5 Ways to Improve Objectivity Using Technical Analysis

Note:  This lesson is meant to help you learn from the market and does not serve as investment advice for any specific group or individual.  For more information, please read the HSR Terms of Use.

5.  Keep a Weekly Summary of the Market's Activity

At the end of each week, what markets and sectors were involved in the up/down move?

Were the market internals strong or weak?

These are just some of the questions that you may want to have answers for if your goal is to be more objective in your stock market research.

Being current on the market can help you stay objective only if your weekly summary is taken from market facts (stock/index charts).

Weekend TV shows and other outlets that aren't based on market facts (charts) can be misleading and cloud your mind.

I complete a fact-based review each week that you can get for free here.

My weekly summary is only a secondary indicator (you still need to primarily focus on individual stock charts), but it helps you get started on your weekend homework and gives you some direction to look for strength/weakness in sectors/stocks.

Increase Objectivity with Market Facts (Price and Volume)

To summarize, technical analysis is an essential way to look at the market because it allows you to quickly screen the market's majority opinion on a stock, index or sector.

However, the analysis of the market may be incorrect because of an individual/group opinion.

For individuals/groups providing technical analysis, greater objectivity may be reached using the items outlined in this lesson. 

All are based directly on current/historical market facts (price and volume of stocks, sectors and indices), which helps you focus on the market itself and minimize a biased outlook.

Try them out and feel free to contact me if you have any suggestions for improvement or questions.

For those relying on technical analysis for risk management, before using it, you may want to find out how your source stays objective during the research process.

Ideally, stock research should be built around identifying market facts in order to compose an objective outlook that's based off of the current market. 

While pure objectivity is nearly impossible, you should feel confident that your research provider is telling you about the market and not their personal opinion.