Articles for: Chart Patterns

The strong Australian Dollar seems to be common knowledge wherever I go. Everyone is talking about the magic word “parity” and wondering when the value of the Australian Dollar will exceed the value of the US Dollar.

As I search to fathom out the melee of the last couple of weeks I try and contemplate likely scenarios. I say likely as to talk of just possible scenarios is really just sitting on the fence and I am not good at that. Nor can I say I am good at picking short term moves. I say ‘moves’ as I am inclined to think a short term ‘trend’ is almost a contradiction of terms. I do not aspire to pick the short term moves but only to understand them as a foundation to at least the medium term move ahead.

2009 was a year of recoveries – for the economy, the financial system and battered stocks. Reading varied financial research over the past few months, there have been a number of themes that are consistent. These being firstly that after the ‘economic sweet spot’ in the third quarter of 2009, the speed of the recovery will slow in 2010. Flowing on from this is the idea that 2010 will see more a stock picker’s market compared to 2009 where almost all ships were lifted with the tide.

It always amazes me when people tell me that techniques are too simple to work. I’m not pointing the finger here, I have done exactly the same thing myself. For example, take Gann’s rule of markets moving in equal sections.

Perhaps chaos is slightly too strong a word for what we have experienced in global markets in the last few days. However it has caused some consternation, otherwise we would not have seen this kind of action:

In some recent editorial I have referred to methodology and making sure whatever system you use is well founded and has been successfully tested. I would like to elaborate a little more on this.

When last we looked at Santos I left you with a little challenge to spot why I wouldn’t take an ABC short trade that was signalled on Tuesday 1 December. How did you go? It’s not too late to go and have a look now before you read on. The simple reason was that Point B, which occurred on 27 November, sat on the 50% level of a major range. To find this we look at the Weekly Chart, as follows.

Firstly I’d like to wish all of our Trading Tutors Newsletter Readers a very Happy New Year, with an abundance of good times, good memories and good trades for 2010!

Late last year I talked about ‘sticking to your guns’ when you believe in your strategy – despite there maybe being some headwinds. This of course assumes that your strategy was well founded in the first place and has been successfully and repeatedly tested. This is all part of having a proven methodology which you use over and over again.