Timing Solutions for Swing Traders: A Novel Approach to Successful Trading Using Technical Analysis and Financial Astrology

CHAPTER 7

Applied Systems

There is not going to be any disagreement when it is said that the market is complex and chaotic. Sometimes the market rises dramatically and sometimes it falls drastically. A rising market is followed by a declining market that is again followed by a rising market, and the cycle repeats again and again. But these cycles do not happen or repeat in uniformity. There is no reliable way to predict precisely when the next direction of the cycle will take place or how long it will last. Prediction of a longer-term cycle is made even more difficult by movements of smaller cycles. Elliott Wave practitioners believe these cycles are the result of psychological reactions of market players. Economists maintain that all these movements and cyclical patterns are caused by economic factors. Financial astrologists believe these cycles are influenced by various planetary movements. Yet, in its chaotic behavior, the market seems to conceal elements of order, displayed at times in symmetrical and harmonic patterns.

These patterns become the catalyst for technical analysis, which is based on the premise that prices tend to move in trends. Simply put, this means that once a trend of the share price is established, the next move of the share price is more likely to continue in the same direction. In other words, if a share price is firmly established in a bull trend, the share price is more likely to continue increasing rather than decreasing in the next trading period. Most ...