When I was picking stocks to post on
to my blog yesterday; I did not draw the trend lines that I usually draw on the stock chart. As a result my
trade weren't
as accurate and one of my picks failed.
as accurate and one of my picks failed.
 |
| The chart pattern is near the bottom of an uptrend trend. The MACD indicator were pointing downwards. The Stochastics pointing downwards too. |
Stock Name: ADP (Automatic Data Processing Inc)
Action: Short
Price: 53.21
Action: Short
Price: 53.21
End Of Trade; 53.45
Result: +0.24
Failed
Trend lines are important because they tell the trader where
the stock is going to bounce off of. Since I did not draw the trend lines
and was only looking at the Stochastic and MACD indicators. I did not know that
the stock pattern was near the bottom of the trend line. If I had drew the trend
lines I would have notice that the stock pattern was near the bottom of the
trend line and wouldn't have picked this stock (ADP) to trade.