Chapter 21. Taking It Further: Technical Analysis and Initial Public Offerings

In This Chapter

  • Coming to terms with the risks and costs of being an active trader

  • Doing technical analysis, reading stock quotes, and studying stock charts

  • Locating Web sites to help you read and understand technical analysis

  • Understanding how to get information about initial public offerings

If you can't help but get a thrill studying the flashing stock quotes on your computer screen, this chapter is for you. This chapter is dedicated to traders who think asset allocation and diversification are for wimps and are confident that they can beat the stock market by studying the movements of stock prices.

In this chapter, you find out about technical analysis, which is the method of selecting stocks by looking for patterns in stock charts. You also get a crash course in reading stock quotes and understanding what different technical indicators can tell you about a stock. I then show you different Web sites that can provide you with advanced charting information. Finally, I go over initial public offerings (IPOs), show you how to invest in them, and explain the risks. I cover IPOs in this chapter because they're risky and only for investors who know what they're doing.

What Is Technical Analysis?

You can usually spot technical analysts by just looking at their computer screens. Rather than having earnings reports and industry profiles on the display, a technical analyst's screen is filled with stock charts. If you ...

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