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2006 :
VII
VIII
IX
X
XI
XII
2007 :
Jan
Feb
Mar
Apr
May
June
July
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So how does a new trader begin to understand the basics of the current market trend? First, try with these few basic guidelines that hold true at any experience level. Moving averages are always a good guide to use to help you establish the current trend. Are the 20 and 40 rising or falling? Are we above or below the 200? Is the 20 above the 40? Is the 40 above the 200? Are we in a pattern of higher highs and higher lows or are they starting to even off showing the potential for a base to form?
Many traders like to be market "gurus" and nail every twist and turn in the market. But a wiser choice is to follow a plan, play proven strategies, and always keep a close eye on what the market has done to help you determine your best course of action in the future.
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Pattern Cycles: Tops
No trend lasts forever. Inevitably, crowd
enthusiasm outpaces a stock's fundamentals and rallies stall. But topping formations
do not end uptrends all by themselves. These stopping points may only signal
short pauses that lead to higher prices. Then again, they could be long-term
highs just before a major breakdown.
What hidden patterns can you use to identify and trade reversals before your competition sees them? Successful short-term traders get in the reversal door early and allow the herd to trigger sharp price movement. Familiar trend-change formations, such as the Head & Shoulders and Double Tops, take so long to develop that many profitable entries pass before they finally signal an impending break to the waiting crowd.
Read More...
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