Quick Overview:

John Murphy is a senior analyst at StokeCharts, a well-known author and columnist for technical analysis.

Before joining Stoke Shares, John Murphy (seven years) worked as a technical analyst at CNBC's economic channel Tech Talk.

John Murphy has several books and workshops on video and DVD ... Three books have set records in their sales:

Technical Analysis of the Financial Markets

Intermarket Technical Analysis

The Visual Investor

He also has 30 years experience in trading and technical analysis ... During these 30 years John Murphy has developed several methods of trading by adhering to established rules or laws set for himself (this is what we will talking about)

John Murphy's Trading Rules:

1. Trends should be defined: Start by analyzing the larger frames on the chart, such as the homosexual and wickle over a period of years. Then start analyzing the smaller frames. Analyzing only using very small frames can give you a deceptive result and seeing your bigger frames will improve your performance.

2. You should notice the trend and move with it: Follow the direction of the market after you notice it as the market trend comes in multiple sizes (long-term, medium, and short-term) Select the time period you are targeting first and then use the appropriate frame for you ... Trend (ie market trend).

If you are targeting a medium-term period (Swing), you must weekly chart (Wickley) and the daily chart (frame Daily) ...... If you are targeting a shorter period of time, you need less Fermat (60, 30, 15, 10, 5) In any case, let the larger frame determine the direction and then use the lower frames to control the trading process.

3. There should be a top and bottom trend: by identifying support and resistance levels, where the best time to buy is at a level close to the support level and the best time to sell is at a level close to the resistance level.

4. You need to know how far you have to go back: Measure the percentage retracements (Fibonacci) Usually market movements or corrections, either up or down linked to certain ratios (namely the Fibonacci ratios) of the previous movements of the market.

5. Draw trend lines: It is one of the influential tools as it requires passing at least two or two tops and often breaking trend lines (trend) signal to change direction ... If the trend line or trend has three bottoms or three peaks and more is a certain trend line. The more this line is tested, the more important it will be.

6. Follow the averages: Moving averages give you moving averages Buy and sell signals, they tell you whether the trend (ie, the direction of the market or the stock) is still in place or not, as it helps you to know the signals to confirm the trend change. The averages do not tell you in advance what will happen, but they are sure signs of direction. Mixing two averages together in one chart is one of the most popular technical studies such as the average 4 with the average 9 - the average 9 with the average 18 - and the average 5 with the average 20) It gives you a buy signal at the intersection of the small medium for large up, and it gives you a positive signal if the price The stock (or index value) is above the 40-day average, and since the averages are subsequent trend indicators, they work best when the market index or stock is clearly defined.

7. You must learn when the reversal is: by the oscillators of the path ... These indicators help you to know if the purchase is overbought or if the sale is excessive (oversold) and the most famous of these indicators RSI) And Stochastics indicators ... As for how we know the reflection through these indicators is done by identifying the positive and negative differences (Divergence) .... You can use the signals given to you on the frame Alwakli as an important point on the frame Aldli ... And references on the frame Daily as an important point on the frame 60 ... and so on. These indicators are more effective when consolidating.

8. You should know the warning signs: The MACD helps you. When the fastest line breaks up the slowest line and both are below zero, this is usually a buy signal, and when the opposite happens (that is, the fastest line goes down the slowest line) and both are above zero. This is a sell mark. Take advantage of intersections on the Wiki frame to be important signals on the Daily. There is also the MACD Histogram indicator which gives you signals in advance about the MACD indicator.

9. Trend or not? There are indicators to help you know if the indicator or arrow is in a clear direction (trend) or not, and it measures the strength of the trend ... so you should know how to differentiate between a clear and unclear trend. ADX indicator helps you to do this .... If the ADX line (black line) is going up, this gives you an indication that the arrow is in a clear direction (trend) and here you can use the averages (moving averages) to give you more effectiveness ...... But if the line ADX In the downward direction, we conclude that the stock is fluctuating or consolidating. In this case, we use Stochastics & RSI path oscillators as its effectiveness in volatility is greater. Thus the trader knows which indicators are used according to the stock model or market index.

10. You must know the confirmed signs: The volume of trading (volume) of the most famous signs confirmed ... When the market or the stock in an upward trend (uptrend) you will see that the amount of trading is high at the tops of the trend. The follow-up of the amount of trading in the futures markets (futures markets) and in the supermarket is important, it gives indications of the status of the market or the stock.

Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.

- John Murphy

Technical Analysis Skill develops with experience and study, be a student of knowledge always and continued learning.

- John Murphy

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