Stock market trading in the 21^st century is much different than what it used to be. Gone are the days of the old time technicians and the way they used to take trading decisions. There are today new thoughts in the market, and new theories, and some of this involves the practice of chaos theory and behavioral finances as well. Those who are experts at this are often referred to as the ‘third-generation technicians’. The traditional way of carrying out trading decisions based on judgment, pattern, feel and intuition has been challenged by the new technical analysis approach.

Let us now take a look at the old attributes and the knowledge and skills involved, and compare them with the new approach.

Old Attributes

• Intuitive
• Deterministic
• Apocalyptic

Intuitive: Selling and buying decisions were made based on experience and skill. This becomes very risky because there are some people who lead a pool of investors, and if the decisions based on intuition are proved wrong, then the value of all those investors in the pool go down too.

Deterministic: Stock market traders were convinced that in the market there were larger forces at work. Though in many cases it was possible to know about these forces and detect them, there was nothing to be done.

Apocalyptic: These were the people who were always prepared for a disaster or doom in the future, and thus their trading decisions were taken based on a lot of concern.

New Attributes

• Design
• Symphony
• Story
• Empathy
• Play
• Meaning

Design: This includes the use of checklists and schematics. Investors and market analysts make investment decisions based on market sentiments, volume, time and of course the price.

Symphony: Independent and interactive systems such as bell-shaped and S-shaped curves are used to find out about crowd behavior, market sentiments, volume, time and price.

Story: There is a story in the market and the keen observer can read this by following the selling and buying waves. Pattern recognition and chart readings help a great deal.

Empathy: Rather than analyzing the market from a distance, the trader should have a pulse of the actual market place, and be able to feel and hear from the vantage point of the man on the street.

Play: Repetitive market behaviors can be studied in detail to gain an insight, and this gives the trader the necessary understanding and skills.

Meaning: An attempt to try and gain a deeper meaning about why you are doing stock trading. This enables the person to take correct decisions about the trading strategy, clears the vision and eases the decision making process.

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