Trend Qualification and Trading

Foreword xi

Acknowledgments xiii

Introduction 1

Part I Trend Theory 5

Chapter 1 Redefining Trend 7

Chapter 2 Classical Trend Model 13

Objective of the Model 13

Inputs 14

Model Definition 14

Rules for the Model 15

Applying the Model 18

Summary 22

Chapter 3 Neoclassical Trend Model 25

Objective of the Model 26

Inputs 29

Model Definition 30

Rules for the Model 37

Summary 46

Chapter 4 Determining Trends 49

Fundamentals for the Long Term 49

Swing Point Logic 50

Identifying and Labeling Trends 65

Summary 70

Chapter 5 Qualifying Trends 73

Using Swing Point Tests 73

Trend Continuation and Transitions 75

Retest and Regenerate 97

Summary 106

Part II Application of Trend Theory 109

Chapter 6 Preparing to Trade 111

Overview of Trading Strategies 112

Risk versus Reward 115

Time Frames 116

Summary 125

Chapter 7 Entering and Exiting Trades 127

Support and Resistance 128

Price Zones, Not Lines 131

Defining Entry and Exit Points 136

A Trading Example: Combining Technical Events 161

Summary 166

Chapter 8 Reversals and Price Projections 167

Price Reversals 168

Price Projections 176

Summary 187

Chapter 9 Time Frames 191

Time Frame Analysis 192

Time Frame Integration 197

Establishing a Trading Bias 206

Trade Trend Matrix 212

Summary 214

Chapter 10 Markets, Sectors, and the Trading Cube 215

General Market 216

Market Sectors 217

The Trading Cube 219

Summary 240

Chapter 11 Trading Qualified Trends 243

Example of a Qualified Trend 244

Entering a Trade 249

Exploiting the Trend 258

Exiting the Trade 263

Flipping Trading Positions 268

Concluding Thoughts 272

Notes 275

Glossary of Key Terms 281

About the Author 287

Index 289