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Katie Stockton Started with Technicals in College

Sep 8, 2017

Guest

Katie Stockton

Katie Stockton, chief technical strategist at BTIG and a Chartered Market Technician, started studying technicals in college. She discusses why charts and trend-following drive her top-down work. Topics include falling market volume, favorite indicators like MACD and Fibonacci, the limits of sentiment tools, and how technology and passive flows reshape technical analysis.

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insights

INSIGHT

Three Indicator Classes For Inflection Signals

Stockton categorizes indicators into three classes: momentum/trend, overbought/oversold, and relative strength.
She uses overbought/oversold tools like stochastics and DeMarc to detect trend exhaustion and inflection points.

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ADVICE

Skip Elliott Wave Use Fibonacci For Support

Avoid overreliance on Elliott Wave and cycles; they can bias you toward bearishness.
Use Fibonacci as a support/resistance tool when moving averages or prior peaks/troughs aren't available.

insights

INSIGHT

Technology Made Charting Systematic

Advances in software and computing make technical analysis far more systematic and scalable than hand-charting.
Stockton expects AI and quantitative approaches to increasingly blend with price-based technical tools.

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Katie's Technical Origins and Education

02:54 • 2min

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Why Charts Over Fundamentals

05:06 • 2min

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What Technical Analysis Measures

07:34 • 2min

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Role and Process of a Chief Technical Strategist

09:15 • 2min

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Trend Following and Identifying Exhaustion

11:17 • 1min

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Indicators She Avoids and Uses

12:32 • 3min

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Point & Figure vs Bar Charts

16:02 • 4min

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Technology's Impact on Technical Work

20:12 • 1min

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Award Recognition and Client Use Cases

21:31 • 2min

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Deliverables: Weekly and Daily Research

23:21 • 3min

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How Frequently Views Change

25:53 • 1min

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Currencies: Dollar, Euro, and Trends

27:03 • 3min

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Analyzing Bitcoin and Parabolic Moves

Charting Sentiment and Volume Today

33:17 • 4min

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DeMarc Indicators and Inflection Points

37:13 • 2min

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Favorite Tools: MACD and Timeframes

39:10 • 3min

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2015–2016 Range and the 2016 Breakout

42:32 • 1min

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VIX, Complacency, and Pullback Signals

43:54 • 2min

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Passive Investing's Market Impact

45:52 • 1min

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Using Sentiment Effectively and Its Limits

47:20 • 3min

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Put-Call Ratio and Market Internals

49:58 • 2min

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Charts Preventing Narrative Bias

51:43 • 1min

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Personal Background and Mentors

52:44 • 4min

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Books, Reading, and DeMarc Literature

56:59 • 2min

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Industry Changes and Future of Technicals

59:28 • 2min

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Failures, Lessons, and Career Advice

Advice for Aspiring Technicians

01:03:49 • 2min

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What She Wishes She Knew Earlier

• Mentioned in 5 episodes

Technical Analysis of Stock Trends

W.H.C. Bassetti

Robert D. Edwards

John Magee

This book is a classic in the field of technical analysis, providing a methodology for interpreting the predictable behavior of investors and markets. It covers in-depth discussions on Dow Theory, reversal patterns, consolidation formations, trends, channels, and technical analysis of commodity charts. The book also includes expanded material on Pragmatic Portfolio Theory, Basing Points procedure, and modern investment technologies. It is an indispensable resource for technical traders, investors, and finance professionals, offering practical advice on stock selection, charting, risk management, and portfolio diversification.

Technical analysis explained

The Successful Investor's Guide to Spotting Investment Trends and Turning Points

Martin J. Pring

This book provides a detailed explanation of technical analysis tools and methods, including chart patterns, trend lines, moving averages, momentum indicators, and volume measurements. It teaches how to identify trends, reversals through peaks and troughs, and apply these techniques to make informed trading and investment decisions. Widely regarded as a foundational text, the fifth edition covers principles for both novice and experienced investors to maximize profits in complex markets.

#806

• Mentioned in 43 episodes

Reminiscences of a stock operator

Edwin Lefevre

This book is a classic in the realm of stock market literature, detailing the life and trading experiences of Jesse Livermore, a legendary trader, under the pseudonym 'Larry Livingston'. It explores Livermore's journey from his early days in 'bucket shops' to becoming a prominent figure on Wall Street. The book highlights the importance of understanding market psychology, the dangers of overtrading, and the need for discipline and independent analysis in trading. Despite being written nearly a century ago, its lessons on market dynamics and human nature remain relevant today.

#38

• Mentioned in 275 episodes

Hillbilly Elegy

A Memoir of a Family and Culture in Crisis

JD Vance

In 'Hillbilly Elegy,' J.D. Vance recounts his life growing up in a dysfunctional family in Middletown, Ohio, with roots in Kentucky's Appalachia. The book details his experiences with poverty, addiction, and family violence, as well as his journey to joining the marines and eventually graduating from Yale Law School. Vance provides a personal and insightful look into the decline of the white working class in America, exploring themes of family, culture, and the loss of the American dream. The memoir also touches on the political swing of the region, particularly in relation to the 2016 presidential election and the appeal of Donald Trump to this demographic.

Not many strategists begin studying technicals in college, but that was the route Katie Stockton took. As an undergraduate at the University of Richmond, she studied graduate level coursework in technicals, eventually becoming an intern at technical analysis firm Dorsey Wright.

Stockton discusses how the total volume of stock-market trading has fallen since the financial crisis. Is it algos or indexing or HFT causing the fall-off? Some combination of all of the above? She describes her favorite indicators (Trend, Fibonacci, etc.) and some of her not-so-favorites (Elliot Wave).

As chief technical strategist for BTIG in New York City, she looks at the world as a top-down analyst, considering everything from interest rates to stock prices to economic indicators. But she keeps coming back to charts and the trend as the dominant factor driving all of her analysis. Her work led her to win the 2017 Best Institutional Brokerage for Equity Research at the 2017 Technical Analyst Awards.

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