Sentiment Indicators - Renko, Price Break, Kagi, Point and Figure: What They Are and How to Use Them to Trade

Chapter 13. Beyond the Trend: Cycle Indicators Independent of Time

The aim of this chapter is to present in more detail how the cycle indicator can become an important addition to technical analysis.

A goal of this book has been to advance the ability of traders to detect price patterns and discern when they change. The conventional method has been to use charts that filter out time in looking at price movement, and to detect changes in the trend condition of a price. We certainly know now that price break, Kagi, Renko, and point and figure charting help clarify detection of changes in price patterns from different vantage points. These charts create boundaries or landmarks that verify changes in the price direction or pattern. But are they enough? How can the trader uncover even more about the price behavior that is being evaluated?

Luckily, the quest for knowledge that can give the trader an edge doesn't stop with candlestick, price break, Kagi, Renko, or point and figure. There is a new generation of advanced technical indicators that can also enable the trader to detect hidden patterns in price data. Some of these indicators come from physics, and others come from the field of manufacturing control. Few traders have heard of them because they are used as research tools, and only now are coming into the hands of the trader through retail software products. Traders should seriously consider them, because when used alone or with alternative charts, these indicators provide new insights ...