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A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits by Michael C. Thomsett

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Momentum and Timing of Preceding Trends

Another way in which prices evolve is through a short-term cyclical pattern of movement. This often involves waves of alternating bullish and bearish secondary trends or swing trends. These are ideal for swing trading, but for the longer-term direction, you need to review a period longer than six months.

Key Point

Momentum is effective in identifying the rhythm of short-term trend cycles, whether swing trends or secondary trends.

The chart in Figure 7.5 contains no fewer than seven sets of signals over six months. The price pattern alternates between uptrend and downtrend.

Image

Figure 7.5 Cyclical secondary ...

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