators, fibonacci levels are all used as indicators to trigger an entry or exit when price moves to a certain level.

   Here is a good reference for definition of finance terms.

   Read all you can, develop a plan, then test your plan on a simulator before trading away your hard-earned money.

   http://simulator.investopedia.com/

   Books
   "Which Is Better, Buy-and-Hold or Market Timing?"

   "Do You Have What It Takes to Be a Market Timer

   Droke, ClifTechnical Analysis Simplified

   Kahn, Michael N.Tech. Anal. Plain & Simple

   Kamich, Bruce M.How Technical Analysis Works

   Lefevre, Edwin – Reminiscences of a Stock Operator
   about Jesse Livermore

   Lofton, Todd – Getting Started in Futures

   Lowenstein, RogerBuffet (Warren)-The Making of a Capitalist

   O’Neil, William J.How to Make Money in Stocks

   Oz, TonyHow to Make Money From Wall Street

   Rotella, Robert P.Elements of Successful Trading, The

   Schwager, JackStock Market Wizards

   Schwager, Jack D.New Market Wizards

   Sperandeo, VictorTrader Vic-Methods of a Wall Street Master

   Wasendorf, RussellAll About Futures

   Slutsky, Scot and Darrell JobmanComplete Guide to Electronic Futures Trading, The

   Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay

   The Intelligent Investor, by Benjamin Graham

   One Up on Wall Street, by Peter Lynch

   Common Stocks, Uncommon Profits, by Philip A. Fisher

   Stocks for the Long Run, by Jeremy Siegel

   Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea

   Trading for a Living, by Alexander Elder

   From Riches to Rags, by I.C. Freeley

   Millionaire Traders, Lein & Schlosberg
2. Stock Trading Warrior says:

   January 20, 2011 at 1:34 pm

   How familiar are you with Japanese candlestick price patterns? With candlesticks, price action is used as an indicator of what the short-term trend will potentially do. If there are are series of two or three bullish price bars, that price strength can be an indicator of continued upward movement (or downward for shorts).

   Personally, the deciding factor for whether I’m going to buy or exit a stock is price strength or weakness. So in that sense I am using price as an indicator. Keep in mind, I also use other indicators like ADX and Stochastics and an above average volume day doesn’t hurt either.

   In trading, probabilities play a strong role. Buying a stock on a strong upward price movement at the beginning of a trend will work better than buying a stock that’s down for the day. A downward moving stock is not in your favor.

   How about if you are looking at two great stocks you want to buy. One has a resistance point 5% away from the current price and the other is at a 52-week high. Both have a strong bullish day. Which would you buy? The stock with the prior historical price high would indicate that when the price hits that old high where the price broke down, it will possibly break down again as those old sellers want to dump some stock. In that sense, price has indicated the probable price behavior.

   Technically, is price an indicator? Probably not, but it’s used as one. I would suggest further study about Japanese candlesticks (there are some good websites on this – candlestickler is one I think) and support/resistance.

   Sounds like you are truly interested in stock trading – keep it up because learning about stock trading is well worth your time. Best of luck.
3. Ajay says:

   January 20, 2011 at 1:34 pm

   you need to get daily updates of companies you are eagr to invest into… for that you can visit share trading sites like Mansukh, Sharekhan etc..