It would be a well known stereotype if I say that money in the financial markets are made by buying low and selling higher or by selling high and buying lower (short selling), even though it is completely true. This is a very general statement and in order to be a profitable trader you have to be very specific and analytical.

So, the real question is: ‘’How I know that the price of a stock (or currency, future, etc) will rise when I buy it or fall when I short sell it?’’.

Although you can never be 100% sure about the direction of a price move, as people cannot predict the future, you still can trade with a high probability of success because what has happened in the past it is likely that will happen in the future and you can spot it by using technical analysis rules.

Everyone who has observed a chart knows that prices most of the time are not moving straightforward but in waves. These waves are forming a specific trend. To climb the wave, upwards or downwards and preferably at its very beginning, you have to do it at a certain point and by following the trend our chances of long term profitability are maximized. You can get to the point immediately by reading:

1. How can we define a trend

2. A very simple trend-following trading strategy

3. How to spot the beginning of a new trend

If you are already familiar to the above simple trend-following strategy, then a more advance strategy is trying to find the exact point at which the price will reverse its prior trend, much earlier before the new trend will show itself and before anyone else notice it. In case you want to make money from a price rise you have to clearly understand what a support is and how you can define it on a price chart and then learn how to tell if this support is strong enough to make the price move upwards. When you want to make money from a declining price, then you have to find a instead of a support and decide if it is strong enough to cause a downward move. Here are some relevant pages:

1. What is support or resistance

2. How to quantify the power of a support/resistance

3. Support/resistance property

4. Ride a trend before it is even formatted

In this site we constantly publish real trades so you can have a clue about how these strategies are applied in real market conditions. Here are two examples.

1. A swing trade based on a descending triangle

2. A day trade using the reversal strategy

I hope this is a good starting point to begin with positron-investments.com. Technical analysis principles and most of the strategies are the same for every asset class (stocks, futures, forex, options) and every chart time frame, unless specified otherwise.

In ‘’technical analysis basics’’ tab you can find a step by step guide with all the necessary knowledge to become a successful day or swing trader.