When we discover a new technique we jump too fast to trade using that new, not fully learned concept. With our excitement on overdrive we run with this new technique without taking the time to make sure we have the whole process learned. I know, for me, it is really easy to assume I know something new, I jump to the using step immediately but I have not learned the concept in sufficient depth. I end up forgetting the "practice perfectly before using real money" step, with terrible consequences.

It is so easy to slip into new techniques that it is very important to, at least once a year, review the basics of charting. I remember one time when I had been trading for a few years, and it was time to do my review. After taking a review class on technical analysis (which only means "how to read the charts" they use big words to scare us away) it hit me like a rock that I had completely forgotten to use support and resistance and I was only trading from other technical indicators. I find that identifying support and resistance enhanced with candlesticks is my most important and number one consideration before trading any stock. It's a basic concept that is the foundation for successful trading.

I want to encourage you to do a solid review of the basics. There is a great review on THE DEDICATED TRADER, and we have a great class taught by Markay Latimer that I am going to take in Toronto this year, for my annual review. Markay is an awesome trader and technicals are her big thing. I don't have time to share with you the details of these sources but if you are interested just call 1-800-290-7020 for details, be sure to mention this article so you can get the best price.

What follows is a review of only a few of the basics. Because space is small, I will have to simplify and be brief.

FINDING SUPPORT AND RESISTANCE

Most of the time, I look for support and resistance by putting my one day timeframe chart into a line chart. The line chart shows the market closing price, which is generally assumed to be the most accurate for the day, because amateurs open the market with market orders and professionals are considered to close the market resulting in prices that are more reasonable.