Many years of observation, refinement, and analysis reveal the distinguishing characteristics of the four types of changing market:
1) The trading market changing to bear market
2) The trading market changing to bull market.
3) The bear market changing to trading.
Big and heavily capitalized traders who pyramid their positions have a decided advantage in massive bull trends-the markets go in one direction and take a long enough time to do it so that the traders can continually add to their long positions. In bear markets, however, the smaller trader makes a little money very fast: the market does not stay at one price long enough for the trader to add more to short side. The downtrend is quick and fast-if traders aren’t positioned early to the downside, they won’t be able to get into a short position when the collapse occurs.
There are two types of trading markets; bull markets and bears markets. Both of this trading markets are characterized by the same feature: prices traverse great distances in a short period of time. The move is violent and is in one direction. This one-directional moves may or may not be move according to high volumes. For a better technical grasp of the volume factor in this stage of market better to see how volume behaves in the various types of downmoves and upmoves.
Bull vs. Bear markets:
There are many subtle differences between the behavior of bull trends and bear trends which would require too much detail to explain here. However, one remarkable distinction is that bear market trends are fast and brief and cover great distances in a short period of time. True bull markets, however, are slow and long-drawn our affaires, covering great price distances and taking much more time to develop. Uptrends that are relatively quick and brief and also cover great distances in a short period of time are not true bull markets, but rather reactions in bear markets. Awareness of this fact should help the trader in determining whether or not an upmove is a true bull market of rather a reaction in a bear market.
All trading techniques are designed to give the trader actual buy and sell “ signals,” or indications that it is good time or price to buy or (cover a short) or sell or (go short) . Some methods also show at what future price traders should Start to buy or sell. Brokers need to know when price breaks that level.
Prudent traders also realize that even the best technique can get them into losing situations. These traders use “ stop-loss orders.” A stop-loss order is placed below the price of the entry order or above the price of an exit order. If the price goes against, them their brokers have an automatic order to close out the position when price reaches that stop-loss level, handing the traders a small, controlled loss. In this way, they avoid surprises and control their exposure.
The trader with a long-range view of market events will want to use the "top-down" trading. That is , Any one who will think of the market more in broad cycliic terms, and therefore let the cyclic tendencies govern, to some extent, the individual trades. The shorter-term, price- sensitive techniques, more appropriate for that particular market type and the techniques which are move appropriate to longer-range.
The trader with shorter-range goals will use a "bottom-up"Trading approach, focuding more on the techniques which work well for individual, short- term trades. Such a trader may bring in to longer-range consideration later, perhaps as a way of confiming suspicions about the market's short-term behavior.
Traders should think about general with a picture of the whole battlefield situation, ordering his soldiers to take up individul positions. The second thing is form the point of view of the soldier, unaware of the grand strategy, who is intrested in winning and surviving in each confrontation. If traders wonder which kind of trader to be they should just ramember that more soldiers than generals ger killed in ba
view market cycle and astronomical charts for cyclic time reversals. and inputs like price, time, and volume analysis perform convertional chating analysis. Apply swing chats and point-and-figure charts to filter price moves. Apply Stochatics, percentage ,Oscillators, and Relative Strength Price-sesitive Indicatiors. Use market profile pattern analysis to enter the market corretly on an intraday basis.
The techniques discusssed but it is not all equally well-suited for trading alll the phases of a market. Therefore, The techniques are grouped into one toolkit which can be applied differently to each of seven posibble marker situations:
* Bull to trading market transition
* Bear to trading market transition
* Trading to bull market transition
* Trading to bear market transition
* Bull market
* Bear market
* Trading market
The seven "Toolkit Application" it will gives you information about concise idea of how to employ each technique, in this seven possible market situations.
They are three basic elements predict market i.e. Time, price, and volume.
Beginning traders tend to use mostly price-oriented techniques. The main point if trading is to buy at a low price and sell at a high price, so why concentrate on anything else? Those who have this philosophy, Therefore, will concentrate on techniques, which look at where price has been in order to predict where price is going.
All about "price-sensitive" techniques use only one kind of data: the recent past history of prices. how is using techniques of manipulate this data in various ways to identify the current price trend and also to pinpoint when the trend might be about to end or when the trend may have been broken.
It’s not false that, the trader's final objective is price-but other factors determine price.
The completely seasoned traders, who perhaps have been around so long that they can "sense" market moves without actually being able to explain them, have a longer perspective on the market. They see that what will happens in the market today, This week, or this month, is influenced in part by a very long-frame context- by tendencies and events which may play out over a number of years. In short, the fully- experienced traders see the market in a time-related frame of reference. These traders turn to time-oriented, patter-recognition techniques, and cyclic.
It is perhaps helps you that beginning traders Philosophies will go through the above thee stages. However, if they recognize them, it may be possible for them to shorten their stay at the first stages and become more sophisticated traders more quickly then they would have without this book
