Key Technical Indicators for Investment Success
update: Monday, July 25, 2005
Join technical analysis
expert Fred Goodman as he builds his online encyclopedia of technical
market secrets, chapter by chapter.
To my readers,
It all started in 1968.
Back then I had access to a desk calculator with a magnetic card
that could be programmed to perform 60 steps automatically. Using
this machine, which had to be fed data by hand, I started looking
for the Holy Grail -- the single technical market indicator that
could be relied upon to invariably tell me when to buy and when
to stand aside.
Now, over forty years
later -- having used IBM 360 20's, 300 baud modems and remote computers,
and a Radio Shack "Trash-80" in the 70's, a UNIX based
machine with 1 meg RAM and a clock speed of 8 in the early 80's
that cost $36 thousand, and now a pretty large Dell workstation
and all the data riches of the Internet -- I am still looking
for that one indicator that will do it all.
But over forty years
I learned that no single indicator will ever do it all, and
no indicator will even do it consistently. What I have grown to
rely upon is a group of indicators that I inspect daily,
and a method of averaging the number that are positive, neutral
and negative. Even this is not foolproof, but it is useful in guiding
me in and out of the market.
I've also learned that
every indicator requires interpretation to determine the levels
that correspond with bullish conditions and levels that are bearish.
No two individuals will analyze a group of indicators in precisely
the same manner. It is a subjective analysis that requires attention
I intend to share with
you all the indicators that I use, adding to this encyclopedia chapter
by chapter until they're all there. But that said, I am certain
that there will be changes as we go along -- so I see this as an
endless work in process. Today I use 29 indicators, but many more
are under study, in the hopes that they will become useful down
the road. As I learn more about them, you'll hear about them first
-- right here.
CFP, is a fee-only Certified Financial Planner based in Los Angeles.
You can send him your questions and comments via e-mail at Fred@MarketMonograph.com.
E-mail sent to Fred may be edited for clarity and brevity and published
on this web site, and may include your name unless you request anonymity
or specify not for publication. The charts and commentary represent
what Fred thinks about the market and what he is thinking
of doing for his own account and for accounts he manages at the
time of writing. Fred, his clients, or his family may have positions
or may make trades in securities mentioned in these commentaries.
There is no guarantee that you will profit from trading as discussed
herein. You may lose money and Fred assumes no responsibility for
what you do or do not do with this information. Copyright ©
2006 Fred Goodman. All rights reserved.
purposes only, offered as a periodical of general circulation; not
to be deemed to be recommendations for buying or selling specific
securities or to constitute personalized investment advice. Derived
from sources believed to be reliable, but no warranty is made as