This website is going to change the way
you trade. Let us help you become a better trader through
technical analysis and swing trading. Get ready to make
some money...
Sophisticated technical
indicators evolve from simple data inputs of price and time.
While most traders understand how price patterns reveal hidden
opportunity, many fail to comprehend how time impacts both
tactics and results. Lacking a skilled understanding of
opportunity cost, they misinterpret signals and waste valuable
resources. Or, trapped in common trend relativity errors, they
prepare trades in one time frame but execute them in another.
Opportunity cost
defines how the trader manipulates working capital.
For example, this important concept reveals why
cutting losses efficiently is so important for long
term survival. By its nature, taking any stock
position dictates that those funds will not be
available for another trade. This becomes a critical
issue on account drawdown's when individual trades
can dictate success or failure for the aspirant.
All
trends in the markets are time frame
specific. For example, the existence
of an uptrend in a daily chart says
nothing about the trend in the
monthly or intraday chart. This
highlights the importance of correct
time input in preparing technical
indicators or reading chart
patterns. When improperly
time-tuned, technical analysis loses
its effectiveness. Alternatively,
resonant time readings will evoke
startling accuracy with otherwise
mediocre data input.
Time Summation of indicators falls into
three general categories: .
- Moving averages of elements such as price
or volume
- Relationships between the open, close,
high and/or low of individual bars
- Repeating cycles of price or volume
behavior
Time Period of indicators falls into three
general categories:
- Short Term
- Intermediate Term
- Long Term
Individual units of time are best viewed as
relative periods, as opposed to daily,
weekly or monthly lengths. Since no two
technicians trade in exactly the same time
frame, patterns and indicators must serve a
broad range of uses. Fortunately, technical
analysis studies a fractal market. Valid
predictions may be made with indicators
developed from 5-min bars or monthly ones in
exactly the same manner. But don't be
fooled: prediction can only be made in the
same time frame as the tools being used to
study it.
Trend
Relativity: Trends are dependent on
the time frame in which you are
viewing them. While IBM shows a
promising reversal taking place on
the intraday, the daily and weekly
show a major correction in progress.
Notice how the weekly reveals an
excellent buy point at the top of
the multiyear price channel, a
support level completely missed on
the daily chart.
