Gonçalo Moreira, CMT
Independent Analyst
Summary
A historical approach to trends, from Dow to Elliott, Gartley and Gann. None of these great contributors subscribed to the adage "The Trend is Your Friend". Moreover, their legacy releases us from that idea. Whose friend is the Trend? A Historical approach to trends Abstract: Buy low and sell high? Buy high and sell even higher? Trend is an abstraction, almost irrelevant... What is the legacy of the forefathers of TA? Charles Dow: Some of its basic tenets: - The primary trend is inviolate - The averages discount everything - The theory is not infallible - The averages confirm each other - Volume confirms the trend Some of its basic tenets: - The primary trend is inviolate - The averages discount everything - The theory is not infallible - The averages confirm each other - Volume confirms the trend Ralph Nelson Elliott Rules & Guidelines The sequence is constant across all timeframes Time as less Important that form Actionary movements are the most profitable The market spends more time in corrective mode than in impulsive mode Alternation and equality are pan of the market structure and Fibonacci... The sequence The ratios H.M. Gartiey 'The best investment opportunity" Occurs with a 1/3 to 2/3 reversal The "sweet spot' is one of low risk to high, reward relationship Much better that a H&Ss Offers strong reasons to stop and target placements Volume confirms the pattern Gann: Added time dimension Multiple confluences Finding turning points Conclusion: Trend Trading strategies are based on the assumption that markets do trend, but its purpose is to find key turning points. Two choices become very good at finding turning points or develop a method where entries are of second importance. Related content: Where Is The Dow Going? How To Use Gann Indicators Elliot Wave principle Author: Gonçalo MoreiraLatest Live Videos
Editors’ Picks
EUR/USD weakens to near 1.1900 as traders eye US data
EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.
GBP/USD stays in the red below 1.3700 on renewed USD demand
GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.
Gold sticks to modest losses above $5,000 ahead of US data
Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.
Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals
Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.
Follow the money, what USD/JPY in Tokyo is really telling you
Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.
Here is what you need to know on Tuesday, February 10:
The USD stays resilient against its rivals early Tuesday after suffering large losses on Monday. The US economic calendar will feature Export Price Index, Import Price Index and Retail Sales data for December. Additionally, several Fed policymakers will be delivering speeches.