For anyone out there who has read "The Wealthy Barber" then you probably know what I am referring to, and if you haven't read this book, then I recommend you find a copy and read it as soon as you can. Plain and simple, the golden rule is "Save 10% of your income" nothing special there right? well, if you add a couple of extra things to it, it can become one of the most powerful wealth building tools available. You can read all about this in my article Easiest Way to Save Money AND Become Rich over at www.ImprovedLife.ca, but I will give you a quick overview right now.

Technical Analysis in its core is about supply and demand and how that drives stock prices up and down. Technical Analysts (also known as Technicians or Chartists) use charts and graph patterns derived from price history and volume data to try and predict what a stocks behavior is going to be like in the future. Market psychology (behavioral finance) plays a big role in technical analysis because most technicians hold to the fact that people are not rational and more often then not the majority of investors will make trades based on emotions, and it is this behavior that influences a stocks price to move in a predictable manner.

I wanted to add a short term pick, since we haven't put any up yet, so this morning I went to the charts. One of the first stocks my screeners came up with was TransAlta Corp. (TSE:TA) and looking at the technicals it looks like it should be in for a bit more of a gain within the next week or two.

I thought that I would share some of the resources that I like to use when looking for solid dividend based investments. For an introduction to dividend based investing, check out my article An Introduction To Dividend Based Investing. Please note that most of the links I provide here, are based on Canadian investments since I personally prefer to concentrate on the Canadian markets.

The Moving Average Convergence Divergence (MACD) indicator was created in the 1960s by Gerald Appel and was designed to follow momentum and display any trend changes that may occur. A MACD chart consists of plotting two lines: the MACD Line and the signal line. The MACD line is created by using this formula EMA(26) – EMA(12), where EMA(26) and EMA(12) are the 26 and 12 day exponential moving averages. The Signal Line is simply the EMA(9), or 9 day exponential moving average.

How does getting a cheque in the mail every four months for doing absolutely nothing sound to you? Well, if you are anything like me (and the majority of other people on this planet) then it sounds pretty good. So where do you sign up?