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

COMBINING THE FOUR DIMENSIONS

We have described the usefulness of each of the four price-related dimensions: patterns, volume, price momentum, and price and moving averages. While an entry or an exit may be considered in terms of each dimension individually, a trader who is biased toward only one of these dimensions will probably experience a higher number of losses. But a trader who is patient enough to look for a proper balance among the four dimensions will definitely find better results.

We have included a simple scorecard in this chapter (see “Keeping Count”) for use in combining the four dimensions as a total approach. The first step prior to making any decision is to see if there is a possible trade. We want to trade in the direction of the higher time-frame trend. The easiest way is to look at the weekly price chart. There is no need to go through every detail in the weekly chart. It will be sufficient to look at three factors: the weekly price momentum, weekly price and relative moving averages, and the position of the current weekly price relative to its recent historical prices. If we are considering a trade entry, we would want to see that the weekly price momentum is not overbought, and is not bearish, and that the weekly moving average is gaining strength at a level of support. Comparing the current weekly price relative to its historical prices will give traders a sense of the probable move, and where the significant support and resistance levels are in a longer ...