Just came across an article about 10 Laws of technical trading from Chief Technical Analyst of StockCharts.com, John Murphy.

1. Map The Trends – Study the chart, from monthly -> Weekly -> Daily -> intra-day charts

2. Spot the Trend and Go with it – Determine the trend and follow it. Long-term, intermediate-term and short-term

3. Find the low and High of it – Find support and resistance level

4. Know how far to Backtrack – Calculate the retracements.

5. Draw the line – Draw trend lines.

6. Follow that average – Follow moving averages which provide the buy and sell signals

7. Learn the Turns – Use Oscillators, RSI and Stochastics to predict the turn of market trend

8. Know The Warning Signs – Use MACD to have an idea on earlier warnings of trend changes

9. Trend or not a Trend? – Use ADX to confirm a trend

10. Know the Confirming Signs – Read the volume and open interest to confirm the market sign

I believe if you manage to spot the trend of the market and know where the market turning to, making money from trading is as easy as ABC. But the reason here is how much effort and time you wish to put in order to get this skill?

Source : John Murphy’s Ten Law of Technical Trading

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