Hi David,

I would like to congratulate you on your wonderful series of lectures on INFORMEDTRADES.COM. I have enjoyed them very much....

I am relatively new with the market as far as technical analysis is concerned. However, having watched your videos and under the present worldwide market correction I have decided to use technical indicators in my future dealings. For that I was wondering what your suggestions would be in terms of technical tools to be used for a small trader with a capital of 400k, a portfolio of normally 10-15 stocks which are generally blue chip companies, medium to large cap, and mainly in European, in particular the Spanish market (IBEX 35), who can spend as much time as necessary on the trades and also who is not planning to become a millionaire overnight and not too unfamiliar with losses on the stock market.

Given this scenario I have been thinking of using the following tools:

1. Overlaying the Bollinger Bars and Moving Average onto the initial price chart
2. Combining the MACD AND MACD Histogram underneath
3. Followed by the DMI/ADX
4. Finishing with Stochastic Oscillator on the bottom.

I would appreciate your comments on the suitability of this choice of tools for this scenario or perhaps if you have any better suggestions.

I look forward to hearing from you.

Regards DNice1

P.S. Love the accent! Keep up the good work.

Hi DNice1,

Thanks for the compliments I am glad you enjoy the videos.

Are you from Spain? I ask because you write english better than most native speakers that I know.

I think its important to start by saying that I can't give individual advice since I am not a financial advisor, however as long as this is simply for educational purposes then I am more than happy to discuss this with you.

The first thing that I would say it is important to understand, and which you may already, is that I always keep my trading accounts and my investment accounts seperate. On this site I talk pretty much only about trading which is why I talk about moving in and out of positions and have a heavy emphasis on technical analysis. I say this because from your description below it sounds like this is more of an investment account for you, but one in which you may want to add some trading components into so you can avoid large drawdowns like you saw recently.

If this is a correct interpretation then I do believe that investors can benifit from combining technical analysis into a fundamental approach to where they put their money and I think that all of the tools that you have mentioned below could potentially help with that.

To give an opinion on wether or not I feel you are heading in the right direction with those tools however I would need to know a little more information on why you have chosen the technical indicators you have listed below, or in other words what you are looking for each to tell you about the stocks you are involved in.

Secondly, are you looking at anything else on the charts such as trends and/or support and resistance levels?

Look forward to discussing with you further.

Best Regards,
Dave