John Murphy is an author, columnist and speaker are very popular among
traders, technician or chartist (traders give priority to technical
analysis). His book, entitled "Ten Laws of Technical Trading" or "ten
rules in Technical Trading" has been made into the handle and the
instructions especially for those who want to know the use of technical
analysis correctly and practical. This paper presents the essence of the
content of the book of John Murphy. Where the direction of the market is in motion? To how far an uptrend or downtrend will last? When it will happen or reversal of a reversal of direction? Point-point is become a major concern analysts. Reversed the pattern of price movements and technical indicators on chart trading, the direction of movement of the boom is the most important thing and the most important wish is known to traders and analysts.
John Murphy wrote down the book based on his trading experience for 30 years by using technical analysis. Of the inputs acquired during a technical analyst for the show ' Tech Talk ' on CNBC-TV, he compiled ten rules to help newcomers understand the outline method of the use of technical analysis. He hoped that the traders could identify any opportunities that exist in the market in order to open a trading position.
Murphy on technical analysis approach prefer the price movement
direction or trend rather than the reason of occurrence of the trend
itself. Here are 10 rules that must be observed in using technical
analysis trader:
- Identifying price trends generally
- know and follow the direction of the current trend of
- determine the level of the lowest and the highest level of
- Identify when a trend will turn around the direction of
- Interesting trend lines on important points the direction of price movement
- follows the direction of the moving average line
- Knowing the time reversal of the direction of price movement of
- know the indications of changes in the trend of
- strength (strength) trend
- Knowing the direction of the trend of the magnitude of the volume of trade (for the stock market and futures)
Following each description points:
1. Identify price trends generally
Always learn long-term chart. Start by looking at the chart, monthly (monthly) and the weekly chart (downloads). Time frame higher chart will be more visible (easily visible) in determining long-term market perspectives. A long-term perspective is important in mind as a guide in identifying the direction of price movements at this time. If you have been able to identify a long-term trend, then you see the direction of price movements on the shorter term i.e. on daily chart.
Any time frame you normally use as a reference when trading, you should always look at a higher time frame in order to obtain a correct perception of the direction of the trend. Short term trading charts are often inaccurate and raises the error trend direction. Even if you are trading in the very short term though (as in the time frame 5 minutes or 1 minute) will be more secure if you open a trading chart position based on the medium or even long term.
1. Identify price trends generally
Always learn long-term chart. Start by looking at the chart, monthly (monthly) and the weekly chart (downloads). Time frame higher chart will be more visible (easily visible) in determining long-term market perspectives. A long-term perspective is important in mind as a guide in identifying the direction of price movements at this time. If you have been able to identify a long-term trend, then you see the direction of price movements on the shorter term i.e. on daily chart.
Any time frame you normally use as a reference when trading, you should always look at a higher time frame in order to obtain a correct perception of the direction of the trend. Short term trading charts are often inaccurate and raises the error trend direction. Even if you are trading in the very short term though (as in the time frame 5 minutes or 1 minute) will be more secure if you open a trading chart position based on the medium or even long term.
