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

CATCHING THAT TREND

Catching the trend, whether it is an uptrend or a downtrend, is the key to profits because, if we can catch it, half of our work is completed. However, understanding the forces at work in trending and non-trending markets, and the transition from one phase to the other phase, is the most difficult task. An uptrend means a series of higher highs and higher lows. Each high is followed by a higher high and each low is followed by a higher low. A downtrend means a series of lower highs and lower lows. Each high is followed by a lower high and each low is followed by a lower low. Defining whether a trend exists will be subject to the trading time frame of the trader. For instance, let’s assume a scenario in which a stock closes at its high of $10 with an opening of $10, and that its low for the day is $9. The trading time is four hours. With the stock opening and closing at $10, it would appear that there is no trend for the day. However, if we look at the minute chart, there will be a downward trend and an upward trend in a period of four hours’ trading time. At the opening bell, sellers push the price downward to $9, the low of the day, where it finds support from buyers, who push the price upward to close at the high to form a dragonfly doji bar. This example is an illustration of intraday trends and it exemplifies that trend is valid only for the relative time frame in which it occurs.

Market prices tend to behave irregularly at different periods. A market tends ...