Trading Olympics: Event 1 - Chartology

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More than just a thirst for gold unites Wall Street traders and Olympic athletes. For either to succeed, they need stamina, drive, and discipline. And both have their secret weapons. Swimmers have the Speedo LZR while the fast money has the charts -- also known as technical analysis.

In fact, technical analysis is used by a majority of folks on the Street but few like to admit it. With it's complete disregard for fundamental analysis and use of indicators like Fibonacci (named for a medieval age mathematician) it still has a voodoo connotation to it.

But despite what vocal skeptics say, trading with charts has never been more popular. And without it, you could lose your trading edge. However there are a few terms you should know...

Trendline

A line on a stock chart that depicts the general direction in which the security is headed. Connect the lowest points of the uptrend, explains Jeff Macke. That gives you a nice entry point and once the trendline breaks, I take it as a signal to sell.


Support

Symbol
Price
 
Change
%Change
GS
---

The price level at which, historically, a stock has had difficulty falling below. Goldman Sachs is a good example of this at the $150 level, Macke adds.


Resistance

Symbol
Price
 
Change
%Change
WMT
---

The price level at which, historically, a stock has had difficulty climbing above. Wal-Mart is a good example of this trend at $60, Macke says.




The price level at which, historically, a stock has had difficulty climbing above. Wal-Mart is a good example of this trend at $60, Macke says.







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Trader disclosure: On Aug 18, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (CSCO) Call Spread, (SNDK) Call Spread, (ZMH) Call Spread; Macke Owns (MSFT), (UUP), (WMT), (COST), (DIS), (ATVID); Finerman Owns (GS); Finerman's Firm And Finerman Own (GLNG); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (VCLK); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY), (BBT), (COF): NBC Universal Is The Parent Company Of CNBC