With this lesson, I will go through my basic setup on E-trade Pro. This will allow you to have general ideas on charting program and be more familiar with technical analysis (buy/sell base on charts/graphs). After this lesson you should be able to start trading by using this basic setup, and make better decision on where to buy/sell particular stocks.
All we need for basic setup are: Chart, Watch List, and Market Depth. Market Depth is a level 2 quote, which you can learn more in-depth in this video lesson by Jason Bond. That is the only video you need to learn about level 2 quote.
Below is a charting program in candlestick style. It’s the most widely used by traders and you must learn them in order to trade effectively. There are many patterns associate to them and many traders used them as a buy/sell signal. I will cover 3 patterns that we use in our premium chat later but you can also learn about most of them HERE.
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| Daily Chart- 100day |
Chart:
Picture below is the chart of Apple Inc. (AAPL). All you need to know here are Symbol, Chart Style, Period, and Tools.
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| Daily chart- 50day |
Symbol 1: This is where you enter a company’s symbol and press enter to bring up the chart
Candlestick: You can click on it and change chart style but candlestick is recommended.
Period: Here you can look at a stock in different time frame, in the picture is Daily, 50Day, which means this chart shows a 50 days period and 1 candlestick represent 1 day. So whichever you select on the period, 1 candlestick will represents that selected. Ex. 1 minute, 5minute, daily, weekly and so on.
Tools: I only use Crosshair, Trend Line and Fibonacci Retracement. These will help you make better decision on when to buy/sell.
On the bottom of the chart you will see ‘volume’ bar, those represent volume (shares that stock have traded) over a period of time. Ex. If daily chart selected then 1 volume bar represents 1 day, and if 1minute selected 1 volume bar will represents 1minute and so on.
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| Market Depth |
Market Depth:
This is a level 2 quote, which will give you basic supply and demand information when trading stocks. This is a must have, especially for day-traders. So in the box here, left side represents demand (bid) and right side represents supply (ask). Basic rule of thumb: when demand is higher the price moves up and when supply is higher the price moves down.
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| Watch List |
Watch List:
In watch list tool, I keep all the stocks that I plan to trade here. Normally I will have 20-30 stocks on my watch list and constantly check them throughout the day. Then I will put buy/sell order on which I think it’s ready to move.
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| Basic Setup(click to enlarge) |
Basic Setup:
Above is my basic setup on E-trade Pro. On the top row I have intraday chart on the left and daily chart on the right. And on the bottom row I have SPY chart on the right to give me info about overall market but some people use Dow Jones chart. In the middle I have market depth and lower left is my watch list.
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| Link all the tools (click to enlarge) |
*A good website to go look for symbols is FINVIZ. You can use their screener to screen stocks by sector, short interest, market cap, float and etc.
