Chapter 2. The Basic Principle of Technical Analysis—The Trend
By the end of this chapter, you should be able to
• Define the term trend
• Explain why determining the trend is important to the technical analyst
• Distinguish between primary, secondary, short-term, and intraday trends
• Discuss some of the basic beliefs upon which technical analysis is built
How Does the Technical Analyst Make Money?
In order to make money using technical methods, remember:
• “The trend is your friend”—play the trend.
• Don’t lose—control risk.
• Manage your money—avoid ruin.
What Is a Trend?
A trend is a directional movement of prices. For a trend to be useful, it must remain in effect long enough to be identified and still ...