Chapter 21. Selection of Markets and Issues: Trading and Investing

Chapter Objectives

By the end of this chapter, you should be familiar with The major factors to consider when choosing a security to trade The major factors to consider when choosing an investment security The relationship between hard asset and soft asset markets The basics of intermarket analysis The concept of relative strength among different investment vehicles and its implications for investors The basic methods of determining an individual stock’s relative strength

We have now reached the stage in technical analysis where we become more practical. After learning how to analyze the long-term stock market and how to use various technical tools to determine the best entry and exit points in individual issues, we now focus on exactly what issues to consider for trading or investment goals. Those interested in using technical methods in markets must determine whether they have the time, inclination, and facilities to trade issues, or whether they want to consume less time and utilize technical methods for investing over longer periods.