I don't see any bull that is for sure ... So what do you think you are looking at if it not a bull???
It is also known as the either ... or ... game
The beauty of the chart above will depends on the eyes of the beholders.
Whether you believe or not ... can see or not ...it is up to you and not me.
IF you see the chart is rubbish .. than rubbish will echo in your mind and you will hear only echo that resonate inside.
The approach I adopt when someone try to convince me or make me believe or accept what is said, I will take 3 steps back, take note of all the points presented.
Next I will draw up my road map and try to prove why I should consider what is said and next is to draw up another plan to prove why I should not.
With the results than I will weigh which direction I should be taking and consider when I should be taking the opposite if warranted.
The older charting software that I use from the 1990s do not have the flexibility of charting intraday data except DAILY, WEEKLY and MONTHLY. This is long before INTERNET explosion and trading platform which are intra-day enabled become widely available FREE without cost.
Does this mean with real-time one become more profitable? NO. There is guarantee that real time intra day users are more profitable than EoD (End of Day) users. When one is given many time frames and spoil with many time frame options, once can become confused which ONES to use.
Trading is like cooking. The cook has to decide how high the heat or fire to turn up or down and which spices or ingredients for which dishes.
Even curry a generic word has many different variations from different countries using some different ingredients and preparations.
One should sit back, ponder over which time frames to be selected to match the relevant trends accompanied by the compatible indicators.
Take your time to think over and study the charts across different time frames with different trend !!!!
While the blue oscillator has been moving up when it was below ZERO, it can either continue to climb higher cross ZERO and continue to move up or abruptly make a U-turn and swim back down.
The plan of trading is always having a PLAN B ...in case PLAN A comes to an END gradually or abruptly.
Most of the time casualties is due to the failure to consider scenario B is possible and we are fixated mentally on the path despite the change. Rewiring our mind is NOT easy despite what we see.
We need to be convinced that change is happening and PLAN B has to be a serious Option to implement.
IF we think that RED lines zone on the above will continue to go up like the BLUE while it actual fact it is moving down, than we will need to weather the storm until it turn back up.
The different shapes of the Blue Oscillator versus the price trend direction only confirms the NON-LINEAR properties of the trend. The price trend rate of change is NOT uniform at times increasing and decreasing which is captured by the Blue Oscillator.
At times you will notice the Blue oscillators rises with price and drop in-line with price retreat.
Other time price and Blue oscillator going different direction with price going up and Blue Oscillator retreating. Follow by the next action where both Price and the oscillator moving in the same direction after diverging.
In other words, the relationship between price and oscillators will be 2 phase ...
1) Agreement in same direction.
2) Disagreement in different direction.
What is the definition of AGREEMENT in same direction? My definition is both and are moving in the same direction but different gradient or slope. Anything not within this is automatically reclassified into DISAGREEMENT.
Price UP with Oscillator UP (Agreement)
Price DOWN with Oscillator DOWN (Agreement)
Price Horizontal with Oscillator Horizontal (Agreement)
Price UP/DOWN with Oscillator Horizontal (Disagreement)
Price Horizontal with Oscillator UP/DOWN (Disagreement)
Anything outside of the 3 agreements state = Disagreement.
What do you do when you see the disagreements? Alarm bell goes up and trade more cautiously.
Today, we do not need to manually construct the charts. It is all readily available from any trading platform that one subscribe. They will have BARS, CLOSE LINE and CANDLESTICKS but the more "traditional" one might include Point and Figure or Kagi or Renko ...etc.
Irrespective of whichever format you use, the basic function is to determine whether it is going up or down and the steepness or gradient for the mathematicians.
Well the truth is the trend moves NOT in a uniform straight line from the start till the end but ...zig -zag with different gradient in ONE direction until it do a reverse or change to the next direction.
The biggest obstacle to most people how one define the trend in motion and the trend reversal.
What and how one define trend in motion will also incorporate the temporary trend retreat before resuming in the earlier direction will decide one ability to weather volatility.
The next set of rule to define trend reversal is normally easier than the above.
Some of the veterans will not even look at any indicators other than simple basic bar charts. The gradient will be used to define to strength and momentum. Whether it is accelerating or cruising, the veterans
This veterans understand there will be turbulence, storm in the flight path until the destination is reached!! Experienced veterans know how to pilot the plane in all the different circumstances and that demand strategic plans to be implemented.
The modern veterans will move one step up to include indicators to help in precisions.
Is this game about precision? Or is it about ones ability to go with the flow???
When we look at the chart ... what we need to understand are only a few things or more precisely 2 things.
How about price? Well price represents your APPETITE when you see the number!!!!!!!!! Some people don't have appetite for big absolute price numbers and some have appetite for pennies!!!!!
Some maybe bias with certain price values and some may see them as irrelevant.
The whole idea is NOT to look at the numbers BUT look at the chart and try to write down WHAT DO YOU SEE. It is only after one is able to overcome the mental paralysis than there is no need to write what you see.
Even one should ignore the name of the chart or products or stocks or instruments.
Even one struggle with charts from past or present teachings/beliefs ... one should take 10 steps back ... re-wire ... re-engineer the whole process from the very basic foundation of CHART TREND ANALYSIS.
All the pollution and contamination comes when one start to intro and mix all sort of idea into the recipe instead of asking yourself when you look at the chart, what DO YOU SEE!!!!!
Forgot the indicators, forget the volume forget all the ratios... Just see the chart without all the makeups and cosmetics. Only than you can see the light.
When you are proficient, you can put on chart cosmetics to add a bit more zing to the chart but be careful not to over spice it up
The next step is to ask yourself, how do you know the direction has changed? It does not matter whether you are using candle or bar or line chart.
What do you use to track the direction and what do you use to confirm the directional change? When this can be applied across all different products/instruments for all different time frames , than you have got a working functional basic reliable system
IS the act of trying to make sense out of so-called "irrational and erratic" market a futile effort or maybe not????
What one can do and achieve within the normal realm in this world can be conceived mentally and achieved physically. That is the power of mind and belief.
If one believe that the market is a random act, than it is highly unlikely you will try to disapprove it is NOT a random move.
IF you believe there is order in the market, than you will start to find and see ...identify the behavior is no longer random.
The biggest challenge and acceptance is that NO ONE can map the pattern or behavior 100% accuracy. Instead one should distill the evident, imminent behavior up and down.
The question is .. HOW DO YOU MANAGE THE non-normal behavior that you can't map? How will you act when you face such conditions?
What you see is an image or echo of your mind ....!!!!!
When one start to see things like in the most simplest form... like an innocent kid who don't know anything instead of approaching it from the high tech rocket science mindset, than you eyes and mind will be open to see what is obvious before you ..it will be
The are many ways to make money in the financial markets BUT there a consistent way to repeat the same mistake. Sometime this act is called self-inflicted injury, self sabotage or even friendly fire. Whatever name you want to call it and how it happens will only result in losses in the trading account.
I have my own fair share in this as well and over time put in place rules to ensure this do not happen or minimize or manageable.
Two common contributor to this is the distractions cause by short term intraday volatility instead of the longer term trend or more aptly called microscopic price volatility analysis.
The other is the wrong priority between flowing with the trend versus predicting trend reversal. It took me many years to realize one of the author in one of the books I read stating .... let market worries about itself when it is going to turn. let market pick its own time and level where and when it is going to happen. You just worry and focus the in between.
Simple non-mathematical .. rocket science statement ... very philosophical ... very profoundly true!!!
Trend don't change all the time .... only certain time and twice. This events accounts for less than 10% and 90% is the in-between.
If one spend 90% of the effort in market reversal prediction or forecasting, than one has the time allocation and priorities WRONG.
It need not be 200% perfect but it must be reliable and flexible to adapt into a changing/dynamic trend
Looking back my 30+ years journey, and not many people can last that long in the arena ...I look into the different stages or phases as a "market opportunist" trying to learn, unlearn and relearn all thee different things about financial markets. The DOs and DON'Ts. The truth and the facts and the fakes.
From the perspective of writing reports, it is how you write to prove to the readers your "academic intellect". Whether it is going to make money or not is IMMATERIAL. GAYA MESTI MAU!!!!
From the viewpoint of managing your own personal funds, I can only say that a streetsmart approach is the right strategy. There is nothing intellectual and all it takes is to work on simple rules that is reliable. One can use the most orthodox approach and still be profitable.
I believe that the MUST get rid trait in ones mind is to completely ban the mindset of using some tools to PREDICT market like fortune telling!!! Most people will spend lots of time and effort to PREDICT the market which happen only at 2 points of the trend ..namely START and the END. The rest of the time is BETWEEN the start and the end. Probably 90% of the time. Or at least 80%.
A realistic and most streetsmart is to focus the in between where big bucks or meat is!!
You to be in when it change and out when it change again.