Profits in the Stock Market by H.M. Gartley was originally published in 1935. To get the most out of this discussion, the whole books, should be carefully reviewed. To gain the greatest benefits, two complete re-readings are suggested. Experience has indicated that such re-readings will enable the average person to find a wealth of material, part of which he has passed over, and part of which has been obscured by the great mass of detail. Now, with the entire Course in mind, the reader may hope to gain a great deal by this review of the whole Course.
In Chapter I, great emphasis was laid upon the necessity for a plan of operation. In reviewing the Course, the following outline, classified according to the twoprimary problems, namely “When” and “What” to buy or sell, may prove a useful guide.
If the reader will consider the entire course from the viewpoint of this outline, he will be preparing himself for a systematic approach to technical studies. Let us examine the general aspects of the outline. In section I, we find listed, under the heading “The Background”, the three trends and the Dow Theory. Together they are the foundation of the “When” study.
Once a technical student is conscious of the trends and the current implications of the Dow Theory, he has made the first step in making a market commitment.
Next, we find section II, under the heading “The Working Tools”. These are market phenomena which develop as the trends unfold. They form the remaining part of the “When” question study.
Once decisions have been made concerning the outlook for the future course of the market, the technical student is then ready to give serious consideration to the “What” question. This we find in section III, under the heading “Comparative Studies”.
As the market is so complex, and includes such a vast number of individual units, the process of filtration is essential. This consists of studying groups of several stocks each, which are properly classed in a single category. First, it is necessary to decide which groups are outstanding in the direction of the market, indicated by the “When” studies. This having been accomplished, the next step, of course, is to make individual selections. By this process, the “When” question is logically answered.
Under the fourth general heading, termed “Figure Charts”, we have an entirely different mechanical approach, in that a series of charts, constructed in a different manner, are employed. For the most part, the “When” question can be studied in similar fashion on figure charts, as on line or bar charts. The first problem is to select minimum figures, which will reflect the trends, and emphasize the appearance of the working tools. The study of the “What” question by means of figure charts is a very different proposition. In this, the methods available are not nearly so comprehensive as in the “What” question studies employing line or bar charts.
The figure charts may be used as a separate approach, or in conjunction with the study of the other types of charts. Last of all, listed as the fifth category in the outline, under the heading “Mechanical Details” are the accessory divisions of the study. These can have an important effect upon the technical study interpretation, because the type and number of charts used can broaden or limit the point of view, and thus materially effect a trading program.
The Most Important Decision:
When the average reader decides to begin technical studies, he must decide one big question. At the outset, he must determine in which trend he is going to be most interested. Either he is to be a major trend trader, an intermediate trend trader or a minor trend trader. Whichever it is to be, his studies must be selected and designed, and his market analysis laid out, for the particular trend in which he chooses to be interested.
The average man engaged in another business, is smart if he confines his interest to either the major or intermediate trend. In the end, attempts to catch the short swings, while engaged in another business, are fatal to the capital account. From the viewpoint of technical studies, regardless of which trend the trader may be interested in, there are certain practical steps which must be made, none of which can be avoided.
- Section 1 – The Technical Approach to the Problem of Stock Trading
- Section 2 – Charts-The Averages
- Section 3 – A Chart Portfolio
- Section 4 – The Long Term and Major Trends
- Section 5 – The Intermediate Trend
- Section 6 – The Minor Trend
- Section 7 – The Tenets of the Dow Theory
- Section 8 – Tops and Bottoms, Supply and Demand Areas, Reversals
- Section 9 – Triangles
- Section 10 – Trend Lines
- Section 11 – Moving Averages
- Section 12 – Gaps
- Section 13 – Net Change Oscillators
- Section 14 – Volume of Trading
- Section 15 – Breadth-of-the-Market
- Section 16 – Figure Charts
- Section 17 – Comparative Group and Stock Studies (Selecting the Right Stocks)
- Section 18 – Profits in the Stock Market (Summary)