back start next
[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [ 15 ] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72]
15 420O - 4000 - 3800 600 It". TQ 20/20 © 199T CQC Inc. Figure 5.1 Daiiy bar charts of December 1 990 Gold Futures -what isthetrend in gold? There are three trends which are marked and clarified in Figure 5.2. December 1 990 Gold Futures Daily Bar Chart 4 200 -4000 3800 3600 5 4500 4 3 500 I- "I" il„ ,1 III ly-"it,„H ".1 1 /14/ Il : 111...... 9/ / 0 JUN JUL OCT IAN APR JUL OCT AN APR 1989 1990 TQ 20/20 91991 CQG Inc. Figure 5.2 Daily (top) and weekly (bottom) bar charts of December 1990 Gold Futures-the three trends. The long-term trend (months to years), indicated by line A on the lower chart, is down. The intermediate-term trend (weeks to months), indicated by line B, is up. And the short-term trend (days to weeks), indicated by line C, is down.
DI WEEKLY BAR CHART 30000 25000 20000 15000 Higher Hihs Intermediate Low Higher Lows 1 01 APR JUL OCT jAN 1988 APR JUL OCT )AN 1989 APR )UL OCT TQ 20/20 91991 CQG Inc. Figure 5.3 The Dow Jones Industrials Weekly Bar Chart-the Dow in an uptrend (bull market). An uptrend is a price movement consisting of a series of higher highs and higher lows. can accurately time your buys and sells to maximize profits and minimize losses in any market. From Dow Theory, I have abstracted the following definitions: Upward Trend-An upward trend is a series of successive rallies that penetrate previous high points, interrupted by sell-offs or declines which terminate above the low points of the preceding sell -off. In other words, an uptrend is a price movement consisting of a series of higher highs and higher lows (see Figure 5.3). Downward Trend-A downward trend is a series of successive declines which penetrate previous low points, interrupted by rallies or increases which terminate below the high points of the preceding rally. In other words, a downtrend is a price movement consisting of a series of lower lows and lower highs (see Figure 5.4). If you leam anything from this book, leam these definitions. They are very, very simple but also of cmcial importance. These definitions are completely general in that they apply to any market and to any time period. I think it is simple to see from the hypothetical figures that following the trend is the
way to make money in the financial markets. What is not quite clear in the definitions is how you determine Gold Futures 1990 Weekly Bar Chart Price 5000 - 4500 - 4000 - 3500 Lower Lower Lowe APR JUL OCT IAN APR UL OCT AN APR JUL OCT 1988 1989 TQ 20/20 1991 CQG Inc. Figure 5.4 The 1989 Gold Futures Weekly Bar Chart-gold in a downtrend. A downtrend is a price movement consisting of a series of lower lows and lower highs. where the previous high and low points are. This depends totally on whether youre focusing your trading activities in the short-term, intermediate-term, or long-term trend-that is, whether you are trading, speculating, or investing. No matter what market or what time period you participate in, you wont make money (except by
[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [ 15 ] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72]
|