There is good news.   Technical analysis will help you increase your profits, or in many cases, it will help you reduce you losses.   Don't laugh! If you are trading in a bear market, you've got to be prepared for losses. Technical analysis will help you minimize your losses. Furthermore, it will help you maximize your gains.   If that's what you are looking for, you've come to the right place.   My goal is to help you become a better investor (in a bear market or a bull market) using technical analysis.

Do you need a computer?   Do you need the Internet?   It helps.   You could trade stocks, using technical analysis, with the newspaper, pencil, graph paper, and a phone (to call your broker).   The computer and the Ineternet are wonderful "tools" that simply take the place of your newspaper, pencil, graph paper, and phone.   If these newfound tools are used properly, you can maximize your ability to track more stocks.   Here's the catch; you will have more decisions to make.

Technical Analysis

Technical analysis is the study historical data to make a buy or sell decision today.   Technical analysis must be done on a periodic basis.   The higher the resolution, the more accurate the decisions.   That does not necessarily equate to higher profits.   You may make more trades to get the same results or even worse results.

Let's say two people both purchase a stock in January at $100; Person "A" is going to buy it and hold it for one year, and person "B" is going to minimize his losses using technical analysis.   Let's say the stock price goes up from January through April to $150.   In April the technical analysis person (person "B") gets a signal to sell, so he sells at $150.   The price of the stock falls a few dollars over two months, and in June it turns and starts to climb.   Person "B" gets a buy signal, and he picks it back up at $151 and the stock continues to climb to $200 and in October the technical analysis guy gets another signal to sell.   Let's say the stock stays flat for the remainder of the year.   At the end of the year, person "A" sells his shares and takes his 100% profit.   Well, person "B" (the person doing technical analysis who sold back in October) didn't quite make 100% profit, but here's the key.   Person "B"'s money was liquid for five months that year. Person "B" could have traded another stock using technical analysis to keep his money working for him.   If the original stock fell from $200 back down to $100 at the end of the year, then the guy doing technical analysis would have clearly come out the winner by far.

Technical analysis also gives you a rule for selling a stock. I've seen many people jump onto the DELL bandwagon. Picking the stock up at a 52 week high, and in a year, they could have sold for a 200% profit, but they didn't sell.   I've seen people pick up YAHOO at $100.   Those folks rode YHOO up for a 350% profit, but they didn't sell.   I saw those same people ride the stock all the way back down, and they didn't sell until they were loosing money.   Guess what, when they were loosing money, they had no problems selling their shares.   Do you know why?   I do.   It was pride, greed, and fear -- all of those wonderful emotions that waste a perfectly good profit.

Again, technical analysis gives you the ability to minimize your losses, and it gives you the ability to maximize your gains.   Furthermore, it removes the emotions from the decision to buy or sell a stock.   That, my friends, is the key to success on Wall Street!