2. Statistically Speaking—Trends by the Numbers
Trend analysis is based on technical attributes of price movement, but it is, and should be, much more. This chapter examines and explains the attributes of trend analysis based on probabilities and statistics.
Some primary points to remember are the following:
• Statistically, no trend continues forever, but some technical traders forget to look for signs of plateau or slowdown in the trend.
• While a price moves higher, traders need to also track other indicators to determine when stocks are getting too expensive, based on P/E ratio among other signals. In this regard, the trend works as an aspect of valuation, which is easily overlooked if a trader’s focus is only on the price of stock.
• While ...
Get A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
