Thursday, September 16, 2021

Conceptualizing a basic system

My mistake is ALWAYS due to my own failure to ask the most basic question about TREND. I do get carried away when my mind switch to a state of believing the perception of HIGH and LOW instead of LOOKING at the trend. 

So what is TREND? Trend in my definition of chart analysis refers to DIRECTIONAL movement merely plotting where it was .. it is ... it will be ? IT is about price direction. This has nothing to do with all the rest of the jargon like candle, volume, support, resistance ..... etc.

Depending on the individual temperament, some is fitted to be intra-day, some on daily others maybe weekly charts.

In my opinion, it is a hybrid of all 3 and knowing when to use which. Yes they should be an anchor or base time frame and one higher and one lower. It can be 1h ... 4h (Base) ..Daily or maybe 4h ... DAILY (base) ... weekly. Some might prefer DAILY ... WEEKLY (BASE) ... MONTHLY.

IF the trend move on a tangent of 1 or 45 degrees, than one time frame is enough. Unfortunately, we are facing and dealing with a price trend that is DYNAMIC and not moving on a 45 degrees tangent.

What about financial award winning theories? NONE ... into the garbage bin.

What about Portfolio Theory? ....also into the shredder.

What about Risk Management? ...if one knows which direction it is going, all one need to worry is the SUDDEN u-turn of the trend. How does one protect against such situation? If one has the basic tool to track and confirm the change of trend... than how can one use such knowledge? The next question is HOW OFTEN DOES THE TREND KEEP CHANGING?   

        

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