Trade to Win: Proven Strategies to Make Money

Chapter 4. Commonsense Market Indicators

"There are lies, damned lies, and statistics." Mark Twain apparently had little regard for the power of mathematical analysis and numerical gauges. In this computer age, it is possible to statistically analyze just about everything relatively quickly. Twain would no doubt be amazed to see all of the information that one is able to obtain with just a click of a computer mouse. There is a chart, curve, diagram, or some other computer-generated graphic for everything. Market analysts track all sorts of numbers and data. There is so much information available that one can easily become overwhelmed. One chart says to buy and another says to sell. One identifies a top and another one points to a continuing trend. Even with so much available, it is difficult to identify indicators that sort through the noise and present helpful information. If one is looking at too many numbers and figures, it is not difficult to become confused. Confusion generates paralysis. It is impossible to know what to do. Like swimming in a sea of swells, it is easy to become overwhelmed and sink in the ocean of data.

For that reason, I have identified some specific indicators that I continuously monitor. In conjunction with time and key numbers, I use these indicators to find my way through the labyrinth of Wall Street. Experience has taught me that if I keep my eye on these indicators, I am able to put the odds of success in my favor. The first indicators that I monitor ...