Trend Analysis
5.12 Chapter Summary
In this chapter, we dealt with issues concerning the definition and identification
of a trend. We have also discussed various powerful trend indicators that helped
identify the early onset of a trend. The practitioner is advised to pay particular
attention to the 16 characteristics that may significantly impact the future of price
action and potential strength of a trend.Chapter 5 Review Questions
- What is a trend?
- Explain the disadvantages of defining market and price action.
- What are the early indications of a potential reversal?
- Briefly describe the 12 ways in which price action may be understood.
- How can channel analysis help pinpoint potential reversals and continuations?
- What are the factors that impact trendline reliability?
- Explain the advantages of using proportional sizing.
- In what ways are price‐based filters more useful than time and algorithmic filters?
referenCes
Covel, Michael W. 2009. Trend Following. Upper Saddle River, NJ: FT Press.
DeMark, Thomas. 1994. The New Science of Technical Analysis. New York: John Wiley
and Sons.
Hill, John, George Pruitt, and Lundy Hill. 2000. The Ultimate Trading Guide. New York:
John Wiley and Sons.
Sperandeo, Victor. 1991. Trader Vic: Methods of a Wall Street Master. New York: John
Wiley and Sons.